The True Value of Contract Intelligence – New Briefing Paper

If you missed our webinar with Seal Software a couple of weeks back, we’re pleased to say we cover the same ground and more in a new briefing paper, titled The True Value of Contract Intelligence; it is free for readers to download here . “Contract intelligence” in our definition is the potentially useful and important information and data found in supplier contracts that every organisation hold, but few truly understand, utilise or exploit.

In the paper, we look at why procurement executives should pay attention to contract management (some still do not, unfortunately), and explain why the concepts of risk and opportunity are central to everything in contract management. We then get into the value of contract discovery and what exactly we mean by contract analytics. It is a paper that starts with some relatively straightforward issues, then gets into what for many organisations will be more in the way of leading-edge thinking.

Remember, however good your procurement process might be, if you fail in the contract management phase, the end result in terms of supplier contribution will be poor. And procurement will be blamed, even if actually it is a contract management failure!

We will have a couple of excerpts from the paper here over the next week or two, starting today with some of the relatively basic questions, but do consider reading the whole paper.

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The True Value of Contract Intelligence (excerpt)

Contracts sit at the heart of the procurement role, at the heart of the relationship between buyer and seller, and at the heart of the imperative to seek the competitive advantage that organisations strive to achieve.

Now that is all very clear, and one might even wonder why exactly we are starting this discussion in such an obvious manner. But consider this: how many organisations can answer even basic questions about their supply contracts with any certainty and confidence?

The Basic Questions ...

  • How many contracts do you have in place with suppliers?
  • Where are they – can you get access to any given contract quickly and easily?
  • Who is the “owner” for each contract, and how well does that individual understand the contract?
  • What are the key risks in the contracts - for example, are there any onerous terms in those contracts that put you at a disadvantage?
  • What value opportunities are contained within the contracts?

If those and similar questions are posed, most procurement people and functions, and indeed most business budget holders, will start looking a little – or maybe very – nervous. The more confident may talk about a contract database, repository or similar. It might even be electronic rather than a large filing cabinet or cupboard! But ask how they know that all the contracts applying to the organisation are contained with it, or how they know whether all the most important contracts are identified, and in many cases, uncertainty at best will creep into their response.

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