One of the key challenges in Procurement is to assure a good management of company’s contracts. If established items aren’t well managed, they can affect business profitability and cause losses to the organization.
Corporate procurement agreements are more and more complex, involving increased supply chain bureaucracy and unpredictable demands, for instance. Such factors, among others, can cause buyers and suppliers to give up adhering to laws on the integrity and transparency of their companies. These difficulties can stall the supply chain and reduce the quality of delivered services. Therefore, any practices that aren’t aligned to company values can have a negative effect both on the corporation and on everyone involved in the process.
A 2017 Aberdeen survey revealed that 44% of companies want more visibility into their contracts, while 40% would like to reduce risk with their suppliers. Additionally, 37% of organizations want more compliance with supplier agreements, and 34% would like to access supplier performance.
According to Daniel Hsu, head of Mercado Eletrônico’s CLM business unit, a lack of process management and control can lead to negotiation delays, poor governance and financial losses. “To avoid risk, the first step is to have a good Contract Lifecycle Management (CLM). Issues such as decentralized contract bases, difficulties in meeting compliance rules and losses due to uncontrolled renegotiation deadlines, can be solved with CLM”.
Mercado Eletrônico offers a Contract Lifecycle Management solution that assists, tracks and organizes the agreements made by your company with suppliers, partners and customers, always focused on cost reduction. Furthermore, it helps to consolidate all negotiations in a single environment, bringing more agility and governance when you must draft contracts.
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Pillars of an efficient contract management
Mercado Eletrônico’s CLM solution offers companies a full view about contract bases, allowing complete access to real-time data, for a more assertive decision-making process. The tool has been designed to allow companies establishing the four key contract management pillars: saving, agility, collaboration and governance.
The CLM technology assures also validity control, avoids increased cost of contract breaches, tracks real savings from contract usage, and offers electronic signature options and a mobile solution, making it easier to track activities anywhere.
“Contract management plays a key role when planning a company. By an ongoing process supervision, you can achieve savings when purchasing products and contracting services – and also with costs, and even with administrative procedures”, adds Mr. Hsu.
Now it’s up to you. Got any more questions about ME’s CLM solution? Contact our experts!