As there is an ever-growing demand for sustainability across all sectors, businesses are looking for an approach that can balance environmental concerns with continued value and performance.
Corporate responsibility was primarily seen as a brand choice, but with the serious effects of our socio-environmental systems on climate change, having a sustainability strategy in place is becoming an essential part of a successful business model, not least because more customers and clients are now actively aware of and choosing businesses who have a lesser impact on the environment.
Due to the continuing climate crisis, this is a trend that is only set to increase. This may be because of the threat climate change may pose, with the CDP reporting that 215 of the world’s largest companies have now accepted the effect it may have on future business. This increased engagement with environmental issues by big business, is supporting a real change among industries to help increase sustainability and reduce environmental risk.
Governments are becoming a driving force towards change as they try to achieve their own environmental targets by increasing the regulations around environmental sustainability. As such, many businesses no longer have a choice but to employ sustainability measures to stay compliant with current legislation.
To help increase sustainability, lifecycle management is often employed by organisations looking to reduce their impact on the climate and carbon footprint whilst still maximizing their economic potential. This can either be used on a specific element of the business, such as products or services, or as part of as an over-arching, comprehensive assessment of business activities.
Although lifecycle management can be a beneficial business practice, for any businesses that deal with a large number of contracts, contract lifecycle management should be high on the list of priorities for improving sustainability.
Contract Lifecycle Management
The premise of lifecycle management is to take an aspect of the business, in this case a contract, and effectively manage it from beginning to the end, including the termination and off boarding process. By having a continued control of the contract over its lifetime, you can effectively manage all phases of the lifecycle, analyze the performance, protect against risk, and streamline the entire process.
In an effort to create sustainability, each contract phase needs to be carefully looked at and effectively managed with an analysis of the overall effect any measures you have in place and how they are affecting your sustainability performance. This helps identify areas that could be improved upon, from products and services, procurement, or workplace responsibility.
Businesses may often find it easier to take responsibility and improve their eco-credentials in areas with obvious issues such as products and their supply chain. For smaller businesses, or businesses that rely heavily on digital services, there may not be any obvious areas in which to improve sustainability. This is where contract lifecycle management can make a difference. By correctly applying and implementing this system into your business, you can improve your business sustainability.
The benefits of contract lifecycle management on sustainability
If one of your business strategies or targets for this year is to become more sustainable, then implementing lifecycle management can actually help your business reduce your carbon footprint and successfully attain your environmental goals.
Contract lifecycle management can also benefit your business, providing you with an all-in-one solution to help improve productivity and efficiency.
Procurement is a key area for sustainability. The supply chain is a vital element in trying to reduce your carbon footprint and become more aware of the ecological impact of your products and services.
Sustainable procurement is achieved through the correct balance of value, sustainable development, location, and quality. By viewing procurement through the environmental lens and using that principle in your assessments, you can ensure the best outcome for both your business and the environment.
In order to successfully achieve sustainable procurement, and meet the three key areas of economy, environment and social responsibility, your procurement team needs to have the framework and tools in place to effectively manage, report and analyze on their purchasing and investment. By using lifecycle management, your business can not only work towards reducing your eco-footprint but streamline this process and continually assess your performance.
There are many complex elements to procurement. Establishing the requirements of the organisation and then converting those needs into finding the right supplier, whilst managing the expectations of stakeholders and negotiating the best contract for your business, can sometimes be a lengthy process.
Manually managing these requirements with the need to be socially responsible during the procurement phase of a contract lifecycle can often be made easier by use of contract lifecycle management software. As well as being able to automatically track dates and key terms and clauses, contract lifecycle management software can offer a controlled transparency that is vital when forming new business relationships and the collaboration involved in creating a sustainable supply chain.
Assessing and managing risk is a vital aspect of procurement, with the added responsibility of adhering to company sustainability guidelines and performance, contract lifecycle management software can be used to support the procurement team. By using software such as the solution offered by Symfact, you can ascertain the criteria that needs to be met, including, if possible, vendors or suppliers that match your environmental requirements.
Due diligence is a vital part of any risk assessment and Symfact’s contract lifecycle management software is a prime example of how automated software can be used by businesses to access external risk intelligence and data sources to help assess the risk, resilience, and environmental credentials of third parties. Their contract management software has links leading to external databases such as those from Dow Jones, LexisNexis, Dun & Bradstreet and Refinitiv. Having access to advanced security profiling of both businesses and individuals and comprehensive background checks can help procurement teams analyze and evaluate the risks and suitability of each vendor and concentrate their resources on only those proposals and bids that are most likely to improve your business’ sustainability model.
