According to data from Healthcare Finance, roughly 60% to 80% of an organization’s transactions are governed by contracts.
Contract management reporting is a competency that allows businesses and organizations the data analytics they need to control revenue leakage, comply with applicable laws and regulations, and achieve other beneficial outcomes. All of this is achievable if the contract management process is proactive and well-organized.
Businesses that optimize reporting with contract lifecycle management software throughout the contract lifecycle stand to gain the most from their contract management practices.
According to data from Healthcare Finance, roughly 60% to 80% of an organization’s transactions are governed by contracts. Contract agreements impact day-to-day activities within a business, from the price of supplies to factors that control challenging project timelines. Creating contracts with a solid plan for tracking success may significantly impact daily operations.
The National Association of State Procurement Officials (NASPO) suggests holding kick-off meetings and preparing a contract administration plan. Kick-off meetings serve as opportunities for businesses to clarify details like who will see the contracts, which tasks one is responsible for, how a draft will be created, and possible issues in contracts that require close monitoring.
Specific departments will have a chance to voice concerns or priorities in contracts before a draft is complete. Lastly, there should be a clear understanding of who will conduct milestone reviews and communicate updates to related parties before a contract renewal.
Programs within an organization all have their strengths and weaknesses. A company seeking to optimize contract management reporting may wish to address a prior system’s weakness. A few common contract management problems include:
Identifying specific issues your business plans to address can help guide processes in contract management reporting. A company that is worried about compliance and timeliness might want specific reports for each new stage of a project, primarily when the contracts change complete steps in the negotiation or approval process. Contract management reporting lets the legal team know that they are, for example, taking three weeks to
It is not uncommon for branches or departments within a business to operate independently in enterprise organizations. Even if specific divisions work with the same contract at specific points, there may not be many opportunities for the legal department to provide or gain insights from another team within the organization. The risk is that legal departments may start to behave as silos, using contract management software systems that do not communicate freely with other systems across the enterprise.
Transparency and shareability is key. General counsel, financial officers, and strategic project leaders require readily accessible reports, data analytics, information and materials. Working within a shared system of data analytics and information like a contract lifecycle management system can ensure you get access to performance data across different departments.
ment reporting collects data that top executives can use to assess the value of contracts and the contract management system itself.
What are the key elements to quantify contract performance? The first piece to think about is the contract agreement. Defining and rating acceptable performance requires KPIs (key performance indicators) and standards for:
Contract management reporting plays a critical role in a contract’s success. Ineffective or non-existent reporting makes it easy to overlook potential cost savings or miss potential risks until they become a problem. Staying involved with real-time reports throughout the contract lifecycle helps both the contract owners and organization complete successful projects. To assess contract progress effectively, it is recommended that you clarify:
Get a straightforward process for conducting KPI reviews linked to contracts.
Accor also struggled with their existing CLM’s inflexibility for managing permissions, something that became especially cumbersome each time the company went through a reorganization.
“It was next to impossible to reallocate contracts or populations of contracts from one group of users to the new group of users. It’s almost hard coded, if you like,” Richard said. “I had to go to the [existing CLM’s] implementation team for topics or for subjects that I was not able to do. So it depends on how autonomous you’d like to be, but I had a greater need for autonomy than [the existing CLM] would allow me to do.”
Often asked by colleagues to accomplish things in the system that weren’t possible, the Accor team carefully documented all the capabilities and functionalities that their existing CLM could not do and began to draw up a list of requirements for its replacement.
“We gradually built up an idea of everything that we were missing, and luckily [with] the Board and the Finance team, we were able to convince them that now was the right time to change solutions. So that’s why we started our RFI process and looking elsewhere,” Richard said.
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.
