Every day CEOs like me are challenged to realize the objectives they’ve envisioned for their companies. To help ensure their business goals are being met in today’s demanding marketplace, three critical areas of business operations should be considered: compliance, cost reduction, and innovation. Fortunately, a Contract Lifecycle Management (CLM) system can create value in all three of these crucial aspects of the company.
Compliance: Maintaining compliance is one of the CEO’s top concerns. While the day-to-day work involved in being compliant doesn’t often fall within their purview, it is ultimately their responsibility (and neck on the line) if something slips through the cracks. Therefore, the CEO must make certain there are controls, solutions and processes in place to stay up to date on requirements and possible issues. Increasing contract visibility and transparency across the enterprise helps foster a climate of accountability, and enables everyone—not just the legal department—to identify and prevent potential problems before they happen.
Cost Reduction: Another concern of most CEOs is cost reduction. Can operations be streamlined to increase efficiency? Is the company getting the best value from its suppliers? How much risk or rising costs is in the supply chain? Is there a problem with maverick spend, noncompliance, or legal exposure? It is in the CEO’s best interest to empower the company’s procurement leaders and general counsel to make strategic decisions that reduce cost and increase value wherever possible. Contract analytics and dashboards help by making it easier to evaluate contract terms and capture data that can be used to identify areas of opportunity and risk. They provide big-picture insight into where the company is spending its money, what relationships and terms are most valuable, and where to reduce, or at least control, costs.
Innovation: CEOs understand that if you’re not innovating, you’re dying. Organizing contract information to make it highly visible and accessible reduces wasted time for everyone in the enterprise. It allows the legal department to spend less time on contract research and more time advising departments and the C-suite on how to increase compliance. It allows the procurement team to think more strategically about the value they supply to the company and how supplier relationships might be improved. Essentially, CLM frees up valuable time and makes the day-to-day operations of the company more transparent, allowing everyone in the enterprise to contribute more strategic value and big-picture impact.
As the CEO of Selectica, I know CEOs have a tremendous number of decisions to make throughout the day. Many of these decisions involve these top three concerns and will definitely impact the company’s bottom line. Our strategy in offering enterprise-wide CLM solutions is to help businesses proactively manage their contracts and ultimately drive enterprise value.