enterprise_contract_managementBy Thomas Schneck – Misaligned and poorly constructed contracts create both increased cost and increase risk for many organizations.  According to the International Association for Contract and Commercial Management:

  • 77% of companies “frequently” suffer from misaligned contract scope and goals.
  • 55% experience confusion in contractual responsibilities.
  • 48% experience have challenges tied to price changes and delivery terms.

All of this is a direct byproduct of a manual and adhoc approach to contract management.  Getting rid of the paper through digital contracts represents a key discipline to maximizing financial and operational performance, effective subcontractor management and minimizing contract risk (e.g., letting contracts that are not valuable auto-renew, continuing to pay on cancelled contracts, letting valuable contracts lapse).

There are three main elements in an effective enterprise contract management strategy:

 Getting from idea to agreement– How can you streamline the mechanics of the contracting process?

  • How can you use contract templates to accelerate the editing process?
  • Is there a clear and consistent contract structure and are the main components clear (term, notice, scope, billing)?
  • Is there an automated process in place to notify you about deadlines and due dates?
  • Do you use electronic signatures wherever possible?
  • Are your employees able process contracts anywhere, anytime, and on any device?
  1. Creating a clear an auditable record– Who agreed to what, when did they do so, and how can you prove it?

 


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