If you’ve ever faced a long delay waiting for a purchase order or to finalize a contract, you’re not alone. Delays occur all the time in procurement. Often, timing issues are related to multiple departments collaborating on different aspects of the contract process. Yet the timely onboarding of a new supplier can mean important growth for your business, from launching a project to seeing to it that critical workflows are complete.
For many fast-growing companies, balancing the efficient administration of contracts with the legal requirements of compliance is a challenge. Having the right technology systems can improve collaboration, eliminate delays, and make it easy to manage the full lifecycle of supplier contract management. Here’s what small-to-medium businesses (SMBs) need to know.
The right procurement system improves supplier contract management and internal collaboration in two key ways.
Fast-growing companies across industries often face a similar set of challenges. One is that three distinct departments can be involved in procurement: legal, contract, and purchasing. Keeping them all on the same page can be difficult, and information-sharing or documents under review can cause bottlenecks. Improved supplier contract management starts with a procurement technology solution that enables better collaboration. For example, it’s important to make sure that all the information associated with a contract is available in a central place, so each department has access to the same information and can see where a contract under development is in workflow.
Workflow management is the second critical piece. Often, the processing of developing contracts has certain dependencies; a specific step must be completed before another can occur. Each user can be given access to review, comment, and approve, depending on their role in the process. Alerts let the next person in the process know when a step is complete, so there’s no risk of delays or emails being lost in transit. Finally, on an ongoing basis, the full contract is now available within the technology. Anytime a stakeholder for any of these departments wants to access the contract, they can review the terms and conditions, the pricing information, and the supporting documentation in a central database.
Contract deadlines and renewals: One the biggest headaches contracts departments wrestle with is staying on top of contract deadlines, renewals, and milestones. The right technology makes it easy to automate notifications when important due dates are approaching. Small-to-medium businesses can manage dozens, hundreds, or even thousands of contracts. Manually staying on top of every deadline isn’t practical. Procurement systems can alert you when you’re nearing expiration or a renewal. Wrapping up a contract or extending it also becomes easier, as platforms facilitate collaboration with both suppliers and other internal stakeholders such as your legal department.
Centralized contracts management: Another key best practice organizations are focused on is centralized documentation. From contract deliverables to supporting documentation, companies are now taking advantage of software tools that allow them to store everything in a central repository. During a renewal or when there’s a question of a contract breach, it’s critical that all the supporting documentation—from terms and conditions to the supporting documents—be available. In the case of a performance question or legal issue, it’s easy to evaluate the entire situation when the supporting documentation is organized.
Managing projects to scope: Are your suppliers meeting deadlines, submitting deliverables, and staying within budget? Often, those transactional details are intertwined with the legal aspects of the contract. Within Oracle Procurement Cloud, for example, it’s possible to centralize information about both aspects together. The system can help you answer important questions about whether your suppliers are being trustworthy, accurate, and hitting performance levels. When there’s a question, all the legal components are available as well, so any business leader who needs to review information and determine next steps can do so quickly and efficiently. Managing projects to scope, supporting your business initiatives and being more strategic about procurement becomes a streamlined, objective process—and important details don’t fall between the cracks.
Faster processing of signatures: Finally, when you’re ready for suppliers to sign a contract or you need to countersign for the files, Oracle Procurement Cloud integrates with DocuSign for faster processing. As electronic signatures have become industry standard, incorporating them into your workflow can speed up the contract process.
For SMBs, effective supplier contracts management is one of the most important aspects of the procurement lifecycle. Oracle ERP Cloud can help with dedicated procurement modules and features. Centralizing documents, enabling better collaboration, and streamlining the review and drafting phase can help you enjoy the benefits of better supplier contract management.