Legacy vs. New Age Contract Management — Resolving the war in Middle East Procurement

Having seen the challenges posed by legacy systems, let’s explore how technology can help us resolve the issues in the post-war period.

Contract Management Life Cycle

Challenge 1:- Low visibility

• Implement a central repository to store and manage contract information.
• Identify key terms of a contract which need to be tracked like expiry date, variations and set the respective alerts.
• Analyze the contract utilization trends which will in turn help you identify whether contract terms are being followed or not.
• Review evergreen contracts and re-negotiate terms if required.

Challenge 2:- Compliance

• Integrate your contracts with the organization’s ERP system.
• Identify purchase price compliance and rebates by monitoring purchase information with the contracts.
• Additionally, maintain a contract repository & track utilization metrics.

Challenge 3:- Standardization

• Create standardized contract templates and keep them easily accessible to the sourcing managers.
• Track what terms are negotiated most often and change them globally.
• Also define a clause hierarchy based on the different regional aspects.

Challenge 4:- Long Cycle Time

• Introduce e Signatures and avoid the hassle of manual signatures.
• Create pre defined approval hierarchy based on category, spend etc.
• Thus the written contract will automatically follow the hierarchy for approval and feedback.
• Set clause level approvals where you can define clause ownership and automate the process.

As quoted by Andy Grove, Intel — “There is at least one point in the history of any company when you have to change dramatically to rise to the next level of performance. Miss that moment — and you start to decline”.

To actually reap the benefits from the contracts, organizations need to invest in the right technology and develop the right attitude.