Nearly 50 years ago, risks in the supply chain could be a result from anything political, economic or environmental – from natural disasters to damaged goods. Today, risks are only increasing, venturing into the territory of data breaches and slow approval processes. As supplier relationships grow more complex, understanding these risks are key to managing any potential disruption. For an effective end-to-end supply chain, antiquated processes must be addressed from the start, which is where effective contract management comes into play.
The current landscape
Understanding the performance and outcomes of past contracts can help inform and improve future documents. However, when the repository of contracts is tucked away in filing cabinets, it’s not easy to access or benefit from these insights. This is where an effective contract management platform comes into play, as it provides all the necessary tools to efficiently manage all documents across the supply chain. But, before a new contract management system can be implemented, businesses must be prepared for digital transformation. So, how do companies effectively and seamlessly usher in new technology?
Change management through champions
The adage “everyone loves progress, nobody likes change” has a hint of truth to it. Change management is best achieved through gradual implementation rather than a major overhaul. This allows for lessons to be learned, as well as time for company culture to adapt. Adjusting company culture is among the biggest challenges in change management, but it’s also the most important key to ensuring success. And, it’s best achieved with internal champions.
Who should you choose as your champion? Champions are well-respected, recognized employees who will help gain momentum and increase user adoption as it relates to new technology implementation. Their influence will allow new initiatives to disseminate across the business as other employees recognize the benefits. Once adoption has taken place, and change has been implemented, teams across the business can look to the benefits that the technology provides.
Benefits of improved contract management
As previously mentioned, understanding which contracts held high risks in the past can help inform future supplier relationships and expedite the contract generation process. All risks can - and must - be evaluated and managed during pre- and post-execution. Tracking a supplier’s obligations to ensure compliance is key to mitigating risk, as is the ability to ascertain the risk of a supplier prior to signing a contract.
With automation and an easily accessible repository, legal counsels can run advanced searches by keyword, phrase or clause to easily manage approvals or changes within contracts. This also alleviates time spent negotiating contract clauses, whether that’s warranties, indemnity, price or delivery schedules.
Setting the supply chain up for success
Today’s contract management technologies, powered by artificial intelligence, offer a single repository for contracts. Teams are able to better manage the contract process at any stage from generation to completion, and negotiation in between. Automation-driven contract management improves the management of vendor relations, leading to more accurately estimated revenue, and the ability to quickly react to shifts in contracts in the event of emergencies. Supplier performance and relationships are crucial when it comes to the supply chain, so vetting and flexibility is essential, otherwise reduced revenue and damaged business reputation can result.