Langenhagen,
18
September
2018
|
08:42
Europe/Amsterdam

Digital Contract Management: It’s time for a more intelligent approach to contracts

Summary

Contract Management is a core business function that spans both operational and legal concerns and underpins every essential relationship – from customers to vendors, to partners, employees and suppliers. And yet, for many businesses, the vital organisational task of Contract Management remains a manual, paper-based task that’s highly labour-intensive and inefficient. Companies therefore identify challenges like reducing costs and improving efficiency with 66%, minimising errors and unnecessary delays with 39% and reducing the amount of paper in the process with 30% as their core priorities when going digital.[1] The digitalisation of the process brings a wide variety of advantages that accelerate processes at multiple points within an organisation and help deliver essential and timely management information. Even so, Contract Management is often overlooked in digitalisation processes, leaving businesses in the dark and exposed to the risks inherent in manual processes. Konica Minolta is helping its customers bring their Contract Management processes into a new era with its digital solutions.

There is probably nothing more fundamental to business than a contract. If finance is the lifeblood of an organisation, contracts are a connective tissue of trust and understanding that holds everything together. Yet, in many companies, what should be a source of strength has become an inflexible pain point, as contracts remain tied to outdated paper-based processes. Today, for example, 85% of companies still use manual processes to manage sales contracts.[2]

 

Paper-based processes not only require a physical archive that often takes up a considerable amount of space, but managing such archives is inherently challenging, labour intensive and demands considerable time and resource. Despite this effort, document searches can prove very time consuming and it remains near impossible to maintain a timely and relevant overview. As a result, 73% of organisations find it difficult to or impossible to run reports that share information on terms in their contracts.[3] Furthermore, critical deadlines or contract periods can be easily overlooked. Unintended contract extensions can result when cancellation deadlines are missed, leading to unnecessary costs and added inflexibility.

 

 

A new dynamic role for Contract Management

With digitalisation, the role of Contract Management can be transformed from being an administrative necessity and barrier to agility to an enabler of improved business performance. Marcel Cobussen argues that digital Contract Management is an increasingly sophisticated discipline that is a significant departure from the past.

Marcel Cobussen, Business Development and Product Marketing Manager, International Marketing Division, Konica Minolta Business Solutions Europe
In many organisations contracts are still simply stored in paper form or digital archives, after being manually processed by all stakeholders. Out-dated procedures like these take up lots of time and resources and businesses can immediately benefit from the wide functionality of a digital Contract Management system.
Marcel Cobussen, Business Development and Product Marketing Manager, International Marketing Division, Konica Minolta Business Solutions Europe

Konica Minolta’s digital contract management solutions help organisations administer all corporate contract documents in a simpler way with increased workflow efficiency. With digital Contract Management, users gain full control and transparency over contract deadlines and the system sends reminders if approvals, changes or cancellations are necessary. The system standardises and automates all phases of Contract Management from contract request, contract authoring, to contract execution workflows using electronic signatures.

“With digital Contract Management our customers are able to assign the right authorities to the necessary people to accelerate document processing,” explains Cobussen. “Capabilities also include reminders, version control, and advanced search – all of which can help ensure far greater efficiency, agility and full regulatory compliance.”

 

Automating Contract Management can drive improvements across a number of measures. As well as reducing administrative and legal costs, Konica Minolta’s digital Contract Management solutions help businesses to improve supplier performance and negotiation efficiency. Looking at the wider market for solutions of this nature, analysts at Forrester and Aberdeen note that digitisation offers the potential to improve compliance by 55% and reduce contract cycle times by 50%. Additionally, a 25% improvement in contract renewal rates can be achieved as can a 1-2% improvement in revenue.[4]

 

 

 

Konica Minolta’s project management approach

The process of managing customer, vendor, partner, or employee contracts is no simple task. Incorrect handling can lead to penalties for non-compliance, lost opportunities, and potentially costly legal audits. However, the challenges and inefficiencies associated with paper-based, manual processes increase the chances of such problems occurring.

 

Marcel Cobussen, Business Development and Product Marketing Manager, International Marketing Division, Konica Minolta Business Solutions Europe
Digitisation of contracts removes paper from the process and simplifies storage and retrieval by putting contracts into a single central database. Yet every business is different, and the process of selecting and implementing an appropriate solution needs to be handled carefully.
Marcel Cobussen, Business Development and Product Marketing Manager, International Marketing Division, Konica Minolta Business Solutions Europe

Konica Minolta takes a customer-centric approach towards digital Contract Management that takes into consideration each company’s business environment and working processes. Individually tailored Contract Management solutions are designed around the customer’s needs.

 

Case Study: MVB Truck & Bus

MVB Truck & Bus Bulgaria AD is an official importer of MAN Truck & Bus products to the Bulgarian market. The company had been keeping hard copies of contracts while also making digital copies and manually entering summaries of each document into Excel. But as the volume of contracts grew, this process become excessively burdensome, while problems arose from lost documents and data entry errors.

