如何理解ERP合同管理
An ERP-managed contract is an agreement linked to an enterprise resource planning system—a comprehensive, integrated platform that manages the key business processes by collecting information from all departments and sharing it throughout the organization.
Companies looking to cut costs and reduce errors are turning to ERP contract management to streamline contract administration. Such systems offer a centralized place for providing secure access to contracts, making it easier to track contracts and their related data. Document stores allow easy searchability of contracts and documents, enabling quick response to contract searches and requests. In addition, such systems can keep track of contract alerts and notifications, which ensures compliance with important deadlines such as renewal dates and payment schedules .
ERP contract management also helps track and store contracts, enabling companies to have better visibility into their contract status and contract performance. Standardized contracts help speed up the contract creation process and make it easier for the legal department to ensure compliance with company policies. ERP-managed contracts are also less error prone and easier to audit and track back to their origin.
While it may be tempting to use a homegrown contract management system that meets your immediate needs, such a system can lack the depth of an ERP-managed contract. As your company grows and your contract volume rises, a contract management system may no longer keep pace with your needs. In addition, multiple systems multiply your maintenance challenges and can hinder relationships with customers and suppliers. Using one central ERP contract management system to track all of the contracts for your business will be much more efficient and effective in the long run.
ERP合同管理系统的五大特征
Choosing a contract management solution for an ERP or other enterprise system goes beyond the basic "functionality" offered by the solution. There are a number of essential "features" that every solution should have, such as automated renewals and risk management functions. Automated Renewals – The ability to manage contract renewals is essential, as many agreements and other legal instruments are negotiated over long periods of time. You cannot reasonably bill clients who have not signed an updated agreement, nor can you charge the appropriate fees if the agreement has expired. Moreover, contracts with renewal provisions may have this functionality built-in, but most often they do not. As such, many businesses fail to handle agreements optimally, whether inadvertently or through neglect. ERP contract management tools with automated renewal functionality will help manage contracts and ensure that only valid agreements are in effect at any given time. Risk Management – Risk management is an integral competency for all businesses, and does not end with contract negotiations. Mastery of risk management in your ERP solution means controlling and mitigating risk when it comes to contract management in particular. This means the ability to identify agreements that may pose a valid business or legal risk, track these through alert mechanisms, and then properly manage them to mitigate the downside potential inherent in such agreements. Compliance Tracking – Compliance tracking allows your business to monitor whether or not the terms and conditions of every agreement are being fulfilled in an efficient, effective manner. Not only is this vital to the protection of your business, it is also a critical tool to building and maintaining a broad portfolio of clients or customers. Centralized Contract Repository – All agreements, contracts and other legal documents must be centrally located as a basic requirement of contract management. This functionality is standard across all contract management solutions for ERP and other enterprise systems.
ERP合同管理系统带来的好处
For those familiar with how ERP (Enterprise Resource Planning) tools serve as the backbone of an enterprise’s systems, it’s a familiar story that the introduction of a new capability in those integrated systems drives a series of disruptive changes. And when it comes to contract management, such disruption is the norm.
Namely, it is how contract life-cycle management ("CLM") functionality in ERP facilitates larger business process changes that ultimately deliver cost savings to the enterprise and reduce risk across the business. For example, come up in a term sheet review or contract negotiation is a new capability – such as the inclusion of an early termination fee for a subscription agreement. Risk averse businesses will always (somewhat justifiably) add additional review layers to a deal before it can be signed. However, given the cost-effectiveness of the underlying cloud-based ERP tool, the contract managers and executives have a robust means of implementing the new process at a low cost to the enterprise. The result is that a new process can be effectively instituted with relative ease, and the business processes built upon ERP are by nature adaptable to introduce new business processes. The risk reduction element is worth further attention. One of the most commonly overlooked functions of ERP contract management functionality is that it helps to reduce costs related to minimizing risks in a broad range of ways. For example, risk reduction is frequently necessary when a vendor has not met contractual obligations. Failure to meet contractual obligations leads to contract disputes, and contract disputes lead to costly litigation. One way that this type of risk is reduced through the use of ERP is through automatically generated alerts when milestones (such as payment obligations by a purchaser or delivery/pickup obligations by a seller) are missed. The alert starts a process leading to the drafting of a letter of notice of breach, which in turn increases the likelihood that the business would seek to mitigate damage by remedying the breach before litigation occurs.
