If contracts are at the center of commerce and business relationships, then integrated data is at the center of those enterprise contracts. You’ve likely heard variations of the phrase “That contract isn’t worth the paper it’s written on.” In the same vein, a contract is only as good as its contract data.
Contract management that is integrated across a platform that includes a single source of verified data truth is going to be much more effective at helping organizations maximize the usefulness of their contracts. In addition to being faster to create (data in the system can pre-populate appropriate fields, for example), it allows for a much more comprehensive view of where else that data is being used — sourcing, procurement, supplier management, etc. This is critical to managing and reinforcing business relationships, and ensuring a company gets the most out of the negotiated terms. The potential benefits extend to managing risk, creating financial opportunities and achieving process efficiency.
Integrated data, mitigated risk.
Rarely does a week go by where the news doesn’t have a story about someone committing a heinous crime, and all the neighbors say “but s/he seemed like such a nice person.” The concept of “trust, but verify” is at the heart of risk management efforts, especially regarding third parties. How well do you truly know those suppliers, vendors, contract employees and others? A single source of integrated Master Data and metadata helps ensure that when contracts are created they contain the correct information about the counterparties involved. In the case of suppliers, this is especially true if your supplier management solution is integrated on the same cloud platform.
Having the latest data in contract management is also critical to achieving compliance, so contracts reflect the appropriate regulatory and industry requirements. In fact, research firm Aberdeen found that an improvement of 55% in compliance can result. Compliance that also extends to spend.
Integrated data, financial opportunities.
If mitigated risk is one reward of integrated contract data, identifying and realizing savings and revenue potential is another. In terms of spend control, having procurement data integrated with contracts will alleviate maverick spend while also alerting teams to advantageous contract terms – discounts, obligations, etc. Research from analyst firm Ardent Partners shows that best-in-class organizations which adopt a robust technology strategy – one with automated processes, integrated workflows, collaborative tools and other advanced features – achieve a 49% improvement in spend under management compared to laggards. For companies still using spreadsheets or even point solutions, there’s no telling what that spread could be.
In addition to the risk management aspect mentioned above, integrated supplier data with contracts is also a relationship optimization strategy. Companies are increasingly reliant on third-parties these days, with the need for more and more specialist skills, knowledge and capabilities. Using a “shared success” approach to building third-party contracts is an opportunity to increase your own company’s potential for innovation, market share and revenue growth.
Integrated data, Process Under Management.
Contract managers, generally the legal department, often operate under the reputational cloud of “bottleneck.” A contract management / CLM solution that provides self-service functionality and integrated data across a cloud platform will vastly accelerate the contract creation process.[/inlinetweet] While many companies still think of CLM as a repository (and many solutions still aren’t much more than that), there is enormous potential in empowering individuals in companies to initiate contracts, whether on the buy-side or sell-side.
Integrated data is the equivalent of putting up guardrails – templates, clauses, workflow is all built-in to the system, along with approval paths. This level of process efficiency can do things like improve sourcing event opportunities, speed up supplier onboarding, reduce sales cycle times. For legal teams it provides 360° accessibility and visibility into all contracts at all times, for at-a-glance status and better reporting.
If you’d like to see how contract management with integrated data on the Determine Cloud Platform can empower your contract process, schedule a personalized demonstration.