Contract Management for Procurement Best Practices

Looking to improve your procurement processes? Ever thought about contract management as a way to make them more efficient? If not, think again.

While procurement is a critical business function for virtually every company, senior management often misunderstands it. In general, procurement is usually viewed as a cost center, which can only be marginally improved through the application of information technology.

The primary function of the procurement professional is to evaluate and select suppliers based on availability, reliability and price in order to obtain the highest quality products (or services) at the best possible price. In order to achieve this goal, purchasing personnel need to have expertise in administration, accounting, management, planning, and psychology and contract law. They also need to be able to access and interpret large amounts of data in a relatively short amount of time.

Companies taking groundbreaking attempts at employing technology in procurement have achieved important benefits, including improvement of the procurement function. The vast majority of these early adopters have focused on ways to automate the procurement process itself, such as in the areas of high volume-low value purchases, online catalog access, and internal purchasing approvals. But in reality, improving these processes was the easy part. These systems have not helped the procurement professional manage suppliers, which is the heart of the job.

Many companies still must deal with numerous problems related to the procurement function