A contract lifecycle management (CLM) platform must do far more than streamline contract authoring and ensuring compliance. With contract analytics, a CLM platform can leverage data from enterprise systems to give you a holistic view of contract performance.
Contract analytics has helped professionals in many industries to assess the value of existing contracts and negotiate better ones. In a Forrester survey of companies using contract management software, nearly three-quarters used analytics to gain insights into their contract portfolio.
An enterprise contract management platform can provide these insights.
- Incentives (Discounts, Rebates and Performance based rewards). Manual contract tracking causes missed revenue opportunities. Contract analytics can identify the performance-based incentives that are embedded in contracts and cross-reference them with financial data to ensure you receive the discounts and rebates to which you are entitled. Analytics can also help track and collect performance-based incentives.
- Inconsistent pricing. With manual contract management, a global enterprise will inevitably have inconsistent contract terms. This can include issues like different pricing for the same products and services, sometimes even from the same vendor. Contract analytics report on these interrelated contracts to alleviate this problem.
- Optimizing existing contracts. When contracts are up for renewal or similar agreements are considered, it’s critical to understand the performance to date, ensuring that future contracting decisions align with business objectives. Contract analytics can put this information at your fingertips, reducing the time and personnel needed to gather information and make intelligent contract decisions.
- Supplier risk and performance data. A CLM platform can help organizations to capitalize on opportunities and accelerate the contracting process by automating supplier validation using connections with data providers like Dun & Bradstreet and Thompson-Reuters.
- Insights into off-contract buying. Standard contract management systems can tell you what’s supposed to happen, but they don’t know what really takes place. By combining contractual information with financial data, you can learn if contract terms are being followed and whether off-contract buying is occurring. Off-contract buying can inflate costs, create inconsistencies, violate contract terms regarding exclusivity, and result in forfeited rebates or bonuses. Beyond financial impact, it can result in contract violations. Gain valuable insights with analytics so you can respond quickly and maximize contract value.
- Expiration dates. Analytics can be configured to alert you when a contract is nearing expiration. This gives you time to analyze data and decide what to do, increasing the chance that future contracts will be compliant, and in the enterprise’s best interest. Expiration notices also ensure that contracts don’t expire or renew unintentionally.
- Supply chain overview. Analytics enables you to easily track contract terms and other conditions throughout the entire contract lifecycle. With a global view over the supply chain, it’s easier to spot inefficiencies and improve contracting processes.