Introducing Contract Metrics Manager: Real-time Analytics to Mitigate Risk
Contracts contain a tremendous wealth of data such as organizations, names, addresses, dates, values, terms, obligations, timelines, conversion rates, products, and services. All this data can be used to streamline processes, uncover business risk, optimize vendor management, execute business faster, and drive internal and regulatory compliance. Those are just a few reasons why every contract lifecycle management (CLM) strategy needs to be very data-centric or even data-first in today’s business world.
The million-dollar question, however, is are you able to leverage and harness that data in a meaningful, accurate, and effective way to deliver your business the insights it needs? Are you able to use it to benchmark and track key performance indicators (KPIs), identify opportunities for supply chain diversification, or fix legal bottlenecks? If you can’t capture and visualize the data in real-time, it’s impossible to do.
Watch Now – 10 KPIs for Successful Contract Management
That’s why Contract Logix has developed our contract management software to be a data-driven platform. We support a robust set of advanced analytics including cognitive search, reports, and graphical dashboards that give you instant access to all the data in your contracts and processes. And, we’ve just significantly enhanced all of those capabilities with our new Contract Metrics Manager functionality.
INTRODUCING CONTRACT METRICS MANAGER
So, what is Metrics Manager and why is it important? With Metrics Manager, you can easily configure highly valuable metrics about your contracts and contract management process. Metrics Manager enables a rich set of configurable processing metrics that can be used to benchmark and track contract management KPIs. Organizations can leverage these KPIs to significantly mitigate business risk associated with their contracts.
The Metrics Manager dashboards and reports deliver actionable insights about where legal bottlenecks and risks lie so that Contract Logix users can take appropriate action to improve performance, in a way that is tailored to the unique needs of their business. By tracking KPIs in this way, your organization will have instant access to critical contract intelligence that will help digitally transform the way they manage legal agreements.
These metrics provide valuable insights about important items such as the total and average contract values, volumes, timeframes, conversion rates, and more!
More specifically, Metrics Manager can help you automatically and easily capture advanced analytics such as:
- Average number of days in a contract lifecycle
- Average time to achieve contract milestones like requesting, drafting, negotiating, approving and signing contracts
- Ratio of complete, outstanding and missed contract obligations
- Total dollar value and volume of active contracts by type, organization, risk profile, and more
CONTRACTING KPIS USING CONTRACT METRICS MANAGER
To help you better understand the importance and value of using the real-time analytics of Metrics Manager to benchmark, track, visualize and report on these KPIs, let’s look more closely at a few examples.
1. Days in a Contract’s Lifecycle
We all know that contracts are complicated. In fact, most people would say they are more complex than ever. And usually when things get complicated, they tend to take longer.
That’s why this KPI is a good foundational one. It’s all about tracking the average total number of days in a contract lifecycle. Every contract will be a little different but by benchmarking this you can begin to identify opportunities to improve it. Maybe NDAs are taking too long to execute early in a relationship and that’s slowing down the rest of the process?
2. Contract Lifecycle Milestones
This KPI is focused on the pre-execution phase of a contract and understanding the average time to reach and execute each contract milestone. In this case, by milestone we’re referring to activities like requesting an agreement or drafting one or negotiating it. How long does it take, are those timeframes acceptable, and what can be done to improve them. This is an excellent KPI to use to uncover bottlenecks in your process.
Want to learn more about KPIs? Download our whitepaper on the Top 10 Contract Management KPIs.
3. Contract Value
Here’s a very important KPI to monitor the health of not just your CLM process, but your overall business. It’s tracking the total dollar value of all active contracts being managed. This one is very interesting to monitor at a lot of different levels through many filters like renewal date or risk level or contract type or vendor even. By tracking this KPI you may find you need greater supplier diversification, or that your buy-side vs. sell-side contracts need rebalancing.
4. Contract Volume
Contract volume is related to the contract value KPI but it’s different because now we’re looking at the total number of contracts in the process. This is a good way to help monitor workloads and high-level sales and purchasing activity. For this KPI, you will want to be able to track it by all your different contract stages as well as your different contract statuses to get the most visibility into your process. Over time, and as volume increases or decreases, you can use this KPI to justify headcount, additional technology, or areas where you need process improvement.
5. Renewals
This is a big KPI that comes up in a lot of conversations because it has such a visible and monetary impact on the business. For renewals, it is important to track the percentage of failed customer contract renewals and you’ll want to track them both by autorenewals and standard term ones as well as by other key data points in your business, like products or customer types or services. One of the big advantages of this KPI is it allows you to identify ways to prepare for and get out in front of all your renewals, but especially ones you’ve scored as high risk. It also helps you eliminate the risk of having a contract auto-renew that you intended to cancel but missed the renewal window.
TAKEAWAY
Your ability to harness that data in your contracts can be a huge advantage and opportunity. However, your inability to do so creates a great deal of unnecessary risk. Contract Logix provides a data-driven contract management software solution that enables our customers to capture, analyze, and report on their wealth of contract data. Our Contract Metrics Manager makes all of that a simple, fast, and real-time solution that includes the ability to benchmark and track critical contract management KPIs.
Interested in learning more? Schedule a demo of our award-winning platform today.
Looking for more articles about Contract Management? Check out our previous article “Getting Started with Paperless Contracting in 2022“.