Contract management always starts with negotiations. Is it okay to talk tough? The UK’s Foreign Secretary Boris Johnson seems to think so. Recently, he told the EU it could ‘go whistle’ for the money it claims the UK owes before we complete Brexit.
Some people cheer that approach. Others might wince a bit. The EU’s response showed what can happen when you brush other people’s concerns aside. Its chief negotiator said he couldn’t hear any whistling. Only the sound of a ticking clock.
As CEO of Four Business Solutions, I’ve spent many years talking about and analysing the best way to do business. Brexit or otherwise, my view is that it pays to be approachable. As I’ve said, common sense will out, and values like honesty and empathy tend to foster success, especially when it comes to contract management.
Ultimately, good business is always about people. Even in the technical world of contracts, that’s true.
After all, it’s in your contracts that your relationships with suppliers, customers and clients are laid bare. The nature of your contract management can be very revealing. It’s where you demonstrate your working style, your care and attention to detail, what kind of partner you’ll be in the long-term.
When relationships go wrong, the results can be disastrous. Take the issue of monitoring key suppliers. Most of us remember the 2013 horsemeat scandal. Major frozen food manufacturers and retailers suffered huge reputational damage when it emerged that their ‘beef’ products were made with horse.
The source of the problem? A complex supply chain that no-one could keep a grip on.
A state-of-the-art digital contract management system can help any business stay better connected to its suppliers and manage a crisis when it occurs. For example, Cobblestone’s Contract Insight, which we endorse and install, will monitor key suppliers for risk, safety and how they manage their own suppliers.
Via a simple dashboard, contract managers can quickly view safety clauses, obligation reminders, calendar alerts and supply train tracking.
Contract Insight can also help you identify distress signals, such as missing contract obligations, which could be a sign of trouble ahead.
Customer of choice
When a powerful contract management system does spot issues, I always say, go and talk to your suppliers first. They’re human too, and may want to improve.
With all the details to hand, you may be able to work the situation through together with benefits for all. This comes back to the enormous benefits of being a ‘customer of choice’. It’s something we strive for at Four Business Solutions, because it’s rewarding and it brings outstanding results.
Mitigate risks and lower costs
Others agree. This Gallup survey studies the emotional dimension of supplier relationships. It finds that becoming a customer of choice can hugely benefit your business, mitigate risk, lower costs and spur innovation.
The survey reports that companies naturally offer their best services, advice and technology to favoured partners and respond more effectively when things go wrong.
5 keys to success
Gallup recommends five core dimensions for a quality supplier-customer relationship:
All the important detail of your business relationships can be embedded into your contracts from the start with Contract Insight.
- It is highly configurable and flexible, with data available on-screen anytime, anywhere.
- Bespoke clauses can be recalled and inserted into any contract with just a few clicks.
- Contract Insight simplifies the entire contract lifecycle, so that you can move forwards with confidence.
- With automated and in-depth reporting, managers can rest assured that when risk exists it can be brought to their attention, rather than slipping through the cracks.
- Most businesses regularly deploy invitations to tender (ITTs) to find the best supplier for a project. But this can be a complex processes, with short timeframes and large volumes of documents. Contract Insight integrates with Cobblestone’s Tender Management Software, to reduce complexity and wasted effort.
- It’s easy to use and helps you meet compliance requirements, control risk and drive down costs. It will track key vendor, customer and contract information via a secured portal, and allow you to keep a close watch on data and performance.
Integrity clearly takes many forms. But if you want to be known as a business with integrity, it’s vital that you can protect other people’s information.
- Contract Insight safeguards appropriate levels of access, confidentiality, integrity and availability of data. It provides security at individual document level, with access control allowed by person, group, location, business unit or companywide.
- Completed contracts are secured in a cloud-based electronic depository. The result is an extremely high level of security, suitable for most organisations.
This means acknowledging that you need your suppliers as much as they need you. And that you’re eager to listen when a supplier wants to share new best practices and developments.
- Our contract management software can help with this in many ways. For example, the system helps you sustain profitable agreements, by giving real-time visibility on existing committals and agreements. This provides a competitive advantage in negotiating new agreements and consolidating agreements with the best terms.
- Our solution provides fully-featured contract creation/authoring to accurately and consistently create contract language and merge details. By streamlining authoring and negotiation, you can devote more time to the unique and high-value aspects of contracts.
The Gallup survey showed that trustworthy cooperation is key for companies and their suppliers. When this breaks down, lack of communication is often to blame.
- Contract Insight keeps track of information and obligations and goes beyond providing trigger-based alerts.
- With its sophisticated workflow capabilities, your organisation can make sure employees follow through on important items and reach critical milestones, so that communication doesn’t break down
With this kind of power, access and flexibility at your fingertips, negotiating even the trickiest of supplier relationships (and, yes, I do mean Brexit) should be a success story for any business.
Find out more about Contract Insight
Contract Insight Enterprise can be either installed on your company’s servers or hosted as a Cloud-based SaaS solution. On-site help is available from our team, or you can allow Four Business Solutions to manage this contract management solution via our cloud deployment.
We always offer a pilot environment for clients before they commit. Once the decision is made, a typical deployment for an SME business is 10-15 days, including training and migration.
If you’d like a free trial to understand how Contract Insight can improve your contract management and your supplier relationships, please call us on 0800 6250 025.
John O’Brien is the CEO at Four Business Solutions, global business consultants and software integrators providing business processes improvements in Finance, Supply Chain & Operations, across a broad range of industries.