Effective Contract Management Reporting
One of the essential elements of any productive contract management software system is its reporting capability. Even if critical contract data is collected and stored in spreadsheets or databases, a company can’t fully maximize the benefit of this information without a user-friendly and reliable reporting function that produces meaningful and concise reports that highlight the most important data.
Effective contract management reporting allows companies to identify and analyze opportunities, as well as problems, in the way they create, negotiate, approve, execute, and manage contracts. Merely gathering information about the contracting process and contract performance isn’t enough.
Editor’s Note: To learn more, download our whitepaper on the top 10 contract management best practices.
Beyond Aggregated Data
A report from CIO.com about the difference between business intelligence and business analytics concludes that without proper reporting tools, any insights that users gain while interpreting Excel spreadsheets tends to stay with them. This means that all opportunity for organizational learning or process improvement from their insights is lost. This finding certainly applies to contract management reports as much as it does to any business function.
Many organizations lack adequate reporting and analytical tools within their contract management systems. This forces users to inefficiently mine through the Excel spreadsheets, Access databases, or other tools designed to compile information, but not to report on it in way that facilitates strategic decision making.
As the CIO.com report states, “Business users cannot rely solely on aggregated data in the operating environment. They must be able to get to the details. The aggregated data will many times obscure the key issue or opportunity in your information.”
Areas of Reporting
At a basic level, contract management data reporting should provide alerts about contract status, due dates, and other contract milestones. This reporting allows businesses to better manage the process to reduce labor costs, prevent mistakes, avoid lost business due to contract delays, and improve customer and vendor relationships.
At the strategic level, the data gathered in a contract management system can be reported in a way that highlights vital issues such as lost revenue due to delayed payments by specific vendor and/or customer types, the correlation between contract creation-to-completion time and the contract’s ultimate profitability, and the specific financial and operational impact of contract noncompliance throughout the organization.
Finding the Right Match
Many companies today are implementing contract management software through a third-party service provider, usually implementing Software-as-a-Service (SaaS) via the cloud. When evaluating solutions, it’s important to ensure the software can customize the reporting functions to match your business needs and drivers.
For example, the reporting functions for a healthcare contract management system will be much different than those for a restaurant chain, whose requirements will vary substantially from an educational institution, and so on. There are basics for any contract management reporting, but there’s not a “one size fits all” solution. Therefore, it’s a wise move for organizations to work with an experienced contract management software provider when deploying the software to ensure that the analytical reports and dashboards provided are the ones truly needed to lead to operational improvements.
When evaluating contract management software, look for features beyond just data aggregation. Look for a vendor that will work directly with you to understand your requirements, define your objectives, and to create a personalized plan that meets and exceeds your expectations for data reporting.