Contract management is an essential part of the public sector tendering process. Choosing the best contract management software enables contracting authorities to monitor contracts with all their suppliers, ensuring that terms and conditions are being adhered to and that all parties are carrying out their responsibilities.
In fact, effective contract management serves several purposes in public procurement. We’re going to look at some of the key objectives below and see how Delta eSourcing’s Contract Manager meets all the requirements of efficient contract management systems.
Introduction to Contract Management Software
Contract management software is designed to streamline and automate the contract management process for public sector buyers. They can create, negotiate, sign, renew, and report on procurement contracts by automating the traditionally manual processes. A central contract repository helps buyers manage contracts, making it easier to track progress, monitor regulatory compliance, and keep an eye on supplier performance.
Why Is Contract Management in Public Procurement Important?
Contract management platforms are essential to automate and streamline the contract lifecycle. They play a role in risk management, helping to identify and prevent challenges on the horizon.
The contract management process is important for the following reasons:
1) Enhances compliance and risk management
Contract management software (CMS) has features that monitor contracts closely and pick up potential risks, including those related to non-compliance or non-performance like legal liabilities and emerging financial risks, as well as violations of industry-specific and national procurement regulations and legislation.
Buyers can take steps to address the risks immediately, so molehills don’t turn into mountains.
2) Improves efficiency
The software cuts chunks of time off administrative tasks, which not only leads to enhanced workflows but also provides employees with more time to focus on the strategic aspects of contract management.
3) Increases revenue
This happens on two levels. First, the keen eye of management systems can spot growth opportunities and generate reports based on advanced data analytics that support more favourable negotiations.
Second, staff who focus on contract management strategies can be more productive and leverage opportunities to gain more control over procurement processes, which can increase profit margins.
4) Enhances collaboration and communication
Management systems provide a central location for all contract-related activities, including data sharing. This is good news for buyers and suppliers because the system acts like a portal that prioritises transparency and facilitates open and honest communication.
This ensures that all stakeholders have access to the same information, and can lead to opportunities for collaboration and the development of innovative solutions to procurement challenges.
5) Monitors supplier performance
Keeping digital tabs on suppliers helps buyers keep them honest. They can track contract performance to ensure suppliers deliver what was promised in terms of capacity and quality and that everything is on schedule.
If necessary, buyers might provide assistance or support, like extending deadlines or even tendering for subcontractors to take on more specialised tasks and reduce the overall burden on single suppliers.
Key Features of an Efficient Contract Management Platform
An efficient contract management platform is essential for businesses looking to streamline their contract processes, ensure compliance, and minimise risks. Key features of an effective contract management platform include:
- Document creation and editing tools: Simplify contract creation and modification.
- E-signatures: Facilitate quick and secure contract execution.
- Version control: Track changes and maintain a history of contract revisions.
- Contract templates: Standardise contract creation to reduce errors and save time.
- Automated reminders and notifications: Never miss important deadlines and milestones.
- Audit trails: Provide a clear record of all contract-related activities for compliance purposes.
- Integration with other business tools: Connect with existing systems for consistent, uninterrupted business operations.
- User-friendly interfaces: Enhance usability and adoption rates.
These features enable businesses to automate routine administrative tasks and streamline contract workflows, making it easier for legal and business teams to manage contracts effectively.
Delta eSourcing’s Contract Management Services
Delta eSourcing provides a range of services for buyers, one of the most important of which is contract management. Delta Contract Manager features support services for everything that happens after contracts have been awarded, including supplier performance tracking, (automated) contract creation, and automated retender notifications. This is particularly helpful for government bodies that have several contracts on the go simultaneously.
Delta’s Contract Register provides a central location (or secure contract repository) for you to manage all your contracts. You can store your records in one place, making it easier to monitor each individually and to search for contract data specific to each agreement. Essentially, you’ve got a comprehensive view of the contract lifecycle and can easily track the progress of all active contracts.
The ability to track contracts and monitor supplier performance is important when it comes to regulatory compliance. For instance, Delta’s Contract Change Control service ensures buyers comply with Public Contracts Regulations (PCR) 2015 – Life-Cycle Costing. Each change or amendment is recorded and all supporting documents are accurately logged. This provides a clear audit trail, which is also required under the new Procurement Act 2023.
Performance Tracking in Contract Management Software
Performance tracking is one of the most important aspects of contract management. Buyers must know if suppliers are on schedule, whether the quality of their services/products is consistently high, and if they still comply with the terms and conditions of the contract and industry-specific regulations, not to mention national procurement laws.
Performance tracking in contract management software also mitigates risks and resolves disputes thanks to the clear audit trail, transparent document storage and assessment, and data accessibility. Contract management systems enable buyers and suppliers to collaborate on a dispute resolution process so that there’s no squabbling or blaming should something go pear-shaped.
Systems should also generate and analyse reports in real time. All stakeholders authorised to access data can use the information to make informed decisions immediately. Stakeholders can also add data or suggest amendments, which opens the floor to contract negotiations, discussion, and collaboration.
Delta’s Contract Performance module enables you to track progress, measure supplier performance against set KPIs, and set up regular contract reviews.
It standardised document creation and provides customisable templates, so buyers don’t have to create contracts from scratch each time. Instead of long, tiring, and costly manual contract creation, buyers can use digital contract management to optimise ready-to-go templates to streamline the procurement process, increase accuracy and efficiency, and collaborate on realistic KPIs.
Delta’s Contract Performance module links to Contract Records and Contract Register for a comprehensive, integrated approach to contract management.
Best Practices for Contract Management
Best practices for contract management include:
- Set up a secure contract repository: Store all agreements in one place to enhance accessibility and security.
- Automate contract workflows: Increase the efficiency of contract management processes to save time and reduce errors.
- Use contract templates: Standardise contracts to reduce administrative tasks and improve data accuracy.
- Conduct regular contract audits: Regular contract performance reviews help ensure compliance while minimising the consequences of non-compliance to terms and regulations.
- Provide training and support: Buyers must understand the contract management process to optimise software functionality.
The Benefits Of Contract Management Software
One of the biggest benefits of contract management solutions is lightening the administrative load. Delta provides a central location for traditional admin tasks; for example, contract storage features ensure tender documents are correctly ‘filed’. It’s easy to search for specific data on Delta’s contract management platform, and communication among all stakeholders is convenient and can be conducted in real-time.
Transparency throughout procurement processes, clear communication, and enhanced collaboration don’t just improve risk management. It helps them avoid risks completely. It’s possible to catch compliance issues early and take action to prevent delays and non-compliance penalties quickly.
Setting KPIs does two things. It provides critical contract milestones that keep suppliers on track and ensure buyers can monitor performance and progress. KPIs can also be created to align with buyers’ goals (positive environmental impact on local communities) and strategic objectives (reducing costs in client-facing service provision).
Collaboration on KPIs allows buyers to emphasise their priorities when it comes to social value, directing initiatives in the right direction, either economic, social, or environmental, or a combination of the three. Resulting data sharing and collaboration can lead to surprising innovations that ensure the long-term sustainability of social value projects.
Transparency in the tender process also enables competing suppliers to gauge their offerings and promote innovation as they try to distinguish themselves with higher total value (MAT – Most Advantageous Tender).
Delta eSourcing provides all of this in spades, so if you want to optimise your tendering process with comprehensive contract management, contact us to arrange a free demo and see what our contract management software can do for you.
