How Contract Lifecycle Management Works: Extend the Contract Without Losing the Benefits

If the supplier is not critical and there are other alternatives to consider, then the contract with that supplier should be reviewed when the existing contract is about to expire. 

Procurement managers use negotiations to get better contract terms. However, sourcing events (e.g. RFPs) can yield better results. In an RFP, both an established supplier and companies that offer similar goods or services submit their proposals in a competitive environment. 

A sourcing event is an effective way to get better terms from suppliers when renewing contracts.

Factors can have an impact on the bidding process.

  • Time constraints – if you work with dozens of suppliers, it can be difficult to run multiple sourcing events at the same time. Each event must include competitors that should be sourced first. 
  • Psychological barriers – the procurement manager is not always prepared to tell the supplier that “it will not be the same as before”. 
  • Lack of skills and experience in running sourcing events

Bonus deductions or a frank conversation with the procurement director or general manager can effectively combat the psychological barriers of the procurement manager, while technical issues can be resolved by using a convenient procurement solution.

Acquirell, an all-in-one SaaS procurement solution, provides the ability to fully control the company’s procurement process. This includes, but is not limited to, the management of sourcing events and the control of contract renewal terms: the system notifies the user of the upcoming contract renewal and all key events. The manager has enough time to coordinate any changes in the contract terms with the supplier or to organize a sourcing event with other suppliers and initiate a new contract.

How Contract Lifecycle Management works with E-Sourcing in Acquirell

The control of the contract renewal conditions can be configured in Acquirell: key dates and notifications can be configured for each contract so that the procurement manager does not miss the opportunity to negotiate or organize sourcing events.

Notifications in Contract Lifecycle Management Software

Sourcing events can be used not only for purchasing goods and services at the best terms but also for market research. Invite the suppliers to the E-Sourcing event, and run RFx with them. So, you will explore the proposals on the market.

How Contract Lifecycle Management works through conducting sourcing events

The results of the RFP can be used while negotiating the contract prolongation with the existing supplier.

Control configurations and evaluation criteria for assessing proposals make it possible to get rid of the standard annual contract renewal and help to reduce purchase expenses, improve the quality of the goods and services received, obtain better payment options, get better delivery schedules, etc.

Gaining full control over contract management is just one of the benefits of implementing Acquirell. Book a demo to discover more features and explore how Contract Lifecycle Management works in Acquirell.

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