How to Gain Agility in Your Purchasing and Contracting Processes
In today’s business world, time isn’t just money. Time is everything. To achieve a competitive advantage, procurement teams must complete their business objectives with more agility than ever.
But what does more agility in purchasing and contracting practices actually mean? How can a business adapt its existing operations to keep pace with industry leaders and mitigate high-level risk without sacrificing quality, compliance or reliability?
As today’s business world changes rapidly, CFOs and procurement leaders must consider market volatility when it comes to their relationship with suppliers.
So, to remain competitive as the marketplace continues to evolve, procurement teams must focus on more than cost savings as their core function. Of course, cost reduction remains an important business objective. But in today’s fast-paced, technology-driven economy, purchasing leaders and procurement specialists must now develop the skills and tools needed to produce agile sourcing practices in more dynamic ways.
Below are some of the key considerations for building more agile purchasing and contracting processes to help you achieve your top business objectives.
Why Agility Matters
CFOs and CPOs may understand the crucial role procurement plays in the overall financial health of their businesses, but they should also consider how purchasing and contracting agility can increase revenue and improve the ability to respond more rapidly to market changes.
Moving beyond forecasting, agile procurement means using processes that reduce the time it takes to reap the benefits of your business objectives. Agility also means being able to respond immediately to important changes with supplier relationships to keep a competitive advantage over rival companies.
For procurement professionals, agility provides meaningful benefits in the following ways:
- Seeking out and identifying potential risks, with the ability to react. When suppliers become too risky, agility allows a business to leverage alternative suppliers to mitigate the risk.
- Using time to your advantage by acting faster than competitors and maximizing potential revenue through supplier relationships.
- Thinking of business value first and foremost. There’s more than one way to deliver value. Think of purchasing in terms of the ultimate potential value, without getting bogged down in the technical details.
- Building supplier relationships with trust. High levels of trust and communication with suppliers will give procurement departments a better chance at maintaining agility. Strong-arming suppliers for discounts and making them jump through unnecessary hoops can only harm agility.
- Considering value in terms of time. What is the cost of delaying a new product? Extra rounds of contract negotiation with suppliers can lead to delayed revenue and potentially falling behind the competition. The increased risk of waiting should be carefully weighed against any delayed revenue.
How Contract Lifecycle Management (CLM) Software Boosts Business Agility
To compete in today’s volatile marketplace, procurement departments must not only be cost effective, but do so with built-in resilience and agility. Yet many businesses focus only on cost and risk, falling behind without the right tools at their disposal.
Contract Lifecycle Management (CLM) software allows businesses to streamline procurement supplier contract workflows and use multiple purchasing modes depending on the nature of the business requirement. This bolsters agility to better meet customer expectations. CLM allows the procurement function to act as sourcing advisors—helping you avoid roadblocks to progress against mission-critical business objectives.
Here are three key areas where CLM can boost agility.
1. Supplier Information Management
A supplier information management system is critical for a business to achieve a high level of agility. Leading CLM platforms include supplier information management to streamline workflows, speed up the onboarding process, and give suppliers and buyers access to their progress and status in the contract management process.
This allows you to simplify the onboarding process for contracts where agility outweighs traditional contracting needs, without sacrificing adherence to corporate policies and standards. You can easily supplement and update a supplier record as the relationship grows over time.
CLM greatly aids with agility during the sourcing process as long as the CLM platform is robust enough to handle strategically planned projects where suppliers must be vetted for certification, proper procedure and other qualifications. In some industries, sourcing can take months to complete, with multiple rounds of activities like RFIs, RFPs or RFQs. A CLM that offers agility in this process can be a crucial tool to make things simpler and faster while being able to respond to risk and deliver a competitive advantage.
CLM software can also allow stakeholders to initiate and run RFIs and RFPs for specific projects. This reduces the possibility of procurement becoming a roadblock and further streamlines agile sourcing. Agile CLM can help procurement maintain oversight with configurable sourcing templates, processes, and permissions to ensure only the right people access these capabilities with a high level of transparency and accountability.
3. Contract Management
Agility in contract management is where the right CLM software tool can make all the difference. Some cutting-edge technology and innovations are often only available through small companies or startups, and CLM software’s different modes can help achieve agility for these and other contract types.
CLM offers contract templates that fit the needs of any contract type. Templates can be used for traditional contracts where negotiation may take weeks or months or can offer more agile templates when agreements may be more standardized and offer the end-user the opportunity to select alternative clauses to reduce the negotiation timeline.
Legal departments can use CLM to create streamlined approval workflows and manage permissions and access to these processes and templates, reducing risk and improving contract turnaround times. Additionally, sales teams can accelerate deals with an agile CLM system that gives full control and visibility to the contract lifecycle, which boosts sales revenue and removes red tape.
Why a No-Code CLM Is the Most Agile CLM for Your Company
Though “agile” commonly refers to a particular software development methodology, an agile CLM removes the need to write software at all. In doing so, your CLM allows you to help your business perform better without becoming a coding or programming expert.
No-code CLM gives you the flexibility to deeply customize your platform across your entire system solely through the admin browser. From key APIs and integrations to machine learning, process and data modelling, reporting, interface and communications, regulatory compliance, and security, truly adaptable CLM is built to integrate with a wide array of other tools and systems to ensure quality and efficiency.
The only thing that never changes is that things are always changing. Your business will scale, your industry will shift and new technologies will emerge. To turn challenges into opportunities, you need to be able to enact universal changes across your system with swiftness and precision.
Agile CLM supports rapid prototyping and iterative design driven by user feedback, allowing you to refine requirements based on real experience, not just specifications. Your design iterations can be accomplished within a matter of days or even hours using agile CLM, which will allow you to reach a finished product faster.
Custom coding accounts for 80% of deployment time for traditional IT projects. Once the original developers are gone, custom code is even more expensive to maintain.
No-code platforms mean you aren’t locked into custom code. And some platforms offer free admin training that empowers your IT or contract management staff to update the system anytime without incurring consulting costs.
Agility Provides Meaningful Benefits
With clearer contract processes and clearly defined roles, you can increase your business velocity without compromising quality or risking noncompliance. Decentralized decision-making allows users outside of legal and procurement to participate in sourcing and automated contracting while keeping procurement specialists in an advisory role.
Agile CLM gives your company the flexible edge it needs to thrive in the future. When your business needs to adopt new technology or find alternative supply sources on the fly, CLM lets you accomplish your immediate and long-term goals.