Not able to realize the value of validated contracts data?
Many organizations have taken steps to digitize contracts and upload them to contract management systems, or better still to set up the contracts online for P2P transactions.
However, the challenge facing many companies maintaining contracts in repositories or contract management systems is to ensure that all contact documents are complete and relevant; contract attributes are valid and up to date. Another problem is to reference the master agreements to sub agreements, SOW's etc. since they are multiyear, multi locational contracts, which many a time results in companies not being to realize the full benefits of early payment discounts or volume rebates / discounts, etc.
Another added problem is ensuring up to date supplier data, parent and child relationship, etc. which can help companies realize aggregation opportunities too.
Unfortunately, a number of flaws creeps into the process of maintaining contract data since the data itself is available with multiple users/systems and many a time available documents are uploaded without validation . It could also be a laborious process for buyers to validate once the documents /information has been entered over a period of time.
Having a validated contracts data is the first step for any large procurement organization to get the full visibility of the spend under management and understanding supply base. While it becomes very critical during contract renewal time , it is also important for contract compliance. Needless to state that without validation of data , it's integrity is suspect.
Undertaking the cleansing and validation of contracts data is not only a time consuming activity that requires knowledge of contracts and attention to detail , it will also involve contacting multiple stakeholders and suppliers which is a cumbersome activity for buyers..
However centralizing and outsourcing the contract management process to a managed service provider with a large pool of contract specialists would not only be cost effective and efficient , it will also ensure contract compliance on a real time basis.