Supply chain management and contract lifecycle management are key ingredients to business success. The journey from idea to end product to shipment and delivery is exciting, yes, but rather complicated — fueled with many moving parts.
How well a company manages its supply chain processes can directly impact its bottom line. In a 2021 Statista survey, over half of businesses surveyed found the supply chain disruptions to be extremely challenging, with faster response time as the most difficult hurdle to conquer.
Transparency in the supply chain is, therefore, vital for ensuring quality control and enabling resilience in case of business disruptions. However, data from McKinsey shows many US companies continue to fall behind on this, calling lack of transparency “an ongoing crisis.”
Be it sourcing, creating, planning, or delivering, there is a clear need to adopt more digital tools and cloud-based collaboration platforms so that stakeholders are always on the same page. In particular, contract data is vital for businesses to renegotiate deals and stay abreast of potential liabilities as the supply chain evolves.
Investing in improved contract lifecycle management (CLM) is thus essential. So how does CLM affect sales and how can one effectively drive the function in this digital day and age? Let us find out.
What is Contract Lifecycle Management (CLM)?
CLM involves the end-to-end tracking of product, payment, rebate, and delivery information in the supply chain. Without CLM, undertaking sales operations in a typical supply chain process will become tough.
CLM enables businesses to move away from traditional systems like spreadsheets and hard drives and gives them complete visibility on contracts and agreements at any time.
Using digital proposal software, businesses can create a collaborative sales experience and generate customized proposals in an easy-to-send digital room that delivers personalized content and all the information customers need in their buying journey.
CLM also serves to reduce timelines, avoid the risk of delays or damage and protect brand reputation — all of which are necessary to keep the business going.
Best practices to enhance sales CLM in the supply chain
Every business has a wealth of data that can help to optimize supply chain processes. From SOWs to budget plans to vendor agreements, even the existing database can cut costs and reveal growth opportunities — as long as it is suitably processed and managed.
Any supply chain management process generates a ton of data — no one wants to struggle when it comes to putting that data to good use.
With the help of CLM, manufacturers can move towards digital contract transformation, which allows for maximum control over the complex network of contractors, sub-contractors, vendors, and distributors.
A tool is only as good as the people operating it, though, so here we give you some best practices to keep in mind when you graduate to contract lifecycle management:
1. Eliminate paper-based processes from your workflow
You might imagine that a supply chain automatically involves digital processes, but that is not always true. So you can imagine the kinds of delays that occur when different stakeholders in the supply chain are waiting on each other to sign documents or approve contract clauses.
With digital processes, however, everyone gets an electronic copy and can collaborate on it simultaneously, regardless of where they are located. It also means that everyone has the same information, which reduces the likelihood of a misunderstanding or conflict.
2. Store the contact information in a secure online location
Once you move away from paper records, you no longer have to hunt frantically through file cabinets for that one phone number you need urgently. By storing all your contact data on a centralized platform, everyone on the supply chain team can look up whatever they need to at any time. Not only does this save time, but it also eliminates the risk of your vendor information reaching the wrong parties.
3. Gain access to contract details instantly using digitization
Given how long and complex most contracts are, a CLM equipped with AI features can help you zoom in on specific dates, delivery times, and other details that could take days to search for manually. Particularly if you are having a dispute with your contractor, having this information readily available will help resolve things faster and keep your digital supply chain operations going.
4. Set key performance indicators (KPIs) for the sales team
With the degree of specificity a sales CLM process affords, you can set up tailored KPIs to manage the unique aspects of your business. For instance, if certain suppliers tend to be late, you can set up tailored reminders to let them know they need to fulfill their deliveries timely. And if certain aspects of your digital product require special quality checks, you can budget extra time for them.
5. Stay on top of relevant dates
Time is everything when it comes to successful supply chain management — even if it is digitized. By using a CLM process to track necessary dates, you have enough lead time to identify delays, renegotiate contracts as necessary or terminate certain vendor deals within the opt-out window. This is important to avoid unnecessary spending and find good replacements before the next production cycle begins.
6. Track your data and identify areas of improvement
A sales CLM software allows you to pull up contract data and sort it by any parameter of your choosing. This gives you quick visibility into upcoming renewal deadlines, specific clauses, payments due, payments receivable, and the geographic location of your suppliers.
This visibility also helps you quickly identify areas where you can improve your supply chain, such as by cutting ties with contractors who are consistently late or opting for one in a geographic location where the prices are much cheaper. Decisions like this help you achieve better results while saving more money.
The bottom line
As the digital economy continues to evolve, it is vital to reduce the time between innovation and execution as much as possible. Building up sales CLM best practices is as big a part of this as is the creation (and promotion) of the product itself.
By staying up-to-date on contracts through proper data and process management, business continuity is always assured and the company can focus on providing the best possible experience to its customers.
Author Bio
Hazel Raoult is a freelance marketing writer and works with PRmention. She has 6+ years of experience in writing about business, entrepreneurship, marketing and all things SaaS. Hazel loves to split her time between writing, editing, and hanging out with her family.