Wikipedia defines efficiency as the “ability to avoid wasting materials, energy, effort, money and time doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, without a waste.”
In the world of business, attaining a high level of efficiency is nirvana. It doesn’t matter if you’re a business owner or not, the idea of being efficient is a desirable trait that you want in your company. A company’s end goal is to reduce their wastage and optimise everyone’s potential. This could mean minimising costs and expenses to laying off stagnant or unnecessary employees.
Imagine you own a business and you see that a lot of aspects in your company aren’t working out in the grand schematics of things. Maybe you realise that 10% of the staff are redundant or that the vendors you have employed are not delivering on the agreed upon posts. Instead of earning you money, they are losing you the big bucks. Of course, you would immediately do something about it.
Having a Contract Management Software can easily tell you this and more. A Contract Management Software or CMS provides users a comprehensive and clear vision of the company’s contracts. This allows users to determine which ones are efficient and which ones are not. These insights can help you take the necessary actions to minimise your company’s expenditures.
Digital agencies are one of the sectors that have the most contracts. If you’re an owner or manager of a digital agency, ask yourself this. How organised are your contracts? Can you easily locate the contracts and determine whether they’ve been followed? A CMS automates your entire contract database with automation tools ready for you to filter each contract by duration, vendor, price, etc.
Through monitoring your contracts with a Contract Management Software, it’s a guarantee that you will get the full value from all your signed contracts.
Integrating a Contract Management Software is fast and easy. Depending on your current contract management process, the number of contracts you have and the resources you can commit to the implementation phase, it can take only 4 – 12 weeks!
With a Contract Management Software, you can easily monitor and track the performance of each vendor. Were the agreed upon KPIs met? Are you happy with your ROI? With loads of clients, it is not easy to track all the due dates, deadlines, renewals, and conditions that needs to be met. While most companies hire a staff to track their contracts, that staff is still human and thus has certain limitations. You will need an entire department to fulfil what the CMS can provide.
Studies have shown that companies with poor to no contract management systems lose over 9% of their annual revenue due to inefficiency and unmet KPIs. I think it goes without saying that this is a huge amount that your company could’ve saved for future expansion and investment. Make the calculations. How much do you think are you losing because of poor contract management? Is it under or over 9%?
Now maybe you’re thinking, what’s a 9% going to do, I still have 91%. However, if you think of it, in eleven years, you’d have lost almost one whole year of revenue. This is, of course, assuming that your business doesn’t grow for how could it? When it has not been optimised and losing a lot of money.
The biggest reason why most clients don’t renew their contracts with digital agencies is because the KPIs that were agreed upon were not met. This is usually unintended but rather, simply just slipped the mind on the part of the digital agency. By automating all KPIs, you can track whether they have been met or not. Having a fully-functioning CMS ensures that you satisfy your clients enough that they will decide to renew.