5 Benefits of Contract Management Systems in Financial Services

Posted on 8th May 2019

If your business is financial services, whether it be insurance, accountancy, banking, wealth management or consumer finance, the contracts you have in place with your suppliers and partners are central to your organisation. They define how you will work with other parties, how you will measure success and what action you can take if a supplier does not deliver the agreed service.

Contract lifecycle management, or creating, implementing and evaluating contracts effectively, can be the difference between the success or failure of your business. Poorly managed contracts leave you open to operational and financial risks.

For example, if a contractor doesn’t complete work by the agreed delivery date, you may not launch a new product or service on time, leading to financial losses. If no one monitors contract renewals and a contract expires, it may disrupt an IT service. Or you may miss the chance to renegotiate a favourable price for the following year.

Contract Management begins well before the contract is signed. It’s advisable to place an emphasis on strategic sourcing and, fundamentally, to have a robust end-to-end procurement lifecycle process in place to protect your business and help you manage your contracts, but what are the benefits of a contract management system?    

It enables you to choose the right supplier

Negotiating the best terms for your business and choosing the supplier who best suits your needs is essential to get the best value out of a contract, not just the best price. The pre-signing process includes:

    •    A transparent tender process

    •    Price and contractual terms negotiations

    •    Completing due diligence correctly

    •    Agreeing deliverables and KPIs to support business strategy

    •    Defining stakeholders’ appetite for risk

Having a central depository for communications and draft documents will ensure you have a complete audit trail, including changes to be incorporated into the final contract.

It helps maximise business performance

Once you sign a contract, it’s important to make sure suppliers are meeting their contractual obligations by holding regular reviews to measure performance. Otherwise, suppliers may not prioritise you as a customer and the service they provide may not meet your business requirements. 

If you automate your contract management process digitally, you will benefit from data analytics the software provides. Reporting will give you crucial insights into contract performance, costs and savings which will help you make effective business decisions and drive performance.

It demonstrates compliance

The financial services industry must comply with stringent governance and compliance requirements from regulators and industry bodies. Being under intense scrutiny, it is essential you can show that you have a framework in place to manage your contracts effectively.

Contract management systems will allow you to:

    •    Provide audit trails and version changes of your contracts

    •    Show who is responsible for key actionable items and KPIs

    •    Store your documents securely 

    •    Restrict access to confidential documents to essential users

It reduces risk and increases productivity

From unfulfilled contract obligations to data breaches, identifying and having measures in place to mitigate risk is essential in financial services. Periodic audits of all contracts will minimise risk and increase visibility by giving you sight of the risks to your business.  

Automating contract management can also increase productivity. Software will routinely carry out time-consuming, manual tasks, improving accuracy and reducing errors. For example, it can send notifications for deadlines, payments or renewals. You will also have instant access to contracts stored in the cloud.

It improves communication and collaboration

Effective contract management will encourage closer collaboration between departments in your business, ensuring they communicate with each other throughout the contract term to carry out reviews and make sure agreed KPIs are being met.

For example, your legal and business development departments may not ordinarily communicate with each other on a day-to-day basis. However, your contract management process will ensure that they collaborate to produce and manage contracts.

Atamis contract management

The Atamis contract management system, Atamis CM, allows you to manage your company’s contracts efficiently. Most systems of this kind focus on three main aspects of contract management - a contract register, document storage and contract performance (KPIs). Atamis CM, however, also provides you with other standout features.

A risk register and issues log to help you manage and mitigate risks. This is supported by a reporting system where suppliers can advise you of any problems, automatically generating an audited case record. 

A savings record which will report on savings achieved throughout the life of each contract, providing valuable data to help decision making when the contract is due for renewal.

A Corporate Social Responsibility requirements record where the system calculates the projected benefit value of your CSR efforts in financial terms.

Full integration with data analytics, procurement planning, sourcing and SRM modules

Want to learn about Atamis contract lifecycle management or our other procurement solutions? Contact us now, and one of our team will be happy to provide a free demo and talk to you about our products and support services.
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