To start off, enterprise contract management (ECM) solutions are information technology that give the company the optimal combination of best practices and technology to effectively and efficiently manage its contractual agreements, both within the organization and with entities beyond its borders.
Enterprise contract management benefits your business by managing all contract data in one central place. This central management offers many unique benefits unachievable without an ECM system.
With an enterprise contract management system, all contracts will be digitalized and online. This benefits your business because anyone within the company can access the contracts remotely, eliminating wasted time spent manually searching and reading contracts. Thousands of hours are wasted each year searching for contracts in unorganized conditions, only to find the contract which the employee is looking for may actually be lost. This situation is completely avoided when an efficient enterprise contract management system is implemented within an organization.
Anuj Saxena of IACCM claims in his Enterprise Contract Management guide, “Most organizations lack the necessary controls, processes, and infrastructure needed to manage contracts at every stage of their life cycle. As a result, organizations lose billions of dollars every year due to contract leakage, suboptimal contract terms, unredeemed rebates, slow contract cycle times, renegade contracting processes, and missed savings opportunities.” These billions of dollars can easily be saved by simply implementing a contract management system. Contract leakage, suboptimal contract terms, unredeemed rates, slow contract cycle times, renegade contracting processes, and missed savings opportunities are far less likely to occur with an ECM system than without.
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With an enterprise contract management system, the user is able to set up automatic tracking of things such as deadline expirations with e-mail alerts. These alerts can be useful because often times, with the chaos of a normal business, these deadlines are overlooked, resulting in disobeying the contract. These deadlines were set for a reason: to avoid the problem that occurs once the deadline passes. For example if a manufacturing business needs a supplier to produce a good by a certain date in order to get the good into production, that manufacturing firm will set a deadline. Not producing by the manufacturer’s stated deadline makes the entire production of the good slow down, if not stop entirely. This situation is easy to avoid with an enterprise contract management system because the deadline will be recorded in the contract and the administration will be notified via email if this deadline is not made, or is in danger of not making the deadline, and the problem will not occur.
Initially an enterprise contract management system will save your organization money through the organization and streamlining of simple contract practices, which were previously made tedious by outdated manual organization practices. After the money is saved and the enterprise contract management system is fully implemented, your business will begin to see the real benefits of an enterprise contract management system and start generating profit from the efficiency gained through the implementation of the ECM system.
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