What is Enterprise Contract Management?
As organizations search in vain for the next game-changing strategy to boost their finances, a potentially lucrative source of profit and revenue is already staring many companies in the face. The fact is that failure to manage commercial contracts professionally is costing organizations billions of dollars worldwide every year. Conversely, adopting an Enterprise Contract Management (ECM) strategy can generate substantial revenues and cost savings, and minimize business risk.
What is ECM? Quite simply it is the practice of addressing and implementing improvements for the entire contracting process – from initiation to compliance, assessment and refinement – across the organization. Its aim is to ensure that contractual commitments are met and that pricing and terms are optimized for better business performance and stronger customer-supplier relationships.
The blog entries for Contracts Management address how trust is further deepened by mitigating risk through improved visibility of contracts and control of the contracting worklfow. At the same time, since the deal structure for most business transactions is finalized during the contracting process, transaction data collected in an ECM application becomes a critical source of truth. Over time, big data collected in ECM applications enable companies to maximize profits by measuring and assessing its customer and vendor relationships and contract performance for future business transactions.
Recently, I published a paper which further discusses how to maximize return on contracts by leveraging analytics.