An efficient procurement business process can effectively cut purchasing costs and lead to better purchasing terms and contracts from vendors. A recent study by Ernst and Young concluded that efficient contracts, over time, could reduce waste within a supply chain, generating savings of up to 15% of total contract spend with better contract management.
Most of the key business data within procurement lies in negotiated price contracts and service agreement with vendors.
However, adherence to these negotiated terms tends to slip and the company loses out on a number of savings opportunities. Therefore, easy access to past contracts is imperative for efficient future negotiations.
The fundamental challenge with managing data within contracts is that the data is usually in an unstructured form, and needs to be organized in a defined way, such as converting it into a database or using a reporting/BI tool. Traditional contract management systems such as CLM can help manage the entire contract lifecycle, but these systems struggle with identifying the specific data points within the contracts. Data points including delivery terms, payment terms, price, contract terms and service levels are crucial to business and procurement decision making.
How Counselytics Can Help
The future of an efficient supply chain is taking unstructured text and turning it into structured data, and then managing all of this data in one location to increase productivity. A solution such as Counselytics can assist in this process by extracting the most relevant data to consider while making the decisions of forecasting future costs, cutting unnecessary costs, and any unexpected costs in the supply chain:
– Counselytics takes this structured information and creates specific outcomes that highlight new understandings within the data.
– Procurement is enhanced when data is transformed into meaningful insights.
– People are better than machines at interpreting this data, but machines make it easy to understand this data, which allows for faster decision-making.
– Since procurement is a vital part of a business, fast decision-making is necessary to cut costs.
Companies are moving towards contract management analytics in order to easily understand and interpret historical data points. They can use these analyses to immediately access any contract information, providing for comparisons, potential risks, and future performance estimates within the supply chain.
Adopting our technological solution early is important for two reasons. First, the volume of historical contracts and unstructured content is increasing rapidly – by some estimates doubling every 90 days. Failure to tackle this problem sooner rather than later will only increase complexity, time delays and costs when the inevitable arrives. Second, our technology is built on a machine-learning platform that improves with use. By deploying our solution now, companies will experience an early-movers advantage in terms of refining analytical algorithms and extraction policies.
Counselytics overcomes challenges in the supply chain by providing for easy management of information held within contracts. Having a document’s information immediately accessible saves time and highlights new insights or opportunities. Contract management with Counselytics provides a faster, cheaper, and easier way to make important procurement decisions.
To learn more, contact your Counselytics team today at [email protected] or via telephone at 1-800-266-1472.