But that’s not all – there are a number of other ways that ERP CLM reduces risk. A very relevant example is how ERP integration improves analytic reporting, which allows users to better track third party blameworthy conduct, helping to drive contract modifications going forward. Similarly, risk reduction is achieved because error-prone manual entries are avoided. Finally, if the data stored on an ERP tool is designed to improve compliance monitoring with government regulations, then efficiencies can be achieved because contracts can be uploaded to the ERP system for review by in-house counsel to verify that the agreements, and the terms within them, comply with applicable laws and regulations.
But why do contracts need to be tracked, translated, and renewed? In today’s complex world of multi-language, multi-jurisdictional contracts, compliance tracking is crucial. This is especially true for larger enterprises, which can often be slow to perform tasks like international contract renewals due to the sheer volume of contracts. Failure to comply with such requirements can lead to costly breach lawsuits. For this reason, it is significant that ERP assists businesses with compliance by automatically tracking contractual deadlines and renewing contracts with appropriate outside counsel oversight. If a business is assisting its counsel in drafting contracts, then contract expiration clauses are more likely to be added to agreements. And, when that happens, compliance tracking becomes easier.
Last, but no less important, the benefits of ERP contract management are frequently cited as improved contract visibility. Without an easily accessible repository for historical contracts, users lack the ability to review the entirety of an enterprise’s contractual commitments for purposes of risk mitigation, audit trails, and future deal structuring. In contrast, the integration of ERP with contract data makes it easy to pull up old contracts, reveal historical trends in contractual business behavior, and leverage those historical trends to better inform or predict future business behavior. Such information is only accessible if the entire business is moving toward ERP integration.
The benefits of incorporating ERP CLM into standard business processes are numerous. In the long run, the rewards for successfully integrating ERP CLM into standard business practices include cost savings, risk reduction, enhanced collaboration, and improved contract visibility across the business. Due to the pressure to control costs, a growing number of businesses make implementing ERP CLM appear to be an obvious decision.
ERP合同管理面临哪些挑战
Managing contracts in an ERP system often comes with its own set of challenges. For example, a company may need to integrate its contract management processes across various departments, leading to a fragmented view of contracts. This can result in inconsistencies between different departments that also have different requirements and preferences for data and insights into contract performance. Poorly integrated data can also lead to compliance risks, as a company might miss critical contract requirements for certain transactions.
Another major issue for ERP contract management is data security. Companies are struggling to keep confidential supplier information secure and ERP systems may not be equipped to handle the complexities of contractual data. Also, the larger the company and the larger the volume of contracts the more generally accepted that ERP contract management is completed via spreadsheets that are especially vulnerable to errors and make it difficult for organizations to perform data analysis or search. Not being able to accurately identify when a contract will expire, when a price increase will go into effect or for terms that require external due diligence (e.g., patents), contracts may not get renewed at the proper time, maybe not even renewed at the end of their term, resulting in overpayments. Unless you’re a huge company, it’s just not possible to keep track of your contracts in an ERP system.
制胜ERP合同管理的最佳实践
For effective ERP contract management, several best practices should be adopted. By doing so, companies can set up a repeatable process that ensures ERP SaaS vendors adhere to their contractual obligations, respond to issue resolution requests, and satisfy other business requirements.
Regularly Auditing Contracts
Solutions that meet today’s needs may not fit tomorrow’s environment. To stay current, companies must regularly audit their contracts and take advantage of any possible improvement opportunities. Regular audits identify which aspects of a contract are in conflict with the way the business operates, and contracts can be renegotiated to ensure they align with corporate objectives. When performed accurately, contract audits also reduce costs and vulnerabilities related to the misunderstanding or misalignment of business objectives, expectations, and costs.
Using Clear Contract Templates
Without a standard contract template, negotiations can be inefficient and unproductive as each contract is unique . However, once a template is created, future contracts can be negotiated more quickly and at a lower cost. Contract templates should also be updated regularly to reflect not just the current business needs but any possible future needs as well.
