Many organizations struggle to control how contracts are created, managed, and monitored. In fact, poor contract management practices lead the average company to lose 9% of annual revenue. Issues can range from not knowing which items are on contract, to what vendors are being used, or even if suppliers are charging the correct prices.
The challenge with contract management stems from the fact that administrators often can’t control who’s generating contracts, where contracts are stored, or how faithfully vendors are complying with contract terms.
In this post, we’ll go over what’s involved in contract management, how a solution like Infor Contract Management can simplify it, and how a proven partner like RPI Consultants can help you get up and running with Infor Contract Management quickly.
What’s more, we’ll explain why it’s in healthcare and public sector organizations’ best interest to implement Infor’s Contract Management solution now—even if they’ve delayed their cloud upgrades due to Infor’s extension of on-premise support until 2030.
What is Contract Management?
Contract management is an important component of Supply Chain Management (SCM), providing users with a centralized contract repository. It comprises everything involved with controlling agreements between companies as well as managing negotiations, executions, drafts, and making modifications to such agreements.
Organizations can reduce risk and conflicts that arise between parties—and stay compliant with industry regulations—simply by establishing clear processes and procedures for negotiating and managing contracts. Because it helps optimize spending and maintain quality standards, contract management should be part of your supply chain strategy.
Why is Contract Management Important?
A good contract starts with a solid foundation of legal and contract administration knowledge. By standardizing and automating the way you structure and write contracts, your organization can more readily keep procurement costs in check, reduce the potential for legal and regulatory exposure, increase contract lifecycle visibility, and build stronger relationships with vendors, among many other benefits.
Infor Contract Management is one application that manages this process. It’s a module within Infor Financials & Supply Chain Management (FSM) that enables your organization’s legal department and/or contract administrator to take control of how contracts are stored. The application also indicates the language contracts need to contain, and which questions must be asked of suppliers.
Why Implement Contract Management before CloudSuite?
Transitioning to Infor CloudSuite V11 represents one of the biggest opportunities to match modern business practices with technology that is data-driven, role-based, and builds best practices from the ground up.
To experience the benefits of CloudSuite, however, your organization needs to cultivate secure customer to supplier relations. You can achieve this by implementing the Infor Contract Management application now. This will strengthen trust and reputation, while leveraging system functionality to streamline business processes ahead of your cloud migration.
Below we discuss the value Infor Contract Management provides to your organization and why it makes sense to implement it now.
Infor Contract Management Protects Your Business
The Infor Contract Management solution delivers the flexibility to create and manage contracts that meet each organization’s industry, sector, and company-specific needs. For example, hospitals and other healthcare companies rely on contract management for ensuring the seamless delivery of medical supplies from trusted vendors.
This involves negotiating and maintaining contracts with suppliers to guarantee a consistent and cost-effective supply of essential items, such as medications, surgical equipment, and personal protective gear.
Effective contract management ensures that healthcare organizations maintain the quality and availability of supplies critical to patient care. It also helps them manage costs and comply with regulations, such as the Stark Law and Anti-Kickback Statute, which prohibits improper financial relationships and referrals in healthcare supplier contracts.
It’s clear that implementing contract management is one of the first things your organization can do prior to moving to the cloud; RPI Consultants can work with you on many of the pre-migration processes, such as workflow and system analysis, establishing technical and functional requirements, future-state process mapping, and more.
In addition, the contract management application itself provides considerable benefits, including helping your company:
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Save money and control expenses
- Identifying cost leakage: You’ll be able to track your company’s spending more effectively, by covering all types of contracts, including service contracts. Standardizing how contracts are structured and written is a significant step you can take toward maintaining procurement, while reducing the potential for legal and regulatory exposure.
- Optimizing negotiations: With improved visibility into price and compliance information, your team can negotiate more effectively, standardize purchasing practices, and save your company money.
- Finding additional opportunities: Tracking spend, and regular analysis of product category usage can help identify future price reduction opportunities.
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Mitigate and manage risk
- Compliance and regulatory adherence: Having access to powerful audit functionality, including tracking the history of all changes, helps ensure compliance.
- Contractual risk identification: With transparency and centralized access, you’ll be better able to monitor compliance with established organizational standards—and intervene, when necessary, to prevent non-conforming contracts from being executed.
- Dispute resolution: Infor Contract Management enables greater control by legal and/or contract administration over contract terms, clauses, and conditions—and provides easy, secure, and auditable access to all contract-related documents in one location for the entire company.
