Streamlining Technology and Indirect Procurement Negotiations
Indirect procurement is a mission-critical, yet complicated, function of most medium to large businesses. Your indirect procurement team is essential for making your business more competitive, and they rely on building and managing relationships with all kinds of vendors to fulfill your business needs.
The process of sourcing a supplier and negotiating a contract can be time-consuming and expensive. Without the appropriate oversight, mistakes can be made, resulting in additional costs, wasted time, and severed relationships with suppliers.
That’s why many businesses rely on vendor contract management software and collaboration between their legal department and procurement teams. Procurement and legal teams should work together to track spending, manage supplier relationships, and analyze data to ensure that every dollar procurement spends positively impacts the company’s bottom line.
Vendor Contract Management Pain Points
Businesses in all industries rely on indirect procurement to fulfill their daily needs. While every business and procurement department is unique, there are some common pain points indirect procurement teams tend to share.
Vague procurement requirements
It’s hard to deliver when you aren’t sure exactly what you need. Contracts that don’t clearly spell out procurement requirements are doomed to fail. Procurement teams and their suppliers must have a clearly defined, written contract that all parties agree on before moving forward.
Lack of transparency
Procurement teams and their suppliers need to trust each other. That means sharing time-sensitive and crucial information with each other and company stakeholders. The communication line needs to remain open to address any challenges or issues immediately, preventing more problems down the road.
Disconnect among leadership
Often, those in charge of indirect procurement functions do not have the level of influence needed to get the higher level of technology they feel is necessary to do their jobs effectively. Bringing in the legal team can help indirect procurement leaders articulate their needs and demonstrate how upgrading technology will positively impact the organization.
Disorganized contracts and indirect procurement paperwork can lead to fragmented spending across different categories, business units, and locations. This fragmentation makes it challenging for indirect procurement teams to identify savings opportunities on an enterprise level.
Wasted time between initial RFI to final redlined contract
The contract review process between procurement teams and suppliers can take months, from the initial RFI to the final redlined contract. In the process of contract negotiations, revisions can get lost or overlooked, making it difficult and time-consuming for procurement teams to finalize a redlined contract.
Challenges with Traditional Contract Management Software (CMS) for Indirect Procurement
Many businesses turn to generic CMS systems to resolve the pain points that exist between procurement teams and suppliers. However, generic CMS systems pose several challenges for indirect procurement teams.
Large volume of low- and high-risk procurement contracts requiring review
Keeping track of all the procurement contracts that require review can be a challenge, especially when there are risk-level variations that may require input from multiple departments, including legal.
Legal resources have limited time to review legal terms across the supply spectrum
Legal teams are responsible for more than just overseeing procurement contracts. Reviewing legal terms and ensuring their consistency across documents is time-consuming. Waiting for legal review can hold up negotiations or result in avoidable errors that waste time and money for everyone.
Third-party technology agreements, PDFs, and locked documents are difficult and time-consuming to review
Getting access to third-party documents, especially those that are locked, can waste time and hold up the procurement process.
Little visibility into data analytics that can improve templates and forms
You can’t fix what you don’t realize is broken. Generic CMS platforms don’t usually offer enough visibility into data to allow procurement teams to improve their templates for supplier communication and contracts.
High risks emanate from lower-risk contracts that are overseen or fly under the radar
Low-risk contracts can quickly become high-risk if there isn’t the appropriate amount of oversight. These contracts can easily get lost in the shuffle with generic CMS platforms.
Poor Contract Analytics and Stakeholder Visibility
Generic CMS platforms offer little ability to bring in data from various home-grown intake systems for meaningful sourcing analytics and internal status reporting.
Challenges with renewal planning and post contract opportunity analysis
Most Indirect Procurement teams struggle with keeping up with upcoming product renewals and important commercial data embedded in various purchase documents (like master agreements, orderforms, SOW’s etc) across multiple disconnected systems. This limits their ability to plan early and strategize for any cost savings opportunity analysis.
CMS Solutions for Indirect Procurement from DocJuris
Why use generic software when you can implement a CMS solution that is designed explicitly for indirect procurement? DocJuris makes it easy for procurement and legal teams to collaborate with each other and suppliers.
Quickly screen third-party software agreements (SaaS and licensing) for warranty issues, use restrictions, and more
Our software makes it easy to scan and screen third-party agreements to quickly spot restrictions and issues. That way, you know what to focus on as you redline a contract.
Optimize legal resources by deploying rule-driven playbooks
Don’t reinvent the wheel every time you create a contract. Our integrated playbooks speed up redlining and ensure consistency with every contract, including making sure legal terms are used appropriately.
RFP redline explorer to quickly group and scan vendor redlines into a unique pivot table
Instantly see what changes your vendors have made, so you know which sections of the contract need your immediate attention.
Pulls data on the frequency of fallbacks or time spent in critical areas of contracts
Fine-tune your contracts by knowing which sections get the most redlines. Having access to real-time data can help you improve your contracts to save everyone time, including legal, procurement, and suppliers.
Lower risk contracts are quickly screened and addressed for the top issues
Low-risk contracts don’t necessarily require the same level of attention as high-risk contracts. With quick screening, you can identify the top issues that need to be addressed by your procurement or legal department, saving everyone time and getting you from RFI to final redline as efficiently as possible.
Better Discovery during renewals & post contract savings opportunity analysis
DocuJuris can be a secondary source of data for commercial information contained in Order Forms (like product count, cost, pricing etc) which can be extremely helpful a) to track product renewals b) during post contract cost savings opportunity analysis.
Enables the ability to pull both Master Agreement & Order Form data in the same tool
With its ability to bring together everything your team needs and integrate with existing ERP systems or home-grown CMS , docJuris can help with simplified visibility of having all contract obligations related to a purchase within the same tool (master agreements, Order Forms, SOW etc).
Enable enhanced contract analytics and Internal status reporting
Built in dashboard view and the ability to pull data from existing intake systems or other internal ERP systems can enable customized status reporting for business owners and executive leadership audience.
See for Yourself How DocJuris Helps Indirect Procurement
Don’t settle for a generic solution when you’re looking for software to improve your indirect procurement process. Instead, look for a solution that is specifically designed to enhance collaboration between procurement and legal teams.
With DocJuris, procurement and legal teams work together to increase efficiency and decrease risk during RFI/RFP processes via tactical tools that get the job done.
See for yourself how DocJuris can save your procurement and legal teams time negotiating with suppliers and fulfilling their roles. Schedule a demo today.