How much money is poor contract management costing you?
Between audit risk, compliance penalties, and process inefficiencies, you could be spending millions without even realizing it.
It's ironic. The very mandate of the procurement department is to reduce costs. And yet, many organizations are wasting money with manual, redundant and inefficient contract management processes.
If you're not sure how good contact management can save your organization real dollars, check out the video series we're kicking off this week:
A while ago, my team and I were brought in to assist an organization that acquired another company and needed to reassign and renegotiate contracts with over 200 suppliers.
Now, this company’s contract management process was a hybrid of filing cabinets, folders on a shared network drive, and Microsoft Excel.
So I proposed to the CFO that as part of our engagement, we’d upload all of these newly reassigned and renegotiated contracts into our tool, OneView.
But his response was a typical one: “Why do we need to do that? Noone’s complaining about the filing cabinets.”
And that’s true most of the time - no-one complains. But that doesn’t mean that the problem isn’t there, it’s just being ignored.
To this executive, contract management meant asking a full-time employee to take on the additional responsibility of making sure that all of the contracts were filed in a filing cabinet or in the shared drive and then tracked in Microsoft Excel.
So I knew I had my work cut out for me. Because convincing a group of overworked and underpaid procurement people that OneView is going to make their lives better is a lot easier than convincing an executive to solve a problem that he doesn’t think exists.
So rather than getting into an existential argument with him about “if a procurement person cries in a forest and there’s no-one’s around to hear him, does he make a sound?” I instead told him that I would do a quick assessment of his contract management process in five areas.
The five areas we looked at were:
- Avoiding the cost of a failed audit
- Avoiding the cost of software compliance penalties
- Reducing the cost of annual maintenance renewals
- Decreasing the cost of software licenses
- Increasing the efficiency of the procurement department
I would show him how he could increase his annual cost savings by up to 50% and see a 75% gain in efficiency within his procurement department. And then I’d leave it up to him to decide whether if he wanted to do something about it.
We quantified the amount of money the CFO could save by making a few simple, but critical tweaks to his contract management process and implementing a solution like OneView.
This story ends well, because this CFO and his company became one of our first clients. But since then, we’ve seen those same five cost savings benefits of good contract management come up in other organizations we work with time and time again.
So over the next few videos, I’m going to walk you through how specifically contract management can generate cost savings in those five areas:
- Efficiency gains
So if you’d like to get ahead of the class and grab immediate access to this series of videos, head over now to oneviewnow.com/savings and sign up.
We’ll send you a link to this series right away.
Also, if you’d like a free contract management process review, we’ll show you how you can reduce the time you’re spending on contract management by up to 75%. Just head over to oneviewnow.com/review to claim your free session.
Thanks for watching.