If you are not already using vendor management software for your third-party risk program, you are missing out on efficiency and high-quality results to show off to your senior management team, the board and examiners.
The contract management function is not simply about trying to negotiate the best financial and legal terms, but also a key component of managing risk and vendor relationships within your organization. The activities in contract management may involve multiple areas in order to develop a comprehensive, well-rounded agreement.
In a nutshell: this takes work. There are a lot of moving parts and it can get overwhelming fast.
5 Benefits of Having Vendor Contract Management Software
Let’s take a look at what a contract management component within your vendor management software offers. Here are five huge benefits:
Just think of all the tasks required in the contract management oversight process: RFP, ongoing monitoring, tracking significant dates, etc. Less manual upkeep in even just one of these areas can drastically increase time which can be devoted to other areas of the organization. Expect to see automation by increased efficiency in tracking the following:
- Effective and expiration date contracts
- Renewal date and auto-renewal clauses
- Supporting non-disclosure agreements
- Supporting service level agreements (SLAs)
- Dates of documents that are incorporated into the contract by reference, or that are signed after the agreement (e.g. exhibits, statements of work, work orders, purchase agreements, amendments, etc.)
- Timeframes associated with breach or remedies and notification periods are established
A strong vendor contract management component within your software can help streamline the vendor management program across multiple lines of business. The overall organization will have a better hold on documentation, and ultimately, which vendors may impact their business channel. One of the most difficult aspects of contract management is organization and keeping track of all those dates.
- Feedback loop.
Software offers technology which provides clear insight into who has completed what with a date stamp, as well as what’s upcoming, all in easy-to-view dashboards.
- More robust system.
Contract management provides you a place for document storage, which lessens the chance of losing critical data should your facility experience a business disruption. Additionally, rather than relying on ad-hoc reports, creating a highly customized standard set of reports that clearly identify areas of concern will help you meet your board’s and examiner's needs for accurate and comprehensive information.
A software system removes codependency on any one individual. Once the process is built in the software, it becomes a recorded and repeatable process, so workflows are easily adapted with cross-channel visibility and without a lot of manual input. And, guess what? Less missed deadlines mean more money in your pocket!
The use of a vendor contract management component within your vendor management software can greatly level up your organization’s third-party risk maturity. Up until now, software has been the missing link in effectively managing a vendor panel which requires an increasing level of oversight. Add a good software to your arsenal and you can effectively mark one more thing (or twenty) off your to-do list.
Investing in the vendor management will have a significant ROI. Find out more with this eBook.