Taking Contract and Supplier Negotiation Management to the Next Level

In today's business world, efficient management of contracts with suppliers is essential for ensuring smooth and profitable operations. However, this process can become complex and challenging, especially in companies with a wide network of suppliers and variable contracts. This is where process mining and low-code automation emerge as powerful tools to improve efficiency and generate significant benefits.

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At OFI Services, we explain how we can achieve taking contract and supplier negotiation management to the next level:

Process mining allows us to analyze data to understand and improve business processes. By applying process mining to contract management with suppliers, companies can gain a detailed insight into how these processes are executed in practice and how profitable negotiations with suppliers and procurement processes are. For example:

Are we really employing the correct negotiation strategy?

In corporate policies, attractive negotiations for high-impact materials are sought. Sometimes, we believe we are doing well until we analyze purchasing data and identify a significant percentage of purchases without negotiation, or even buying materials that have already been negotiated without taking this into account. +1B USD in purchases identified without negotiation conducted.

Are we truly negotiating effectively with suppliers?

Even if negotiations are conducted with suppliers, it does not necessarily mean we are doing so effectively. Through process mining initiatives, we can identify if the agreed-upon price in a negotiation has been beneficial or not. For example, we can identify that a material is more expensive when negotiated compared to purchasing it from another supplier without negotiation, and conversely, when not utilizing the contract, the purchase is more expensive. +600K USD overpaid for not using the contract.

Are we negotiating with the right suppliers?

Process mining allows us to identify throughout history which suppliers have offered us the best prices and validate whether we have current negotiations with them or not. It also helps us determine if current suppliers with whom we have contracts are truly offering us the best possible market price. This enables us to make better decisions about the strategy of our procurement process. +80% price variation for the same material with different suppliers.

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With the comprehensive and powerful solutions we work with, we not only identify that we are losing money due to ineffective negotiation with suppliers, but we can also implement initiatives to mitigate or eliminate this situation.

 

For instance, we can develop applications to manage the entire lifecycle of a contract, from initial creation and review to signing and ongoing management. These applications can easily integrate with existing systems, such as document management systems or ERP systems, to ensure data consistency and integrity throughout the organization.

 

Or, we can elevate the level of solutions and create alerts that prevent purchases on critical materials without using a contract or even avoid buying from the supplier offering the highest cost. This way, we can save millions of dollars and have greater negotiation power with our suppliers.

 

There is no doubt that the combination of process mining and low-code automation offers a comprehensive strategy to improve contract management with suppliers. From optimizing workflows to simplifying complex tasks, these technologies provide tangible benefits such as reduced cycle times, improved service quality, and more informed decision-making. At OFI Services, we are committed to helping companies make the most of these tools to drive their business success. If you want to explore how process mining and low-code automation can adapt to the specific needs of your company and generate tangible results, we are here to assist you every step of the way!