Now more than ever, enterprises must monitor the dynamics of the evolving supply chain and respond quickly. To obtain real-time visibility, collaborate with suppliers and streamline business processes, many enterprises are leveraging automation. A recent Oxford Economics Survey of 1,000 supply-chain executives found that respondents ranked “using automation to perform routine tasks” as a top strategic goal for the overall organization.
Designed to improve daily productivity, automation allows users to set up business policies and rules within a contract lifecycle management (CLM) system that apply to the flow of tasks, documents and information across business activities, enabling them to move forward without the need for human intervention. Automation allows repetitive simple tasks to be completed without risk of human error. This article will explore the many benefits of using automated CLM to manage corporate supply chains and how enterprises can best leverage automation to manage supplier risk amid the pandemic.
1. Providing Visibility
Automation enables access to real-time information, which allows businesses to react instantly to changing conditions and make informed decisions accordingly. Automated CLM systems with supplier and vendor portals can serve as a single source of truth for real-time conversations between suppliers and vendors on shortfalls, demand and delays. Having this visibility into the supply chain allows enterprises to effectively manage potential problems and develop supporting solutions as well as have the data required to forecast potential delays and shortages in the future.
2. Alerting Supplier Risk
The same survey noted above found that 39% of respondents have experienced a negative risk event at some point in their supply chains over the past three years, and 40% found their exposure to supply-chain risks has increased over the same period. With the addition of automation, the supply chain can be continuously monitored for outliers and potential risk. Automated contract management systems help mitigate supplier risk by flagging what supplies are coming up short, and in what amount, and whether a breach of contract has occurred. In addition, advanced CLM can utilize artificial intelligence to flag risky clauses and supplier agreement before they’re ever signed by the organization.
3. Accelerating Business Processes
With automation, enterprises can eliminate the slow, manual processes in use to manage supply chains, which frees up employees to focus efforts on driving additional value for the organization. CLM automation eliminates roadblocks in supply-chain processes such as coordination, monitoring, inventory checks and shipping — and it enables the full process to be executed from a single secured system.
Automated CLM solutions also allow businesses and suppliers to submit contracts and other requests directly into the system, speeding up business processes including sales, procurement and legal operations.
On average, the above benefits reduce the time required to complete a contract by almost 60 percent. Of course, this gain requires some upfront planning: enterprises first need to define which repetitive process can be automated and will bring the most value to the organization. Once a workflow automation solution is selected, employees can set up rules for the task within the platform and monitor it as it completes the specified task, adjusting accordingly. Example tasks ideal for CLM include distributing contracts, creating invoices and sending pre-written responses to customers who ask a common question.
4. Maintaining Compliance
While automation may keep things running without the need for a critical human eye, compliance and regulation should still be top of mind. Automated CLM workflows can be programmed to comply with regulations and corporate policies, meaning employees no longer need to manually check that each task is compliant. CLM also tracks digital workflows, so auditors can quickly and easily know what task was done — by whom and at what time — eliminating the need to dig up paperwork or employee email/paper trails, giving all parties piece of mind that all processes were followed within legal limitations.
CLM automation collects data for regulators, ensuring suppliers and customers can share proof that they are in compliance. It can also enable creation of records of the full supply-chain process from start to finish, allowing authorized individuals to confirm each step is within set corporate rules and regulations and make changes accordingly.
5. Supporting Remote Work
To keep the supply chain moving efficiently, IT systems need to be able to support the new remote work landscape, allowing suppliers, partners and customers to access files, protect corporate data and manage the end-to-end process. While IT teams are currently under extreme pressure to keep employees running remotely, no-code automated systems, including CLM, ensure remote workers can customize solutions to meet supply-chain needs, without the need for continual IT department involvement. Requiring no programming knowledge, no-code platforms allow users to create and execute their applications or processes quickly on their own. With a market projected to grow from $13.2 billion in 2020 to $45.5 billion by 2025, low-code and no-code platforms allow supply-chain experts to execute what digital strategies work best without the need for manual coding.
As the COVID-19 pandemic forces enterprises across industries to manage the unpredictability of supply and demand, automated CLM is a critical tool to help enterprises gain visibility, communicate with suppliers and manage risks, all while remaining compliant and accessible to remote employees. Businesses that successfully adopt automated CLM will be set up for success, not only in the face of a disaster, but for overall customer satisfaction and business growth.
Colin Earl is CEO of Agiloft.
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