CLM for Procurement: How to Know What You Need

For too long, Procurement has functioned with outdated tech solutions that create more chaos than harmony. These outdated systems often exacerbate the challenges of contract management in procurement, making it difficult to manage contracts effectively.

Working within an AI-native CLM platform offers your team many benefits of contract management in procurement that solve your everyday procurement struggles.

Centralize Supplier Data

Data is a huge problem for Procurement. 

Where is supplier A’s data stored? Is Supplier B in that system, too? No? Well, where is it?

Why does the ERP system have this information about a supplier, but that spreadsheet says something entirely different? 

It’s chaos. 

Save yourselves the headache and establish a single source of truth. By storing all your vendor contracts in a single, cloud-based repository, you can access all the key data points within your supplier contracts in one place for full visibility and easy queries.

Streamline Purchasing

Your CLM platform shows you everything you need to know to make purchasing a breeze. Use AI-led insights from past contracts to inform your buying decisions and empower easy, repeatable purchases.

You can also use AI-powered contact templates and clause libraries to draft and review new supplier contracts in minutes. That gives your team more breathing room as you work on any of your dozens of other tasks.

Empower Strong Negotiations

As procurement pros, you need to keep prices low, compliance high, and vendors and executives alike happy. When a lot of that depends on how well you negotiate supplier contracts, every bit of insight helps.

Using contract management in procurement, you can get easy-to-understand, AI-powered insights in real time, as well as historical data from past agreements. This way, you keep your leverage during contract negotiations and show up to the table ready to get the best deal.

Maintain Compliance

When it comes to who your business does business with, it’s Procurement’s job to find suppliers that meet internal and external compliance standards. When that can mean anything from diversity and sustainability requirements to data privacy measures, you’ll want to make sure your efforts pay off.

But with so many suppliers across your vendor master list, it’s increasingly difficult to track every term and obligation. That’s where your CLM platform comes in.

Contract AI automatically pulls contract obligations to ensure your suppliers stick to the agreed-upon terms. Plus, the software can re-route and escalate obligation-related tasks in response to compliance breaches, reducing contract risk.

Ensure Vendors Deliver

Imagine you put in all the effort to onboard a supplier. Six months of trust (and payments) go by, and only then do you realize that the supplier has yet to make good on a single promise. 

With contract management in procurement, missed deliverables and accidental payments are a thing of the past.

CLM tracks agreed-upon terms and monitors fulfillment to ensure suppliers are keeping their promises and delivering on contract obligations. You can even connect the solution to your accounting systems to validate invoices, purchase orders, consumption, and performance data. 

Increase Cost Savings

Two words will forever be drilled into Procurement’s metaphorical head: Cost savings.

But without an easy way to access accurate supplier contract data, you fly blind, making uninformed decisions and losing out on cost-saving opportunities. 

When you have the full contract visibility and spend analytics that an AI-powered CLM solution provides, you can leverage that data to negotiate stronger terms and pricing, avoid gaps in supplier performance, and reduce value leakage.

Eliminate Unnecessary Payments

Have you ever found out you’d been paying a supplier months after you intended to stop, just because you didn’t notice the auto-renewal clause in their contract? What about realizing you were paying two separate invoices because another team also had an agreement with that vendor?

Don’t waste another cent on unintended spend. 

Visualize core contract data within your CLM to reduce the chances of having duplicate payments across teams and avoid paying for accidentally renewed contracts.

Strengthen Supplier Relationships

Strong supplier relationships can make a world of difference when negotiating stronger terms and obtaining more competitive pricing. But you need a reliable way to find the suppliers who are worth building those relationships with. 

Contract management software lets you identify your strongest performing suppliers and work to improve those partnerships for even better performance and pricing over time.

With all the ways CLM can improve the way your procurement team works, you’ll want to know exactly what to look for.