If the activities of any global energy firm are broken down into individual tasks you would see thousands of contracts. Energy firms can invest in a more modern approach to contract lifecycle management to handle these vital documents, retain confidentiality and improve their position within the industry.
New laws and industry regulations are requiring cost-cutting measures within the energy industry, which is leading companies to implement innovative service strategies and partner agreements. For example, newly restructured services are shifting more responsibilities onto vendors. Merger and acquisition activity is rewriting industry relationships as there was $141 billion exchanged through 299 transactions in the first half of 2014.
Where CLM Succeeds
Contract lifecycle management provides numerous benefits. It improves visibility into expenditures and helps businesses identify unnecessary and unauthorized costs. Effective CLM can cut spending by an average of 22 percent.
Efficient CLM also reduces the time firms spend manually reviewing and approving contracts, which shortens negotiation timelines by 50 percent and accelerates transactions.
In terms of negotiating, CLM also heightens a firm's bargaining power. Weak contract management can ultimately cost a company about 9 percent of its annual revenue.
Additionally, CLM leaves out the surprises and improves accountability, which in turn lowers operating and processing costs anywhere from 10 percent to 30 percent.
Confirming a Candidate
The benefits of CLM are endless, but firms must first identify a qualified CLM solution and implement it. A strong CLM candidate will have a template system to automate and improve the speed of lower-level administrative functions. It should also have role-based access controls for the firm to maintain security and integrity. Analytics options within the CLM provide critical data regarding performance to measure against business standards and goals.
The CLM platform should also be easy to integrate into the firm's ever day applications.
Selecting a Setup
When choosing a CLM platform, firms can use an on-premises installation or Software-as-a-Service. SaaS options are hosted by the vendor, which can allow for faster upgrades and fewer IT support expenses. On-premise platforms are hosted behind the company's own firewall and customization can complicate future applications.
Firms should review the functional requirements and operational goals to guide their platform selection process. Additionally, feedback should be collected from all impacted stakeholders as early as possible, and implementation of the CLM should be backed by executives.
To ensure the CLM is fully integrated into the transaction process, companies are better off choosing a program with a user-friendly interface.
For more information, download the full White Paper here