Need it versus Got it – A Risk-Based Approach to Contract Management
Last quarter we introduced you to one of the newest features of the Hiperos Platform, Contract Risk Management. This module, which is meant to supplement existing Contract Lifecycle Management systems, was created with a great deal of input from current Hiperos customers. Organizations need a better way to leverage the information collected during risk assessment and due diligence in their contracting and ongoing performance management processes.
CCRM fits neatly into the workflow that starts with a pre-contract engagement request and finishes with a forged relationship. It not only allows organizations to better calculate and manage inherent risk, but also to manage the residual risk that remains after a contract has been negotiated. As a result, they can establish risk-appropriate controls.
Organizations need a better way to leverage the information collected during risk assessment and due diligence in their contracting and ongoing performance management processes.
We had a customer tell us, “I need a system that tells me what I was supposed to negotiate into the contract versus what I actually got.” CCRM fulfills that need. After a third party has been identified as a potential business partner, based on due diligence and risk assessment, CCRM intelligently draws clauses and controls from a clause library for inclusion in the contract negotiations.
Furthermore, organizations need to track how the risk profile of a third party relationship changes from pre-contract negotiation to post-negotiation. They need to clearly understand which risks were mitigated with the contract and which were not prior to contract signature. CCRM tracks which clauses have been included, amended or omitted and leverages this information to score the residual risk of the relationship. It also allows companies to understand the effectiveness of their contracting processes and suggested clauses.
Based on customer input, Contract Risk Management has been designed to provide great flexibility and be configurable to meet the needs of any company and diverse personnel. With CCRM, our customers can ensure that risk assessment and mitigation is incorporated into their contract process and make the process more effective and efficient. As a result, they can derive the most value from their third party relationships while minimizing the risks.
Last month procurement and supply chain specialists, Spend Matters, shared their thoughts on CCRM in their blog. You can access the article at: http://spendmatters.com/2015/05/21/putting-pen-to-poisoned-paper-contractual-risk-assessment-and-its-role-in-corporate-risk-management/
CCRM will be part of the Summer ‘15 release. To learn more about Contract Risk Management, please contact Bethany Dekker at 908-981-0061 or at firstname.lastname@example.org.