Sourcing and Procurement
Mastering corporate agreements: Unravelling the essence of enterprise contract management
Corporate agreements and contracts are the backbone of modern business organisations, and for many, they are not a concern unless something goes wrong. Traditionally, contracts have sat in dusty cabinets or as PDF bundles without much oversight, transparency, or control, leaving the business vulnerable to numerous risks like financial penalties, missed opportunities, compliance blind spots, or – worse – litigation.
The new generation contract management solutions are changing the way businesses handle corporate agreements, centralising the enterprise contract management operations to streamline the workflow, improving visibility and control, and enhancing operational efficiency.
What is enterprise contract management?
The concept of enterprise contract management refers to the process modern business organisations use that encompasses everything from contract creation, drafting, review, negotiation, execution, tracking, and management throughout the contract lifecycle. It is a more nuanced process – compared to contract management in smaller businesses – as the high value, volumes, and risks associated with enterprise contracts are much more challenging.
Need for enterprise contract management solutions
Traditional contract management processes are rife with inefficiencies and challenges, especially when it comes to handling a high volume of contracts for modern businesses, the need for transparency, accountability, and controls. Moreover, although ERP contract management has changed how businesses handle contract lifecycle. However, the basic contract management modules within ERP packages often fail when it comes to managing specialised contracts – which necessitate specialised contract management solutions.
Some of the most pressing challenges modern enterprise contract management solutions can help overcome include:
- Managing a high volume of contracts and vendors
- Managing compliance risks
- Process inefficiencies and high operational costs
- Lack of visibility and control
- Version control and collaboration with multiple stakeholders
- Contract renewal management
- Data security and privacy
- Process scalability
How can contract management solutions help?
Modern contract management solutions not only help overcome the challenges of manual contract management but also play a pivotal role in providing the functionality modern businesses need to streamline their contract lifecycle. They also eliminate the need for fragmented processes and different tools for enhanced control and efficiency within contract workflows.
Some ways an enterprise contract management solution can benefit a business include:
Risk mitigation
Contract management solutions simplify the identification, management, and mitigation of risks associated with corporate agreements. This way, the business can ensure compliance with necessary legal and regulatory requirements.
Cost-savings
Effective contract management improves negotiations and collaborations between different stakeholders, resulting in optimised contract terms and helping businesses identify opportunities for discounts or renegotiations and prevent overpayment. As a result, businesses can lower their costs while maximising profits.
Enhanced control
A centralised contract hub within enterprise contract management solutions facilitates easy document tracking and review of contract history via a detailed log of every contract modification – noting the time and user associated with each change. This provides a more accurate audit trail for each contract, facilitating better internal compliance. Additionally, enterprise contract management also facilitates collaboration between teams, allowing the legal team greater control over contracts, thus reducing the risk of unauthorised changes or deviations from negotiated terms.
Operational efficiency
Contract management solutions can help streamline the entire contract lifecycle, making it faster and more efficient. Additionally, you can also set up milestone alerts – for contract renewals, deadlines, or other important contract stages – so you never miss another important date.
Enhanced visibility
A centralised digital contract repository offers easy access to relevant information to the respective stakeholders, promoting visibility and transparency. This ensures better compliance, robust reporting, standardisation, clear communication, and improved decision-making across teams.
Time-savings
Enterprise contract management solutions allow businesses to automate many tasks associated with corporate agreement management, resulting in a faster contract lifecycle while freeing up your team to focus more on high-value tasks.
However, it is crucial to note that to get these benefits you must choose the right contract management solution for your business. Otherwise, the challenges of traditional contract management will still hinder you. Some of the things you may want to consider before choosing a contract management solution include:- Size of your contract management operations – accounting for the volume of contracts and vendors you need to manage.
- Compliance requirements of your business.
- Data security and privacy protocols of the contract management solution.
- Stakeholder relationships you need to manage.
How can Infosys BPM help?
Finding the right contract management solution is the key to ensuring streamlined contract management workflows and optimised corporate agreements. Infosys BPM can help you leverage next-gen technologies to improve contract compliance, reduce contract lifecycle time, and deliver value across every stage of contract management. From centralised contract and template repository and reduced contract administration efforts (by 25%) to improved response rates (from 65% to 90%), higher contract visibility, and enhanced controls, Infosys BPM can help manage your corporate agreements efficiently through enterprise contract management.