Managing contract compliance and sustainability
Even if you have implemented lifecycle management within your company processes, it is important for your sustainability strategy to make sure all employees and third parties comply with your policies.
Incorporating sustainability clauses into your contracts can give you some legal recourse should any of your vendors or third parties fall below the standards set. Setting specific environmental KPI’s are also essential to manage and monitor performance. Using contract lifecycle management software can automate this process and reduce the time-consuming manual management of regular tracking and reporting, making it an effective solution in terms of compliance.
By adopting lifecycle management, you can give your contract processes structure and set a certain level of governance. Businesses can start taking control of their contracts and sustainability commitments and improve governance from procurement to off-boarding. Using automated technology can enforce standards and processes and increases the likelihood of compliance. By taking advantage of the control and overview contract lifecycle management software offers, your business can better ensure governance and compliance, essential with the increasing number of government environmental regulations. From a financial perspective, having datasets from the contract management processes in one place can also help by enabling organizations to plan for future sustainability strategies and performance by helping to predict any third-party supplier behaviour, optimizing both financial and environmental obligations.
Reducing your paper waste
One of the most common ways businesses are improving their eco-credentials is a move towards zero paper waste. For businesses that deal with larger numbers of contracts, the paper waste can be substantial. Not only is the consumption high, but a large paper usage also increases the commercial recycling costs. This is neither good for the environment or business finances.
Moving toward an online paperless management system may not seem particularly easy, however there is a simple solution. Contract lifecycle management software. By implementing this into your business, you can immediately improve your eco-credentials by cutting out paper contracts entirely.
All the information and data collected during the procurement stage, including contracts once negotiated and signed, can be stored in a central contract repository. This is a standard feature offered by most providers, including Symfact. By keeping all the information about bids, contracts and services online, not only do you reduce your paper trail and waste, increasing your sustainability in the process, but businesses throughout any industry can easily maintain and manage contracts whilst making administration a more efficient and streamlined process.
Integrating e-signature software can also have a big effect on reducing paper waste, all contracts can be signed online, negating the need for paper contracts even for the approval and signature process. This digital solution is not only a positive step forward for sustainability, but you have the benefit of quick authentication of any persons involved in the contracting process.
With the increase in climate change and a renewed focus on our environmental impact on the natural world, an increase of customers and clients are looking to support eco-friendly products and reduce their own carbon footprint by taking some personal responsibility.
Businesses that commit to sustainability policies are becoming more attractive to the average consumer, although if you publicly make it part of your marketing or brand, there is an increased pressure to adhere to not only global environmental regulations, but to stay compliant with your own policies. Using the visibility and transparency offered by contract lifecycle software, you can monitor both in-house and vendor/supplier compliance. This helps reduce the risk of a PR disaster that could potentially cause harm to your business reputation and revenue.
Contract Lifecycle Management Software
Contract lifecycle management software is a modern solution to the balancing your economic and business needs with a responsibility towards climate change. By taking advantage of the technological tools available to you, in this case, implementing an automated contract management system into your current business processes, you can successfully manage a sustainability model whilst improving on your own potential.
There is huge reliance by businesses on extended enterprise, or supplier eco-systems and therefore all businesses should have good contract management in place to support it. This becomes more important when trying to create a business that works for both you and the environment. This means there needs to be continual monitoring and evaluation of contracts and suppliers throughout the entire lifecycle. End-to-end management is a requirement for businesses looking to reduce their impact on the environment and where contract management software is of huge benefit. By continually managing your contracts using automated processes, businesses are less likely to miss sustainability targets and by monitoring environmental KPI’s and analysing operational data and workflows, there is a complete overview of a contract in regard to both financial and environmental terms.
Automated reporting features track valuable information, and trigger and event notifications can be set up for any specific event or milestone during a contract lifecycle. This helps businesses to have complete control over contracts and projects and helps with the end of a contract lifecycle, as contracts that are no longer considered eco-friendly won’t be left to auto-renew and businesses can stay on top of timelines regarding renegotiating contracts and exit strategies. Some automated management software includes a complete revision history tool, tracking how procedures, regulations and management has changed over time. This can be a useful feature when applied to your eco-strategy.
By effectively using contract management software, either as a whole or as part of your contract management structure, you can take control over an often-disconnected system between various departments, which can allow for better resource planning as your business moves forward. Better resources mean more resources can be directed towards a sustainability program.
If you are interested in using contract lifecycle management software to help your business move toward a more sustainable future, then please contact us here at Symfact today. We provide a smart, powerful, browser-based contract management solution to successfully manage and monitor end-to-end contract lifecycles. Every single process, from risk assessments and contract creation to contract renewals and offboarding, is streamlined to support productivity, improve performance, sustainability and increase business revenue.