22 Feb 2023
With notable technological improvements and changes in customer behavior, retail businesses must adapt to the difficulties of a rapidly changing industry landscape. Companies have had to change how they conduct daily operations and functions. Contract management is one area of the company process that has grown remarkably. Read on to discover more about contract management, its significance, its common issues, and solutions.
The Importance of Contract Management
Contract management is the process of managing contract generation, implementation, and analysis to maximise an organisation’s operational and financial performance. According to World Commerce and Contracting, poor contract management can cost firms up to 9% of their annual revenue. Also, Aberdeen Group stated that efficient contract administration may save administrative expenses by up to 25–30%.
Contracts have developed as the retail industry’s backbone. They outline the dynamic interactions among personnel, managers, suppliers, clients, and business partners. All these parties exist both inside and outside the corporation. They also cover the complete spectrum of a company’s risks, duties, entitlements, and authorisations.
Contract management solutions have become vital since contracts have an impact on every element of the company. These solutions integrated into Enterprise Resource Planning (ERP) software promote speedier responsibility fulfillment, improved decision-making, and a quicker reaction to change. As a result, businesses need to adopt an effective contract management system that will enable them to navigate operational uncertainties.
Major Retail Contract Management Issues and Solutions
1. Lack of Contract Visibility
Contract visibility is a major contract management concern for retailers. Suppliers, customer service staff, delivery personnel, and managers in the central office are dispersed geographically. A complicated and widely spread web of contracts is created due to this divided network of people. Contracts may be kept in file cabinets, locally shared folders, or email inboxes. When concerns occur that necessitate contract review, finding them might be challenging or impossible.
Solutions: Executives need the contract management system. This aims to provide a bird’s-eye view of all contract responsibilities, regardless of their locations, for effective contract tracing and follow-ups. Via a web-based ERP system, you will have a central source of information to effectively track the status of each and every contract.
2. Insufficient Capacity to Provide Real-time Data
When commodities move through the supply chain, all parties are all attempting to acquire as much real-time data as they can. However, this information is typically opaque when using a conventional paper-based contract management system. The failure to manage supply bottlenecks may causes delay to supplies, which results in inefficiencies.
Solutions: Synergix ERP system can help monitor the status of contracts more productively. Access to the system to check on contract status is given to all authorised staff. A single click will change the data from a contract quotation into an active contract for monitoring after an official confirmation from customers. Hence, retail sectors can handle every phase of a contract’s life cycle. The contract’s life cycle includes active, modified, terminated and expired status with the aid of appropriate tracking in Synergix ERP modules.
3. Limited Approval Workflow and Contract Standardisation
Any problems, such as legal department approval delays, might prolong contract turnaround times. The lack of a systematic means to track how long a contract spends at each step and detect delays, a firm may not be aware of why its contracts take so long to be authorised.
The formation of contract terms and templates in use poses a typical contract management difficulty for retail businesses with ad-hoc contract authoring procedures. When contracts deviate from the norm, it is up to the legal department to carefully review each one to ensure that the firm is not put in danger.
Solutions: There is a need to employ an online workflow for contract quotation approval. By the provision of a ready tool and the ease of a web-based system, Synergix ERP software boosts the productivity of your salespeople. Before the client receives a quotation, the company’s approval policy is satisfied thanks to online routing approval of contract quotations.
Conclusion
A successful contract management system guarantees cost savings through quicker formulation, easier implementation, and easy monitoring. Businesses may uncover the actual value of contracts as they liberate executives from the repetitive but time-consuming nature of processing paper-based contracts. Given this extensive list of benefits, it is crucial that retail players implement a contract management module as soon as possible.
The Contract Management feature in Synergix ERP software efficiently controls your contract department’s whole process. From contract quotes, and contract auto-generation to contract dispatch and invoicing, it assists retail and consumer goods enterprises in transforming contracts into organised, interconnected, and on-demand data. The Synergix Contract Management Suite can completely connect with other types of operations, such as finance, procurement, inventory control, operational/fixed assets, and human resource management.
