Improve agile procurement workflows with CLM

Businesses waste precious time and money on outdated procurement and contract management processes. Agile procurement provides a solution. This flexible method can lead to procurement efficiencies across the board. Integrating a contract lifecycle management (CLM) system into agile workflows streamlines procurement operations.

Discover how this powerful synergy can revolutionize your procurement strategy.

What is agile procurement?

Agile procurement applies the principles of agile methodology to purchasing. This dynamic approach to procurement focuses on flexibility, collaboration, and continuous improvement. Teams work in short sprints, enabling a rapid response to changing needs. An agile procurement methodology emphasizes communication and prioritizes value delivery, adjusting strategies based on feedback.

By embracing agile procurement, organizations can address evolving requirements. The goal is to streamline procurement through a fluid, customer-centric approach.

The benefits of agile procurement

Businesses that adopt agility can reduce lead times and achieve better outcomes. 

Consider these benefits:

1. Shorter lead times: Agile procurement reduces procurement timelines. Businesses can deliver goods and services faster.
2. More efficient processes: Agility streamlines workflows, eliminating unnecessary steps for quicker decision-making. These efficiencies translate into smoother, more effective procurement operations.
3. Higher quality outcomes: Agile procurement delivers value, and meeting stakeholder needs leads to better results. Businesses can expect increased customer satisfaction and successful project delivery.
4. Enhanced innovation: Agile procurement’s creativity leads to the development of imaginative solutions. Innovative technology, such as CLM systems, cuts down on labor-intensive manual processes.
5. Cost efficiencies: Teams can identify cost-saving opportunities to optimize resources and reduce waste. Lower costs improve the financial performance of the organization.
6. Improved contract management: Contracts are a key component of the procurement process. Agile contract management focuses on flexibility, collaboration, and responsiveness to change. Procurement teams can increase contracting efficiencies by implementing agile CLM software.

Agile procurement examples

Organizations adopt agile procurement to improve responsiveness to market changes and customer needs. Below are some real-world examples that illustrate the successful application of agile procurement:

Air France: Transforming cargo operations

In the world of freight, time is of the essence. In 2019, Air France KLM Cargo Operations identified a need to improve efficiency in its cargo truck management system. Lean Agile Procurement (LAP) presented a solution. The organization required a new booking system within a six-month time frame. In addition to the short timeline, the project had other challenges. It depended on an outsourced, remote team that was able to produce an innovative product. This approach included remodeling cargo operations’ vendor sourcing policy.

Frédéric Jacques, Head of Cargo Operations IT, assembled a cross-functional remote team using LAP principles. They formed a 12-member team, including business representatives, and held a half-day workshop to align the team on common goals. Next, a one-hour webinar briefed four preselected vendors on the selection process. The vendors then met at “POCAthlon” in Amsterdam to develop proposals. At the end of the workshop, the project heads chose the winning vendor. The project started one week later with the team already in place.

The results of this switch to agile procurement included:

• Completed within planned timeline: The project kicked off as planned one week after the six-week vendor selection process.
• Achieved milestones: An initial product release occurred two months after the project started. The team achieved all critical milestones in the following three months.
• Selected the right partners: LAP enabled building the best team to ensure success. Through a collaborative process, the team was able to achieve a faster time to market.

Rush University Medical Center: Boosting procurement efficiency with CLM

The healthcare industry relies on efficient procurement to better serve its patients. For Rush University Medical Center, procurement inconsistencies impacted service delivery. Irregular procedures delayed approvals, increased costs, and caused contract tracking issues. The organization needed a centralized contract management process across all its medical centers. Agiloft stepped in to overhaul Rush’s procurement procedures through its CLM system.

Rush faced many challenges in its contract management process. Differing standards allowed departments to initiate contracts without proper review. This lack of review procedures led to agreements signed without legal oversight. Contract approvals could take up to 200 days, prompting frustrated staff to bypass formal processes. The absence of a unified tracking system limited contract visibility, complicating budget reconciliation and increasing overspending risk. The overwhelmed legal team’s workload prevented them from prioritizing critical agreements.

Rush recognized a need to adopt more agile procurement methods. As Dustin Slodov, AVP of Procurement and Systems, said, “We needed to move away from that loose system of controls and bad tracking.” The organization decided to replace its outdated contract management system. Agiloft’s agile CLM platform was a natural choice. It included standardized contract review metrics, ERP system integration, and employee training.

Key outcomes of this switch to Agiloft’s CLM platform included:

• Quicker approvals: Rush experienced a significant reduction in contract approval time from 70 to 30 days.
• Improved protocol adherence: Before Agiloft’s CLM, vendors slipped through the procure-to-pay process. By following procurement procedures, this number decreased by 80%.
• Streamlined legal workflows: Agiloft reduced workloads so teams could focus on critical contracts.
• Centralized contract management: Better contract visibility doubled the number of contracts processed every month. This oversight improved budget management and forecast accuracy.

Advantages of implementing agile procurement CLM

Agile contract management is a critical element of efficient and collaborative procurement. A robust CLM platform delivers measurable business value through better visibility and optimized workflows. 

The benefits of CLM for agile procurement include:

1. Enhances vendor contracts

CLM platforms streamline procurement agreements through:

• Workflow automation: Manual procedures slow down contract management. Automating these procedures results in an efficient, smooth process.
• Contract standardization: CLM systems include contract templates and clause libraries for simplified drafting.
• Enhanced contract routing: Agiloft’s AI-enabled contracting system directs contracts to the correct teams based on predetermined rules. Direct routing speeds up the approval flow.
• Workload efficiencies: CLM platforms help teams complete tasks on schedule. Automating administrative tasks eases the workload.

2. Reduces time-to-contract

Time spent locating contract data across multiple systems increases time-to-contract. These delays affect service delivery and productivity. A CLM system decreases the contract lifecycle. For example, through Agiloft, Portland Community College (PCC) reduced its time-to-contract by 60%. The solution led to greater budget understanding and more time spent supporting students.

3. Builds stakeholder relationships

Effective procurement relies on vendor and stakeholder relationships. CLM platforms with centralized communication enhance stakeholder management by aligning all parties’ expectations. Shared oversight keeps all relevant stakeholders informed. This proactive approach means no missed contract approvals or renewals. Stakeholders feel more valued, which strengthens relationships and optimizes performance.

4. Centralizes contract data

Contract professionals lose considerable time searching for contracts or details within multiple documents. Procurement involves finding obligation statuses or purchase orders from various suppliers. A unified, centralized view of contract information reduces time spent locating procurement contracts.

5. Scales according to business needs

What is the difference between a traditional and agile CLM? The answer lies in their implementation. Traditional CLMs often involve complicated setups that can lead to higher expenses. In contrast, agile CLMs provide a straightforward and effective implementation process. Expert training and support assist your business as it evolves and expands. This scalability is ideal for budget-conscious businesses that want an agile procurement solution.

Discover how Agiloft’s leading CLM platform can transform your agile procurement process. Contact us to request a personalized demo today!