The contract is at the heart of the procurement process. Everything revolves around the contract. The need to drive savings leads to sourcing. Sourcing leads to supplier selection and negotiation, and the offered terms are what drive the savings. These terms and conditions are captured in the contract, making it the foundation on which the savings are built. If all the purchasing and service delivery happens according to the terms of the contract, then savings realization is a given.
But, in reality, the terms negotiated in contracts — that can ensure savings — aren’t complied with, as buyers purchase “off the contract”, and savings quickly start to erode. Non-compliant or maverick spend, along with poor contract utilization lead to suboptimal savings — far from what the opportunity analysis promised.
The pricing and service levels you contracted to drive the savings can also drift, if not carefully monitored. That’s where GEP SMART comes in. The unified source-to-pay software platform ensures that the prices and terms agreed at the award are captured in the contract. The contract terms are as per your legal team’s requirements, and all the purchase orders raised with the supplier for those products/services are priced as per the contract. Any shift in pricing, delivery performance, or service level is flagged through supplier performance reporting. Contract compliance reports reveal any shift away from the plan that might affect the realization of projected savings.
A unified source-to-pay application doesn’t just make it easier to carry out each step in the procurement process. It creates a framework that ensures the savings you forecast end up being the savings you deliver. And with a unified platform for spend analysis, sourcing, savings tracking, contract management, supplier management, and purchasing, GEP SMART helps you do just that.
Drive Greater Contract Utilization and Compliance with GEP SMART
Contract management, often referred to as contract life cycle management, is about a lot more than contract document management. Throughout the effective term of a contract, its use and utility as part of a complete procurement process is often overlooked. GEP SMART solves this challenge.
Procurement contracts formalize the negotiations made between the buyer and supplier at the sourcing stage of the process, and thereby become the source of the terms that are used for all future purchases using GEP SMART’s procure-to-pay function. Every purchase finds its way as data back into the enterprise spend analysis program. Reports of spend in each commodity can then reveal to what degree the contract has been utilized, and at what price.
GEP SMART brings all this together in a single, unified software platform, making tracking and reporting so much easier and placing the contract right in the center of the source-to-pay process.