Contract management offers an opportunity to uncover valuable insights to optimize your operation. You need to extract those insights without losing countless hours searching through your agreements to find the correct terms and clauses. To do this, you need effective vendor contract management.
Why Is Vendor Contract Management Critical to Your Business?
To answer this widespread need, Terzo developed the first vendor contract management platform of its kind, where our AI identifies and extracts the data you need, streamlining your access to the metrics that matter most.
You can think of our revolutionary vendor contract management system as CRM — but for buyers. Contracts bind you to your vendors with terms for costs, deadlines, and other obligations. But beyond the foundation of agreements, you need a way to track the quality of your vendor relationships to make the best decisions for your organization’s future.
We’ve put together these 10 tips on how to use Terzo’s vendor contract management tools to unlock essential insights that help you:
Build stronger connections
Improve communication with your vendors
Make company-wide optimizations that save you time
Grow your revenue
Look for Opportunities to Negotiate Terms
Your vendor contracts define roles, costs, and responsibilities. They also provide the information you need to evaluate performance and plan for optimized outcomes.
When you pull valuable data from the finer details of your agreements, you can examine how well your strategic partners perform and use that data to leverage better terms, reduce costs, and save money that you can invest in your organization’s growth.
Establish Vital KPIs
Take advantage of the wealth of data you can pull from your vendor contracts and build a set of goals around your most important KPIs. With effective vendor management software, you can identify your critical stakeholders and track performance data, like the following:
Specific performance metrics
Contract cycle timelines
Terzo makes it quick and easy to extract and analyze the precise data you need, so you don’t have to dig for data to monitor the KPIs that significantly impact your organization.
For a more detailed discussion on this topic, download our free eBook, 5 KPIs that Enhance Contract Performance.
Identify and Mitigate Risks
You may have a handful of contracts, or you may have hundreds. With each of those agreements, there can be vital guidelines and frameworks for regulatory compliance, rules about partner data privacy, and terms like quality standards.
More than ever, risk management should be at the forefront of everyone’s business strategy. Failure to prioritize this can result in losing up to 9% of annual revenue. And given the sheer volume of third-party contracts in play at any one time, this is an area that cannot be overlooked.
Effective vendor management software allows you to set alerts, track and search performance data, and use those metrics to enforce your expectations from individual vendors.
Maintain Awareness of Your Contract Renewals
Your contracts might renew automatically, or you may have opportunities to renegotiate terms when renewing with a vendor. Multiple contracts could run on different timelines, making them nearly impossible to track manually.
Luckily, it’s 2023, and we no longer have to resort to time-consuming, unreliable manual tracking for this sort of contract management.
Leverage modern CLM technology to stay abreast of your renewals and avoid time disruptions from lapsed arrangements. This awareness helps you plan expenses efficiently based on newly negotiated terms.
Manage Your Document Database
We’ve come a long way from decades of paper contracts taking up rooms full of filing cabinets. However, some of the world’s most recognized brands still operate using the digital equivalent of an analog filing process.
With a smattering of software, each with a narrow scope of use, many large corporations store PDF documents on multiple servers, provide administrative access via email communications, or upload hundreds of contracts to a company repository where those with the proper privileges can find them.
In contrast, Terzo’s vendor contract management platform gives you complete visibility of all your contracts in a single, central location. You can organize your documents by vendor, key data points, organized search functions — virtually any way to provide instant access to your agreements. Gone are the days of editing spreadsheets offline and emailing updates back and forth. With a single source of truth CLM platform, you’ll not only ensure your contract data is accurate, you’ll also save a lot of time sitting around and waiting for the latest version of a years-old spreadsheet that may or may not be correct.
Monitor Your Contract Performance
With a robust, central database for your contracts and all the terms your vendors have agreed to, you can use advanced analytics to stay on top of critical KPIs.
Monitor each vendor’s performance metrics. Beyond compliance, you want to be constantly aware of their delivery times, product quality, and other terms. These details matter when it’s time for renewals or negotiations, but they also impact your day-to-day operations. Keep a watchful eye on performance data like these:
Contract value growth
Contract risk mitigation
By tracking these KPIs and more, you can measure the effectiveness of your contract management processes and identify areas for improvement.
Centralize Your Data and Communication
Your contract management platform allows immediate visibility of all contracts and their underlying terms. It also lets you sync all individual vendor details so they remain looped into their roles and responsibilities.
B2B International lays out a 4-step process for stakeholder communication: planning, process, presentation, and promise. Each of these steps is critical to maximizing success with third-party partnerships, and an effective CLM solution provides accountability and clarity for all parties throughout the business relationship.
Communicate to maintain terms, efficiency, time-critical events, and data, and remain in sync throughout your contract lifecycle. Sharing the correct data with stakeholders helps you expedite vital contract stages like negotiations, approvals, and e-signatures with optimal time efficiency.
Automate Your Workflow
With effective vendor management software, you can access data and easy formatting options to actively monitor necessary details. Terzo’s automation features empower you to manage approvals, renewals, and reminders.
Everything from approval notifications to gathering e-signatures can be automatically initiated and reported inside the same platform. Receive immediate feedback from your information portal.
Updates, renewals, tracking data, or other related messaging can automatically reach every stakeholder involved in a contract. This not only ensures accuracy and timeliness (all humans end up dropping the ball every now and then) — it gives back invaluable time that can be reallocated to work that drives the bottom line.
Collaborate with Your Vendors
Use the immediacy of data access from your vendor contract management system to build more collaborative, strategic relationships with your vendors. You can establish trust throughout the contract lifecycle with key benefits like the following:
Improved cost management
Improve Collaboration with Your Teams
Enterprise-level organizations often suffer from siloed teams that are hyper-focused on specialized tasks. Companies with highly complex structures seek ways to improve interoffice data. But this isn’t easy without the right technology.
Just as important as collaborating with your vendors, Terzo’s vendor relationship management (VRM) platform helps you track your data touch points across your cross-functional teams, so your internal departmental silos don’t short-circuit communication with vendors.
The VRM platform allows each department to tune in to contract details. All your teams will play their role in strengthening vendor relationships based on accurate, unified knowledge.
Unleash These Tips with Terzo’s Vendor Contract Management Solutions
Your company’s success hangs in the balance of your contracts. The key is having a solid contract management strategy. And the power of comprehensive vendor contract management software is maximum visibility shared across your teams and vendors.
Good news: with our solution, the terms of your contracts are a click away. Stay several steps ahead to make the best-informed decisions when it’s time to renew your contract.
Want to learn more about Terzo’s contract management solutions? Contact us for a free trial and a product walkthrough with one of our experts today!