Many organizations implement contract management solutions to create efficiencies in the contract authoring and implementation process while also reducing risk. Others use contract management as a means to drive compliance and notify stakeholders of opportunities to take action (rebates, timing of sourcing events, etc.). But going beyond these areas, contract management technology can also play a key role in tracking suppliers and other third parties, as well as help manage supply risk.
As we’ve noted before, the ultimate objective for any company in building this level of transparency should be enabling full visibility into all contracts with required levels of metadata in a structured, commonly accessible format, ideally integrated with related software infrastructure. To enable this, you need a number of factors, including the following:
- A complete, federated view across all contract repositories (including those that might not be referred to as “repositories,” such as an employee’s hard drive where a rogue contract may lurk)
- The ability to identify accurately and fully extract metadata to required levels – where metadata ranges from basic aspects such as price, quantity, and time of delivery to more complex issues such as counterparty credit risk and commodity price risk (buy/sell)
- The capability to capture and track content as it is authored or becomes available – including contract associated with existing contracts
- The ability to manage storage and access levels to different contract information
- Integration with related software infrastructure, including e-sourcing tools, supplier information management (SIM), supplier lifecycle management (SLM), customer relationship management (CRM), purchase-to-pay (P2P), and even design/engineering systems (in cases of collaboration with suppliers where IP ownership and co-mingling is in question).
A contract lifecycle management (CLM) tool alone is not enough to enable this visibility. It’s what you do with the tools and the partners of CLM providers that delivery contract discovery capability, such as Seal Software, that matter most. And don’t forget to tie contract visibility into a broader procurement information architecture framework!