contract management software procurement Archives

Jun 14

The Undeniable Value of Procurement Managed Services for Portfolio Performance

By michael Private Equity No Comments

Operating partners always search for innovative strategies to optimize portfolio companies’ performance.

Procurement, an often-overlooked area, presents a remarkable opportunity for cost optimization and improved operational efficiency.

The key lies in procurement-managed services.

The Game-Changing Nature of Managed Services

Managed services bring a fresh, data-driven strategy to procurement, transforming this traditionally administrative function into a powerful value driver. Backed by cutting-edge analytics and deep industry expertise, these services rapidly become a game-changer in procurement.

The Power of Intelligent Buying and Smart Spending

By shifting to managed services, one can realize an immediate 8% to 12% reduction in purchase costs. This is enabled by sophisticated analytics and a network of experienced procurement professionals who provide comprehensive support.

The approach is all about intelligent buying and wise spending, delivering sustainable savings across all spending categories.

Leveraging Volume Aggregation and Expert Insight

Managed services offer the advantage of volume aggregation and expert insight.

By aggregating demands from multiple clients, they can negotiate better prices, particularly in low-spend areas. Moreover, their scale provides deep expertise and real-time market insights across various categories, allowing us to learn from industry leaders and enhance our capabilities.

The Significant Cost Savings of Strategic Procurement Activities

The potential cost savings from strategic procurement activities are significant.

Consider this: one company slashed its operating costs by 19% by outsourcing its entire purchasing function. Another firm captured average savings of almost a third in its first three significant categories tackled following establishing a new central purchasing function.

The Need for a Well-Informed Perspective in Transitioning

Yet, like any strategic decision, moving to procurement-managed services must be made with a well-informed perspective. While effective for transactional activities, labor arbitrage can limit savings in strategic buying activities that require close internal cooperation.

Capturing the benefits of demand and specification management, which can account for 40 to 50 percent of total savings, also requires close collaboration with other business functions, which can be challenging for an outsourced provider.

The Transformational Impact of Procurement Managed Services

Procurement-managed services represent a significant opportunity for operating partners.

Leveraging advanced analytics, expert knowledge, and industry best practices can transform the procurement function of your portfolio companies into a strategic asset.

As always, it’s essential to approach this with a clear understanding of your portfolio companies’ unique needs and capabilities to ensure a successful transition.

As an SAP Ariba™ Gold Partner, Premikati is a leading services provider for all facets of Ariba™ and procurement in general. To contact our team, click here.

Apr 04

Contract Lifecycle Management

By Parker Sproul Procurement No Comments

Contracts are the backbone of modern business. They serve as the foundation for relationships between parties, whether it’s a company and its employees, a supplier and a customer, or a vendor and a partner. However, managing contracts can be a complex and time-consuming process. This is where Contract Lifecycle Management (CLM) comes in.

CLM is the process of managing contracts from initiation through execution, all the way to termination. It’s a crucial component of any business, ensuring that contracts are well-structured, compliant, and ultimately, profitable. In this article, we’ll delve into the key aspects of CLM and how it can benefit your organization.

The Lifecycle of a Contract

Before we delve into CLM, it’s important to understand the different stages of a contract’s lifecycle. There are typically four phases of a contract lifecycle:

Initiation: This is the stage where a need for a contract is identified. It could be a request for proposal (RFP) from a vendor or an employment agreement for a new employee. During this stage, parties define the scope of the contract, identify the key stakeholders, and establish the terms and conditions.
Negotiation: Once the scope and terms are defined, the parties negotiate to reach an agreement. This is where the details of the contract are fleshed out, including payment terms, delivery schedules, and service level agreements (SLAs).
Execution: Once the parties have agreed to the terms, the contract is executed. This involves signing the agreement and exchanging copies with all parties involved. During this stage, it’s important to ensure that all parties understand their obligations and that the contract is compliant with all relevant laws and regulations.
Termination: Finally, when the contract reaches the end of its term or when the parties decide to terminate it, the contract is closed. This may involve a handover of services, payment of any outstanding fees, and the return of any assets.

The Benefits of CLM

Increased Efficiency: By streamlining the contract process, CLM can save time and increase efficiency. Automated workflows can ensure that tasks are completed in a timely manner, reducing the risk of delays and errors.
Improved Compliance: CLM can ensure that contracts are compliant with relevant laws and regulations. This is particularly important in industries such as healthcare and finance, where non-compliance can result in significant penalties.
Better Visibility: With CLM, all parties involved in the contract have access to the same information, providing greater visibility into the contract process. This can help to prevent misunderstandings and disputes.
Reduced Risk: By ensuring that contracts are well-structured and compliant, CLM can help to reduce the risk of legal disputes and financial losses. This is particularly important for high-value contracts and those with long-term commitments.
Increased Agility: With CLM, contracts can be easily updated and modified as business needs change. This can help to ensure that contracts remain relevant and beneficial to all parties involved.

