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Contract Intelligence Blog
Oct 11, 2021
For CPG and Retail, Speed and Agility Start With Contract Intelligence
Recently, World Commerce & Contracting (WorldCC) brought together thought leaders from 30 global retail, CPG, and distribution organizations to gauge how they were responding to pressures that today’s supply chain is putting on their organizations.
For these companies, managing complex supply chains amid rapidly changing market dynamics has required a full re-examination of both their relationships with suppliers and the internal processes that govern how supplier relationships are initiated, fostered, and optimized. As discussed in WorldCC’s final report, “Reimagining retail and CPG relationships as an ecosystem of contracts,” contracts and contract data have proven especially critical.
One $20 billion food retailer explained that their supply management process previously involved data (including contract data) from 29 different systems. Over the last year, the number of interfaces required has been reduced to three. The insights provided by a more integrated data flow, together with the scale of workload reduction, is generating a monthly improvement to the bottom line of $102 million.
Key to this is having systems that can integrate with each other, so data doesn’t get siloed in its own system. Per the companies surveyed, this is especially important for contract data, which has historically been difficult to extract, digitize, and integrate into other systems, but can now be addressed through advanced contract lifecycle management (CLM) technology.
Survey respondents report using CLM to integrate contract data into POS and ERP systems, to better manage discount, rebate, and promotion programs. On an advanced front, these systems accelerate the settlement process between parties through the automatic triggering of revised terms when specific quotas or volumes have been met.
Building a Successful Transformation Plan
An executive roundtable conducted by WorldCC in conjunction with the report underscored the importance of integrating contract data into operations systems. In the roundtable, participants discussed the potential challenges companies can anticipate when improving their contract processes. Three areas were highlighted:
An absence of ownership
Lack of clear decision rights
Inefficient data flows
Remedying these issues, participants found, is a must in order to streamline decision-making and respond immediately to the challenges today’s market presents. From a data flow perspective, decision-makers need timely, accurate, and accessible data to support planning and analysis.
That’s why companies see such improvement in speed and adaptability when contracts are digitized and accessible to all—sales, procurement, legal, each fulfilling their own data needs through a CLM platform. By embracing digitization and eliminating data fragmentation, enterprises are able to create the organizational and data discipline needed to optimize market performance.
At Icertis, we call this contract intelligence–the ability to dynamically analyze contracts in the context of systems and processes, expand understanding of how they drive all aspects of business, and ensure that the intent of every contract is fully realized.
Ask yourself: Is anyone in your organization thinking about the big picture? Or are your departments remaining siloed—hampered and slowed due to the absence of a single, central, easily accessible contract information source? The urgency of digitizing contracting has gathered pace, and the issue of data accessibility lies at its center.
Phil Barry is Icertis’ Consumer Goods industry vertical lead. Phil has spent the last 25 years in the Consumer Goods industry and has worked in roles ranging from Category Management, Product Management, Business Development, Global Sourcing and Retail consulting.
Icertis Remains a Leader in the Q1 2021 Forrester Wave
Icertis has again been recognized as a Leader in the Forrester Wave: Contract Lifecycle Management For All Contracts Q1 2021 report. This is the second consecutive Wave report to recognize Icertis as a Leader. Read the report and learn more about the impact of CLM and why Icertis has been named a Leader.