Training Stakeholders
ERP contract management isn’t exclusively the domain of the IT department. Every department has a role to play in contract negotiations and each plays a different part in ensuring contracts are in alignment with business objectives. Providing comprehensive training ensures that all stakeholders are aware of the contract’s value and determine if the terms are being met and adhered to throughout the process.
Continuous Monitoring
Like everything else, contract management isn’t a one-time event. It’s a daily task that requires ongoing revision and monitoring. These high-level recommendations are but a few steps that can be taken to maximize the performance and value of ERP contract management.
如何选择ERP合同管理
When it comes to selecting an ERP contract management system, it is essential to consider a variety of critical factors that will ultimately affect the success and efficiency of your contract processes. In addition to the aspects discussed in the previous section, such as user experience and accessibility, contract management functionality, and compliance requirements, there are several other key considerations that should guide your decision.
One of the most important is scalability, or the ability of the contract management system to grow and adapt with your business. As your needs evolve, you will want to have a contract management system that can scale to meet demands without requiring a major overhaul. Your contract management solution should be able to accommodate a growing number of contracts and users, as well as new functionalities and features. A flexible and scalable system will ensure that your solution lasts well into the future, avoiding a costly replacement in the next few years.
User-friendliness is another essential consideration. Your ERP contract management system should be easy to navigate and use, both from a functional and a technical perspective. The system should be intuitive and straightforward, enabling users to engage with it quickly and easily. This is especially critical since contract management processes often require input from stakeholders across the organization. A user-friendly platform will facilitate collaboration and communication, improving the overall productivity and efficiency of your contract process.
Of course, you also need a contract management solution that integrates with the other core business functions used by your organization. This can include modules within your ERP system, as well as third-party applications, cloud-based programs, and other tools used across your company. An integrated contract management platform will keep your data silo-free, allowing all departments to access the information they need when they need it. This accessibility is vital for ensuring better cross-departmental collaboration, reducing redundancy, and improving the overall efficiency of business processes.
Support from the vendor is also key to an effective ERP contract management system. Ideally, your vendor should offer ongoing support services, training, and reporting to ensure successful implementation and ongoing productivity. When evaluating vendors, think about the type of support your organization will need, and be sure to ask about those specifics during your search. Working with a vendor that offers excellent support can improve the efficiency and productivity of your organization during the entire contract lifecycle, from creation to execution to closeout.
Finally, budget is always a key consideration when it comes to selecting contract management software. Many companies allocate a specific amount of their budget for contract management, and an ERP contract management system should fit within those parameters. However, you should consider more than just the upfront costs of the software. Look at your long-term contract management needs and costs. In addition to purchase or subscription costs, look at other priorities such as onboarding and training, ongoing support, and the time and money you will need to invest to get the system running and to use it properly.
Your ERP contract management system is a critical component of your overall business operations. By taking the time to compare systems, and by selecting one that meets your current and future needs, you can optimize contract management to improve your bottom line.
成功的ERP合同管理实例分析
Several businesses from a variety of sectors have experienced the positive effects of ERP contract management in their operations.
Healthcare, for example, is one industry that has benefitted from more streamlined contract management. Covenant Healthcare, a Michigan-based healthcare provider, uses JD Edwards Enterprise One. Health information management director LaDonna Barnett says that JD Edwards allows Covenant to monitor profitability, manage the volume of changing contracts, create reports and conduct audits of contracts. It is also used to make sure it is not overpaying vendors through inaccurate claims processing.
Another industry with successful ERP contract management is the restaurant industry . Missouri-based Star Concessions has contracts worth up to $60 million and shouldering the burden of tracking and keeping tabs on those agreements was becoming too difficult. According to CFO Manju Patel, "The ability of the organization to understand what’s required on all the contracts is really critical for us, . . . it also gives us an opportunity to be proactive and provide support to our operators." After implementing ERP contract management, Star Concessions is able to not only see the internal logistics and operations of the business, but also track contracts to fine suppliers that don’t meet their contractual commitments. The implementation of ERP has given Star Concessions great results.