Digitising and automating the contract management process
Practically, let’s step back and take a look at how most organisations manage their contracting cycle. To do this, we will be using the sales process as an example.
Each organisation has a sales force. Typically, the sales team go out in the field with paper-based contracts covering a large geographical area, travelling long distances to see and sign up clients (although, with new technology and people more readily buying online, the travelling salesperson is already under threat). The team then return to their regional offices days (possibly weeks) later with the signed contracts. The contract details are captured by the admin departments, which then send the details to accounts for billing. Once this is completed, then only are the goods or services distributed. Thereafter, the contracts are filed, administration draws up reports on sales volumes, and someone tries to manage the information on an Excel spreadsheet, in an attempt to track key dates or tasks.
Let’s now go through this process for an organisation that is digitally aware so that we can understand the impact technology can have, while assuming a sales force still exists. The sales person, with his tablet, smart device, or laptop, visits to sign up new a new client. This is now done online with a contract that is automatically generated (using background office processes if required). The contract is signed digitally, and the contract data is automatically sent to the regional offices. Administration can now manage the data, accounts can process the billing and operations can send out the goods and services quickly and efficiently. This saves time, paper and additional costs required to manage a paper-based contracting process.
We can now asses how this affects management. The data is stored in a Contract Management System – alerts, notifications and reporting will be instantly available to managers. No more excel spreadsheets, incorrect data capture, and mismanaged controls resulting in lost revenue. To further improve efficiency, integration occurs into CRM, ERP and other systems, so that only one version of data is used. Security, rules and delegations of authority exist, with built in audit trails exist. And because that data sits in a structured database, it’s accessible, secure, and valuable, with analytics and business intelligence tools sitting on top.
And what industries can benefit? Since all industries and Government organisations enter into contracts, it affects anyone who transacts with another organisation. The contracts or interactions can be in the form of purchase orders, quotes, standard terms and conditions, or more complex large negotiated contracts – all of which can pass through a contract management system.
Aberdeen Research reported that through an automated contract management approach, and organisation can expect to book an additional 1 to 2% of revenue, and for most organisations that represents a fair amount of money. Unfortunately, however, due to a lack of efficiency in process management and digitization, many organisations suffer a loss. Through an implementation of a digital contracting system at any level, companies can save time, money, resources and minimize risks. Contact us today if you would like to learn more about how your company can join the Digital Revolution through digital contracting.