How Contract Management Dashboards Put You in Control

Contract negotiation with suppliers can be a tough job. Arriving at mutually agreeable prices, payment timelines and contract terms and conditions take a lot of time and effort in addition to skills.

Not surprisingly, this is a key performance indicator for procurement. In many enterprises, the performance of procurement is evaluated by considering the team’s contribution in contract negotiations.

The work, however, does not end with the signing of a contract. In fact, it is merely the starting point.

All the hard work done in negotiating and getting the contract signed does not guarantee the desired results.

What is more important is to ensure that contracts are fully utilized, and suppliers comply with agreed terms and conditions. This requires constant monitoring and performance tracking throughout the contract life cycle.

Done traditionally, procurement has to invest a lot of time, effort as well as resources in this endeavor. This often keeps procurement occupied in routine, mundane tasks and prevents it from making the most of potential opportunities and contributing to strategic goals in a more meaningful way.

As enterprises deal with multiple suppliers, procurement has to juggle through several contracts on a daily basis. Often, it struggles to get a clear view and track different contracts as they go through.

How can procurement streamline this entire process, monitor suppliers and ensure that favorable contract terms are translated into hard savings?

The answer is automation.

By automating contract creation, monitoring and performance tracking, procurement can utilize its time and effort in more strategic tasks and add more value to the business.

What Modern Contract Management Software Can Do

Modern contract management software does a lot more than automating routine tasks such as contract creation and approval.

It acts like a procurement data warehouse and central repository from where you can access any contract-related information at any time.

It features intuitive contract management dashboards that provide full contract visibility and show contract utilization and compliance. It gives enterprise-wide contract intelligence across different categories and regions.

It lets procurement track purchase orders against the contract and report on price or other variances between contract and invoice. With comprehensive supplier performance analysis, it allows procurement to compare contracted and actual delivery turnaround times and other performance metrics.

It also ensures that buyers can effectively utilize contract terms and conditions with multiple functionalities — sourcing, contract management, supplier management and spend analysis — in a single, unified source-to-pay procurement solution. They know which function is buying what, from which suppliers and at what price.

Also read: GEP SMART Helps Financial Services Company Streamline Contract Management

How Dashboards Simplify Contract Management

A contract management dashboard addresses the pressing need to gain end-to-end visibility into contract management processes. With real-time data and actionable insights, it helps procurement find answers to key questions such as:

• How are contracts and vendors performing vis-à-vis agreed terms and conditions?
• What are the bottlenecks in contract management?
• What are the underlying risks and ways to mitigate them?

Traditional approaches to contract management cannot provide this information, at least not in an efficient and timely manner. This has made dashboards so popular for contract management.

A contract management dashboard collates and displays all information related to contracts in an easily digestible and visual format. It typically provides an overview of how contracts are performing against set KPIs and other critical contract data.

From a quick view of supplier information and real-time status of a contract to reviewing the status of work order tasks, it is the central repository of all contract data. You can easily see how many contracts are pending and in draft, what is pending review and how much they are valued at.

The objective of having all contract information in a dashboard is to enable contract managers and other stakeholders to quickly extract and understand data and derive actionable insights.

What makes a contract management dashboard highly effective and useful for procurement is the visual representation of curated data. Not only does such representation help access contract data and analytics, but it also allows contract managers to track supplier performance metrics and identify the most successful vendors across different categories and regions.

Contract managers can access real-time data and analytics such as average cycle times, compliance statistics, turnaround times, etc. Collated information in a single, easy-to-read display helps users visualize (and evaluate) key performance indicators.

AI-powered analytics can simplify contract management and identify performance issues before they escalate. It can also automate risk analysis and review of unstructured contracts, with visual insights helping to identify anomalies.

Among many other data-driven insights, contract management dashboards can help teams understand where contracts are getting stuck and sitting for the longest time during their life cycle. For example, a dashboard may show a large volume of contracts experiencing delays at the approval stage. This calls for a change in the approval process.

Likewise, too much time spent on negotiation suggests the need for a review of contract terms.

When procurement has all the contract information in one place, it does not have to look through multiple systems and records. Instead, it has all the information at its fingertips and is therefore most likely to improve processes and benefit from available opportunities.

Another benefit is the lowering of overall costs incurred otherwise because of the involvement of multiple stakeholders at different stages of the contract life cycle. By automating tasks and reducing human intervention at every stage of the contract life cycle, contract management dashboards and software help bring down the overall cost per contract as well as cost per contract processing.

How Procurement Can Use Dashboard Insights

Procurement can leverage the data and insights gathered from contract management dashboards to make well-informed decisions. Here are a few use cases:

• Date-based notifications can lead to a renewal process that includes an assessment of the contract’s current value, alternatives and negotiation options.
• Contract risks or overspends can be flagged to relevant stakeholders.
• Bottlenecks in contract management processes can be reviewed and eliminated.
• Cost control opportunities can be shared with procurement, finance and other internal stakeholders.
• Compliance issues of a vendor can be investigated to initiate a remedial action.

Finally, as contract management software continues to evolve, dashboards are likely to become more configurable, provide sophisticated actionable intelligence and offer new and innovative ways to leverage all types of contract data.

Know more about GEP’s contract management software solutions.