Last week we began making the case for contract analytics by reviewing the current landscape of strategic procurement and spend analysis. We learned that, although an important process for improving efficiencies and identifying risk, transactional spend analytics can only take procurement teams so far. In order to influence LOBs and take a proactive role in business transformation, technology must be in place to drive increased value – and that is where contract analytics comes in. Today we will take a deeper dive and discuss the benefits of mining the data within your contracts and how contract analytics can take teams from the backroom to the boardroom.
Thanks to the increased digitization of contracts and the use of artificial intelligence solutions, organizations are empowered to take digital transformation into their own hands. To address procurement’s lack of 360-degree visibility, we have to move beyond spend analysis and harness the power of AI to quickly discover, structure and analyze the data within contracts. Contract analytics does this by enabling users to review contracts at the clause and sentence level so that they can easily find information of interest, such as terms, dates, monetary amounts and particular phrases related to obligations and risks.  Through this process, organizations are able to mine insights and come to answers quicker than ever before. Select component capabilities of a contract analytics solution include:
- Offering a dashboard view of all contract activity (e.g., new contracts, expirations, flagged elements such as risks, associated projects, etc.)
- Enabling a user to quickly access a centralized contract repository
- Providing insight into all contracts that meet a specification or search criteria
By implementing contract analytics, procurement can tap into opportunities that it previously could not access. Access strategic insights put procurement teams in a position to further extend its influence across the business and enhance its value proposition. This is increasingly important as teams look to effect change within their organizations and impact digital transformation. Specific benefits include:
- Identification of new savings opportunities (e.g., volume or early payment discounts, rebates, supplier performance thresholds)
- Proactive alerting to supplier negotiation opportunities and priorities
- Linking contract-related data with spend data to create a more holistic/complete view of spending across the business
- Enhanced supplier management capability through better obligation visibility and tracking
This is only a fraction of the insights that contract analytics can provide to business teams, but even so, show the noticeable impact beyond that of what spend analytics provides. When considered as part of a broader digital procurement transformation strategy, contract analytics can enable procurement organizations to enhance their value and be seen as a true strategic partner. By utilizing search, discovery and reporting capabilities for structured and unstructured contract data, procurement analytics tools are driving increased value across multiple business processes. Whether you are evaluating existing vendor relationships or future contracting processes, 360-degree view into contract information will enable you to maximize your value and expand your influence across the LOB.
To learn more about how Seal for Procurement can assist in your organization’s digital transformation, click here. For more on making the case for contract analytics, download the Spend Matters: Making the Case whitepaper here.