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 won’t fully maximize the benefit of this information without a user-friendly and reliable reporting function that produces meaningful, 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, execute, and monitor contracts. Merely gathering information about the contracting process and contract performance isn’t enough.
Beyond Aggregated Data
As an illuminating report on CIO.com about the difference between business intelligence and business analytics concludes, without proper reporting tools, any insights that the user gains while interpreting Excel spreadsheets tends to stay with him. So all opportunity for organizational learning or process improvement is lost. This insight certainly applies to contract management reports as much as it does to any business function.
In companies without sufficient reporting and analytical tools within their contract management system, users are forced 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 have to 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 making use of Software-as-a-Service (SaaS) via the Internet cloud. But whether outsourcing contract management in this manner or choosing to install an in-house software system, companies must be sure to customize the reporting functions to match their business needs and drivers.
The reporting required of a healthcare contract management system will be much different than those for a restaurant chain, whose requirements will vary substantially from a university, 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 a contract management software look for features beyond just data aggregation. Look for a vendor that is able to 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.