As business competition increases, Deloitte’s 2017 Global Chief Procurement Officer Survey notes that procurement “has an invitation to create a strategic advantage for the businesses they serve.” CPOs who participated in the survey overwhelmingly believe analytics will have the greatest impact on procurement over the next two years.
Even though CPOs unanimously recognize the value of analytics, few of them use contract analytics to drive decisions. Deloitte’s report recommends adopting technologies to provide insights throughout the entire supply chain lifecycle. The Icertis Contract Management (ICM) platform fulfills this need in four critical areas.
Cycle Time Visibility
Enterprise companies are under pressure to improve efficiency. Cycle times must be reduced to remain competitive. Where do these efficiencies come from? Less than five percent of contract cycle time is related to performing a task. Ninety-five percent of contract cycle time can be attributed to non-productive delays like waiting for approvals, duplicating work and unnecessary repetition. When you consider that global enterprises create tens of thousands of contracts each on an annual basis, it’s easy to see how important visibility can be.
Contract analytics provide transparency into every stage of the contract lifecycle, allowing you to identify inefficiencies and discover opportunities to improve processes without investing an excessive amount of time doing manual analysis.
Tracking Contractual Deviations
An unknown deviation from a normal procurement procedure can be costly. It may signify an honest mistake, or point to an intentional breach of contracting standards. Advanced contracting analytics allow procurement professionals to:
- Ensure a competitive bidding process by identifying potential instances of bribery or corruption, such as a failure to use the standard procedure.
- Review the cost and quality of a supplier’s products, and compare them with established standards.
- Easily identify the areas where suppliers have deviated from standard requirements.
Risk was one of the top concerns voiced by CPOs in the Deloitte study. Risk can take many forms, from supply chain disruption due to a supplier’s financial instability; to penalties for noncompliance in government contracting.
Contract analytics can help procurement professionals identify risk through user-configurable reports that incorporate data from financial, procurement and legal departments. Risk is reduced by quickly identifying deviations from standard procedures, off-contract buying, and cost overruns. This provides easy vetting of suppliers, offering easy access to data for prior and existing contracts with any given company.
Automatically Tracking Renewal Dates
Contracts that are set to renew or expire provide opportunities to renegotiate terms or change suppliers, increasing revenue and decreasing unwanted costs . Advanced analytics can be configured to provide notice when contracts are nearing their renewal dates and enable a customized view of contract compliance and performance data across departments. These features help an organization maximize renewal opportunities.
To learn more about how the ICM platform provides intelligent analytics, download the whitepaper: Value Creation in Enterprise Contract Life Cycle Management.