Are disorganized contract management processes costing you precious procurement dollars?
Are disorganized contract management processes costing you precious procurement dollars?
Most organizations waste between 3-4% of their procurement spending on excessive transaction costs and process inefficiency. The truth is that your procurement team can only deliver true cost-saving value when they have visibility and accessibility to important contract data from a single, central source of data. And with an agile contract lifecycle management software, they can.
That’s what Agiloft did for Portland Community College (PCC) – the largest institution of higher learning in the state of Oregon. With Agiloft, PCC managed to save $36,000 in annual procurement dollars and reduced time to contract by more than 50%.
In this blog, we’ll break down how they did it, and four benefits your procurement team can derive from an adaptable, scalable, and flexible CLM.
In procurement, a lot of time is spent retrieving individual contracts or searching for specific information from multiple contracts – especially when you’re looking for details like obligation status or purchase orders from different suppliers. That’s why it’s crucial for procurement professionals to have a holistic view of your contract information from a single, central access point.
PCC initially managed their contracts from multiple management systems. They used Microsoft Access, a facilities department project management system, and tracked all their contract workflows via email and spreadsheets. This left important contract data siloed and scattered across the systems, out of reach from procurement staff who needed insight on documentation like purchase orders, active contracts, and task routing.
After implementing Agiloft’s CLM software, PCC contract specialists have immediate visibility into important contract data from a single, unified dashboard. Procurement staff have a 360-degree view of all the contracts that are active and those in line for approval.
As PCC deals with a large volume of contracts and are required to track subcontracts, renewals, and amendments, they needed visibility into how their contracts were related to each other. Agiloft’s related contract feature allowed them to look within a contract and see its entire status and history within a few clicks.
“All of that on one screen without having to look at a massive spreadsheet and figure out how that ties to one another has been a game changer for how we look at data,” said Michael Mathews, Procurement and Contract Services Manager at PCC.
When your procurement team is spending time looking for important contract data in disparate systems, it causes delays in the contracting process, putting your organization at risk of lengthy time-to-contracts or worse — missed opportunities to service your customers better.
That’s what happened with PCC before they implemented Agiloft. The time-to-contract for PCC was 55 days. “Staff would spend a lot of time calling to find out the status of their contracts and that correlates directly to the time they could be spending supporting the education of the students in the college,” said Mathews.
After pivoting to Agiloft, PCC successfully decreased time-to-contract by 60%. With data-driven reporting functions, Agiloft enabled PCC’s procurement staff to have real-time visibility into the full status of each contract and how it aligns with the department’s budget.
“That’s been a huge change for us. Departments and purchasing have a better understanding of budget. Prior to implementing Agiloft, the contracts weren’t encumbered into the budget system until the goods were received…implementing Agiloft has created a bullwhip effect for departments trying to manage their budget. Now we’ve aligned the process so that the budget is encumbered when the contract is signed.”
The difference between an average CLM and an agile CLM is identified by its implementation process. Average CLMs offer procurement complex implementations that end up costing them more than what they initially paid for. Agile CLMs offer an easy and efficient implementation with training and support experts to guide you as your business grows and scales.
With Agiloft, PCC was offered a scaled rollout right from the start. They were given the flexibility of staging their implementation process according to their business needs. Due to department budget constraints, they initially started out with a basic implementation.
“My budget covered the cost [of implementation] completely. I didn’t have to get a budget augmentation with the way that this is scalable, and it’s been wonderful for us,” said Mathews.
PCC gradually began adding more features and functionalities once they realized the value of Agiloft’s scalability. Now, PCC adds implementations every year, if not every few months.
“We have a license with Agiloft, so we have the capabilities. There’s no additional fees and modules that need to be purchased. With Agiloft, you own what you own.”
Procurement teams deliver the most value when they have a contract management tool that centralizes communications with relevant stakeholders. It’s crucial that they build relationships with internal partners and vendors to improve their understanding of stakeholders’ needs over time.
Before they implemented Agiloft’s CLM, PCC struggled with stakeholder management. Departments were sending contracts to vendors without authorization from procurement, which led to missed contract approvals and disorganized communications across the organization.
With Agiloft, procurement staff could seamlessly integrate the tools they use to access contract data and flow information to stakeholders that needed it most.
“Procurement and contract services since implementing Agiloft has received more public kudos from virtually every stakeholder that we have. Members of my team thank me almost weekly for implementing the system unprompted. They feel as though they’re adding value to the process instead of policing it,” said Mathews.
Streamlined communications and contract workflows have also enabled PCC to build stronger supplier relationships.
“We’re finally being proactive rather than reactive with our stakeholders. Our suppliers are pleasantly surprised when we reach out to them under contract renewal, not the other way around. This impacts the perception of those who do business with us and the way that they view PCC.”
If you follow these five steps, you can successfully launch a new ESG program, or uplevel an existing program, in 12 months.
Learn about the 5 key elements for a successful CLM implementation - or any software for that matter - with links to other resources and information.
One critical tool that brings clarity to business is the Statement of Work (SOW), a document that defines the scope, objectives, and deliverables of a project.
