Modern businesses typically deal with a large volume of equipment-related contracts. These need to be managed from the time they are created up to their termination. Efficient contract management processes improve communication and collaboration across different departments while increasing revenue and cutting overhead costs for your organization.
Here are a few obstacles that can be overcome through digitizing and centralizing your contract management processes:
- Inefficient manual tracking: Manual tracking of your contracts is both costly and time-consuming and prone to human error. This not only disrupts your workflows but can lead to additional problems such as poor procurement planning.
- More prone to error and inaccuracies: Without centralized contract management, there is less visibility into the terms of the contract for all the parties involved. Moreover, without standardized procedures and approvals, your contracts are at greater risk of having inaccurate information on them.
- Lack of compliance: Inefficient processes lead to a lack of communication within the organization and with vendors. With manual contract management processes, your business is at a greater risk of non-compliance since you have no automated reminders for essential renewals or upgrades.
- Losing negotiation power: A study by Goldman Sachs suggests that contract management accelerates negotiation cycles by 50%. Without a digital record of your previous agreements, you may find yourself in a difficult position while negotiating with an employee or vendor.
When contract management processes are integrated into asset management systems, it ensures complete visibility across the board.
Here are 5 key benefits of automating and integrating your contract management processes with asset tracking software.
1. A digital repository of all your contracts
Digitizing and centralizing your contract management saves you the trouble of storing hard copies across siloed systems. It enables you to manage a wide range of contracts including those related to employment, procurement, maintenance as well as insurance from a single interface eliminating the time-consuming task of tracking them across multiple systems.
Automated contract management processes ensure that you never lose sight of expiration and renewal dates while having a consolidated view of your contracts. Having instant access to all contracts in one place also results in enhanced productivity since you have greater control over business workflows.
2. Save time and cost with better forecasting
An automated contract management process allows you to easily and quickly get contracts in front of the correct stakeholders for review and approval within a deadline. This means less time will be wasted in coordination which is a problem in manual management of contracts. With automated alerts and triggers within the system, you can ensure important events such as warranty expirations are never missed.
You can also track the expenses and costs of your contracts by creating and running customized reports. This allows you to pull up past revenue or spending trends. Thus, putting you in a better position to make decisions important for your business.
Having greater oversight over your revenues and past spending, you will also find yourself in a better position to make procurement decisions. It ensures that you do not overspend and are able to negotiate better with your vendors.
3. Enhanced compliance and accountability
Getting automated alerts about upcoming contract expirations ensures greater compliance for your organization and greater accountability for the parties involved in the contract. It is not possible to change or remove any critical terms from a digitized contract, minimizing chances for any malpractice that would impact your business adversely. With a central repository, you have the ability to manage who has access to editing contracts.
Maintaining control over your contracts ensures that they are not violated by any of the parties involved. If you suspect any unauthorized access you can directly take action against the suspected individuals.
4. Ability to link projects with contracts
Digitizing your contract management process means that you can have project-specific contracts in addition to your company’s permanent contracts. It allows you to link employee and vendor contracts to specific projects, improving the management of your workflows.
This is particularly helpful for organizations that operate in distant and diverse locations. Each country has its own set of laws and regulations that need to be followed. For example, if your company based in the United States is undertaking projects in North America as well as Europeー the projects and the terms of the contract may differ based on local laws. Automated management of your contracts enables you to easily manage these contracts by linking them to relevant projects.
5. Full visibility into onboarded vendors
Most organizations need to collaborate with external vendors and providers for their projects. Automated contract management processes enable you to regularly maintain and renew recurring contracts relating to external maintenance and procurement. It gives you full visibility into your organization’s dealing with external vendors. It highlights any shortcomings that can potentially harm your business.
Manually keeping a log of these contracts often leads to delays with renewals or a lack of information on the terms and conditions. With digitized contract management processes, you can stay on top of the terms of a contract and get alerts when renewals are necessary.
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