In today’s fast-paced business environment, effective contract management is essential. By implementing CLM, organizations can streamline the contract process, improve compliance, reduce risk, and increase efficiency. Whether you’re a small business or a large enterprise, CLM can help you to manage contracts more effectively, ultimately driving profitability and success.

For your large enterprise CLM needs, visit our partner Icertis at www.icertis.com

Oct 05

Contract Management Software Boosts Quick Wins for Procurement Teams

By Parker Sproul Procurement No Comments

Contracts are the heart and soul of procurement operations. Even a few outdated processes can slow down your team and impact supplier relationships. A modern contract management system, however, can eliminate many long-standing painpoints, save time, and even enhance communications with suppliers in ways that may lead to greater trust and better deals. The following are just a few reasons that robust contract management is a big win for your procurement team:

Easily Search Using Keywords

Do you know where all your contracts are? Do you know which suppliers provide which items without having to go on a wild goose chase? A good contract management system helps centralize your contracts in an indexed database so you can easily search for whatever contract information you need, even on the go.

Blaze Through Contract Processes With Templates

Most procurement teams send a lot of very similar contracts that go on to follow very similar processes. Instead of starting over from scratch every time or using makeshift methods (like the “find” function) can result in errors. Contract management based on SAP Ariba enables the use of templates to manage contract cycles that behave alike. By using templates, your team can ensure that all changes relevant to the supplier at hand have been made accurately and consistently across the board, more effectively and efficiently than other, outdated methods. Even if entire contract templates don’t sound suited to your business, SAP Ariba can handle a full clause library so your team can pick and choose as needed.

Templates help ensure agreement terms are in line with your company’s legal advice from the start, speeding up contract creation and completion to unprecedented speeds. This doesn’t mean you’re locked in, though. SAP Ariba-based contract management also allows for non-standard agreements which require closer review.

Information Dashboards and Notifications

When one of these nonstandard agreements comes through, all relevant parties can receive a notification to review the requested changes. This helps eliminate minor changes that can turn into big risks that might otherwise go unnoticed without a templated system. This helps ensure a healthy start for buyer and supplier alike.

Other information dashboards can present important info in a quick, digestible, easy-to-under format. Find data on all of your contracts like contract duration, bids, and upcoming important dates.

Alerts for impending contract renewal dates can offer teams enough time to re-evaluate each supplier and research alternatives before the renewal date instead of being blindsided when the renewal date has come and passed. This way, your team can enter negotiations well prepared as well as save everyone time in the process.

Manage Compliance And Performance

Including managing compliance for nonstandard contracts and mitigating many of the associated risks, a good contract management system can manage both internal and external compliance concerns. Whether compliance from a regulatory body or an internal expectation of performance and quality, SAP Ariba can ensure that the entire procurement process is visible and everyone involved is compliant to all relevant standards so any issues can be dealt with early, not once they’ve already caused a problem.

Esignatures For Better Speed and Accuracy

Pens are a thing of the past for procurement contracts. Esignatures bring a lot of benefits to the table for procurement teams. Not only is it much, much faster for everyone to sign online than to fax or snail-mail back and forth, it’s also safer (in Covid-19 terms and compliance terms!). Esignature software like DocuSign which is the platform of choice for SAP Ariba users walk suppliers through every box that requires a signature or initial to ensure that nothing is missed in the signing process. Esigning software can also send automated reminders to clients to ask them to please sign the contract, saving your procurement team a lot of time, leg-work, and chasing.

Nurture Supplier Relationships

All of the things combined help you nurture relationships with your clients. Your team will have more time and more energy to truly engage with suppliers to establish trust and rapport—two qualities of a great buyer-supplier relationship that can easily net your team better deals and priority communications.

See Your Best-Value Suppliers At A Glance

A proper contract management system is also able to pull all of the above together to show you which of your suppliers are the best value based on the data you have provided. Based on data, good procurement software can let you know which suppliers to focus on in order to make the greatest impact. That may mean deepening partnership opportunities with some suppliers but it may also call attention to low performers so changes can be made as soon as possible.

If you want to see what we can do for you with our SAP Ariba-backed contract management system, reach out to us today.

About Premikati

Premikati is a woman-owned business of procurement experts providing best-in-class software to maximize your company’s ROI.

Our award-winning team has a 100% success rate implementing on-time and on-budget, due to our agility, leanness, operational experience, and the ability to tailor the transformation process from C-level to end user. (For more information, visit www.premikati.com)

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