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Improve operational efficiency
- Streamlining processes: Infor Contract Management accommodates both products and services within a single document, and allows you to handle multiple contract sections, change orders, and revisions. You can also receive alerts for key contract events, monitor encumbered funds, and check against contract maximums. Healthcare organizations specifically can build out Infor Contract Management to integrate with other systems, such as Epic.
- Enhancing collaboration: The benefits of Infor Contract Management include being able to work more collaboratively, both inside and outside of your organization. Improving communication and coordination between parties saves time and boosts efficiencies.
- Automating routine tasks: Doing so eliminates the need to manually search for contracts and track key dates (including renewal dates)—and frees up time for employees to focus on more value-added work.
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Strengthen relationships with vendors
- Customer to supplier relations: Improve relationships with suppliers and address errors, delays, and disputes while maintaining trust through system-driven communication.
- Supplier collaboration: Support manufacturer, distributor, and group purchasing organization (GPO) supply chain agreements with an automated solution.
- Timely payments and incentive management: Receive alerts for key contract events, including expiring supplier diversity codes and expiring supplier contact certifications.
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Set a strong foundation
- Organizing contracts: Contract Management helps simplify the contract creation process, allowing buyers to spend more time on strategic tasks. With Infor’s Strategic Sourcing module, information already captured with the application can automatically populate the contract templates in Contract Management.
- Data centralization: If someone needs a contract similar to one executed previously, it’s easy to copy the existing contract in Contract Management and modify it as needed. And negotiating contract details becomes easier with “what-if” contract modeling.
- Standardizing contract language: The contract ‘Articles, Terms & Conditions’ repository can help save significant time even when creating a contract from scratch. It provides a library of T’s and C’s that have been crafted and approved by your organization, and users can select what is applicable for each contract – users will no longer need to worry if the right information is being collected.
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Get better visibility into the entire contract lifecycle
- Real-time data access: Infor Contract Management reports on contract performance to ensure you stay on top of critical milestones and deliverables; it’s a better way to track rebates and to know when to renew contracts. It can also provide you with a comprehensive view of corporate and other non-purchasing agreements.
- Reporting and analytics: With a clear picture of who’s buying what, from whom, and at what price, organizations can gain greater oversight over purchasing activities. An automated solution helps verify that the correct prices are being paid and that suppliers are adhering to tiered pricing agreements, fulfilling rebates, and other terms of the contracts.
- Customizable ListViews: With transparency and centralized access, your company is better able to monitor compliance with established organizational standards—and intervene, when necessary, to prevent non-conforming contracts from being executed. And access to powerful audit functionality, including tracking the history of all changes, helps ensure compliance.
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Ensure scalability for your organization
- Increased scalability: Infor Contract Management is set up to scale easily with the ability to handle an ever-increasing number of contracts. It’s also set up with templates that use standardized language, so your team can move faster by not having to create contracts from scratch.
- Adapting to market changes: Organizations like yours need to anticipate ever-shifting market conditions and customer expectations. Automating your contract management process allows you to adapt quickly to changes, as well as to experiment with offering new products and services.
- Ensuring readiness for mergers and acquisitions: An important part of the M&A process is reviewing potential partners’ commercial agreements. Having an automated contract management system saves valuable time for all parties.
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Ensure compliance
- Audit preparedness: A contract management solution makes it easier—and less costly—to provide objective, timely information to auditors. It does so by simplifying the process of gathering documents; removing data redundancies; and providing a complete history.
- Documented workflow: Having a documented contract management workflow helps ensure your contracts comply with laws and regulations—by making all parties aware of their obligations, and that necessary approvals or documentation requirements are fulfilled.
- Data security: An automated solution will help your organization stay on top of this critical part of contract management. Infor Contract Management includes various data security features and complies with regulations and standards related to data security.
Realize the Benefits of Infor Contract Management with RPI
Many organizations struggle to control how contracts are created, managed, and monitored. This could range from not knowing which items are on contract, to what vendors are being used, or even if suppliers are charging the correct prices.
If this sounds familiar, it’s time for a solution that’s designed to simplify the creation, management, and monitoring of contracts. As a part of Infor FSM, the Contract Management application gives control back to organizations like yours—and helps by supporting other Infor systems, such as Inventory Control.
RPI Consultants has more than 20 years’ experience helping businesses implement and optimize their ERP solutions. We can help your organization take a proactive approach, not only with automating contract management, but moving to Infor CloudSuite as well.
To learn more about how we can help you get started with contract management, register for our upcoming LinkedIn live below.