Contracts are central to the business strategy, operations, and success of your organization. In fact, contracts also represent revenue and business performance. They contain essential insights to maintain compliance and mitigate risks. Well, should you have KPIs for contract lifecycle management too? In this article at Business2Community, David Parks explains some important tactical KPIs that CIOs must focus on when measuring the contracts.
KPIs That You Must Track
“Contract management software allows organizations to leverage the data to not only optimize contract management and processes but support and influence business objectives such as shortening contract cycles or improving customer experience,” says David. You must track:
Average Time to Achieve Milestones
This KPI must emphasize the pre-execution phase of a contract and the average time to reach and execute each contract milestone. This includes requesting an agreement, drafting one, or negotiating it. Determine how long it takes and what can be done to improve them.
The Ratio of Missed Obligations
The consequences of a missed obligation can be huge. Setting the right KPIs will allow you to understand the ratio of complete, outstanding, and missed obligations and assess how it affects the projects.
Quality and Support
Apart from the timely execution of contract and output, the product/service deliveries must meet quality acceptance criteria like application functionality, user interface, and a number of defects. KPIs will help you keep a tab on milestones achieved and assess if you have met contractually agreed SLA requirements and if there are any breaches. The KPIs will help you determine if you can meet the company’s long-term objectives or make prior adjustments for anticipated issues.
A modern contract management system centralizes all associated documents, contracts, and contract data in a secure and dynamic contract repository. As CIOs, you can instantly access the data for digital transformation and business intelligence purposes.
To read the original article, click on https://www.business2community.com/strategy/contract-lifecycle-management-kpis-cios-need-in-the-digital-transformation-toolbox-02362175.