MVB engaged Konica Minolta to optimise its Contract Management processes and create a digital version of its contract archive. The solution implemented allowed for old contracts to be efficiently scanned and automatically indexed, while also notifying relevant staff members when each document had been digitised. When creating new contracts, the system provided pre-approved digital templates, with an automated workflow that forwarded contracts to approving parties and signatories.

Key client benefits in this case were automatic notifications of contract renewals, a system with clear traceability for the creation and approval of contracts, one storage location for contracts and a digital archive.

Svetoslav Krastev, Senior Financial Director, MVB Truck & Bus Bulgaria AD
At each step, every one of the people involved in the process knows what is happening with the document, and the way the contract is moving in the system is set in the software and pre-defined. Return on investment in a solution is often expressed not only in money, but also in achieving high customer satisfaction.
Svetoslav Krastev, Senior Financial Director, MVB Truck & Bus Bulgaria AD

Konica Minolta’s digital Contract Management – a simpler, more powerful solution

While every company’s needs may be unique, all of Konica Minolta’s Contract Management solutions help businesses administer all corporate contract documents in a simpler more effective manner, thanks to the following key benefits:

  1. Central contract administration

    The digital capture of all incoming documents related to any individual contract (including e-mails, protocols, etc.) provides an essential basis for enhanced control and a better overview.

     

  2. Transparency in all processes

    From text searches through the entirety of an individual contract to analyses of all relevant contract parameters – all information can be accessed instantly. This makes it simple to assess contracts, for example with regard to their value or duration, and considerably facilitates financial controlling.

     

  3. Leverage contracts to the advantage of the business

    Losing track of contract periods and deadlines is no longer a problem, thanks to the unified, complete mapping of all documents as well as the automatic generation of reminders. With no more missed deadlines, businesses can start to use contract conditions to their best advantage.

     

  4. Digital approval for faster lead times

    Approval workflows for contracts have to be transparent, flexible, and documented in their entirety. Revision-safe archiving is just as essential. Digital Contract Management ensures all this, providing valuable support in fulfilling various compliance requirements (such as HGB, Basel II, company regulations, etc.).

     

  5. Data security as basis for the system

    Elaborate authorisation concepts rule out any uncontrolled access to contracts. Employees can only retrieve specific contracts and information as defined in their personal access rights – a level of security that far exceeds that of a conventional paper archive.

 

Signing up to digital Contract Management – the case is clear

“It is evident that many businesses are needlessly tying up resources in the administration of paper-based Contract Management processes, but it’s also clear that these processes frequently act as a bind on the business itself,” concludes Cobussen. “With Konica Minolta solutions for Contract Management we are helping our customers break free and regain control over their documents and contracts. This not only helps speed up processes, save money and relieve employees, but it also helps to improve the relationships with other company stakeholders.”

 

[1] Comspec Consulting & Konica Minolta, Improving and automating business operations through information management – a benchmarking survey, 2018

[2] Sirma Enterprise Systems, What you need to know about Contract Management, 2017, https://www.sirmaenterprise.com/what-you-need-to-know-about-contract-management/

[3] APTTUS, 10 Eye-Popping Contract Management Statistics from the General Counsel’s Technology Report, 2016, https://apttus.com/blog/contract-management-statistics-from-the-general-counsels-technology-report/

[4] Sirma Enterprise Systems, What you need to know about Contract Management, 2017, https://www.sirmaenterprise.com/what-you-need-to-know-about-contract-management/

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About Konica Minolta Business Solutions Europe

Konica Minolta Business Solutions Europe GmbH, based in Langenhagen, Germany, is a wholly owned subsidiary of Konica Minolta Inc., Tokyo, Japan. Konica Minolta enables its clients to champion the digital era: with its unique imaging expertise and data processing capabilities, Konica Minolta creates relevant solutions for its customers and solves issues faced by society. As a provider of comprehensive IT services, Konica Minolta delivers consultancy and services to optimise business processes with workflow automation and implements solutions in the field of IT infrastructure and IT security as well as cloud environments. Konica Minolta was awarded the prestigious “Buyers Lab PaceSetter award for Smart Workplace Vision” from Keypoint Intelligence” as the only vendor in its industry thanks to its forward-looking vision of the future of work and investment in innovative technology. Being a strong partner for the production and industrial printing market, Konica Minolta offers business consulting, state-of-the-art technology and software and, in 2017, was the production printing market leader for the tenth consecutive year in Europe, Central Asia, the Middle East and Africa (InfoSource). The hardware portfolio covers light and mid production as well as industrial printing machines. Konica Minolta Marketing Services provides value added services that intelligently link print and digital marketing in an effective and efficient way. In the healthcare sector, Konica Minolta drives digitalisation of clinical workflows and offers a broad range of next-level diagnostic solutions. Through its Business Innovation Centre in London and four R&D laboratories in Europe, Konica Minolta brings innovation forward by collaborating with its customers as well as academic, industrial and entrepreneurial partners. Konica Minolta Business Solutions Europe is represented by subsidiaries and distributors in more than 80 countries in Europe, Central Asia, the Middle East and Africa. With almost 9,900 employees (as of April 2018), Konica Minolta Europe earned net sales of over EUR 2.37 billion in financial year 2017/18. 

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