Did you know that according to the International Association for Contract & Commercial Management? As a result of poor contract management, organizations potentially lose as much as 9.2% of their annual revenue? Overpayments, failure to apply discounts and rebates, non-compliance fines, and missed expirations make up this substantial financial loss. Ample support and resources must be allotted for contract management as it is an integral part of the company
Jumping on this research, Forbes recently published a report stating that companies regularly lose over 20-30% of their annual revenue due to inefficient systems and business procedures.
Any process or department that does not produce the maximum output or are costing more resources than they are bringing in should be subject to observation and analysis. A solution must immediately be provided to avoid the business losing more than what has already been lost. It is necessary to create an environment where employees find it urgent to report any inefficiencies in the system.
Here, I have listed down some of the departments that may be costing you money through its problematic processes.
Contract data is lost when the moment that a contract is filed. How does this happen? Well, a contract manager is only as great as his memory is. Unfortunately, he regularly has to deal with dozens upon dozens of contracts. Once a contract is signed and executed, the physical document goes to a filing cabinet, and virtually, all information gets forgotten.
An effort to locate the file only appears when the need arises, i.e. in the case of disputes, disagreements, doubts of non-compliance, etc. In most cases, it is already too late to avoid problems that could have easily been avoided had there been better visibility of contract data.
More often than not, organizations only have a manual contract management system which entails staff manually trying to locate vital pieces of information in filing cabinets full of hundreds of past contracts. In business, this is an unacceptable procedure as it is both exhausting and time-consuming.
How to fix:
An automated contract management system like GatekeeperHQ is one viable and sustainable way of improving your system. Contract Management software has many handy features that will allow users to speed up the contract lifecycle, such as better visibility and electronic contract signing. It can even transform raw data into valuable insights that help business owners with better decision making.
The US Bureau of Labor Statistics found that 3 million Americans quit their job each month. This huge amount is indicative of very low retention rates for companies. At the same time, having to train new employees every few months costs resources such as human resources and employee time. This also means that the knowledge remains still instead of someone already gaining mastery over one job.
Employee turnover is quite expensive. HRCloud estimates that the actual cost of replacing highly-trained employees, executives, and high-ranking officers can cost the company double their annual salary. Applicants will also think twice of accepting your offer if the employee retention rate is very low as it usually is indicative of a negative office environment.
How to fix:
There are three ways as to how you can improve your employee retention rate.
1) Increase Compensation Package
Employees who feel that they earn what they are worth will think twice about moving to a different company.
2) Establish Strong Office Culture
Having an enjoyable time in the office will not only improve your employee’s productivity but also give them a sense of belonging. If they feel that they are part of something bigger, then chances are they will not as quickly jump ship.
3) Provide Your Employees A Work-Life Balance
Work-Life balance is quite hard to come by. Companies are now trying to milk their employees for every bit of productivity. This should not be the case as overworking employees will gradually decrease the quality of their work.
The ESOMAR Global Market Research 2019 report states that the market research industry is currently valued at over $47 billion. Market research is one of the most important, yet underappreciated, procedures of an organization. Unfortunately, it is common for the research departments of companies to be either underfunded, understaffed, or worse, nonexistent. Conducting market research is crucial in gathering valuable data such as who your target demographic is, what do they want, how to entice your target market, etc.
How to fix:
Hire data scientists to improve your data collection and analysis procedures. More and more companies realize how crucial research is to the business, which is why you should invest in it before your competitors do.