Today, the higher-education system throughout the U.S. consists of more than 4,000 accredited institutions. With colleges and universities spending billions of dollars annually on operating costs, managing costs and reducing overhead is critical. And with social distancing guidelines leading to decreased enrollment for the 2021-2022 academic year and transitions to digital learning, colleges must find ways to optimize their processes and save money. Luckily, contract management software is the perfect tool to help colleges and universities achieve operational efficiency.
Much like how students have progressed from textbooks to tablets to consume information, higher-ed institutions can implement modern contract management software to replace antiquated systems. With the right platform, colleges and universities can eliminate silos in the contract process and gain visibility to reduce operational costs.
Lower Operating Costs
Higher education is big business. Between 2016-2017, U.S. colleges and universities spent $584 billion on student and operating costs. The last thing these institutions need is an inefficient budget. Unfortunately, employees―through no fault of their own―can contribute to financial issues if they’re not put in a position to succeed. Staff costs account for up to 63% of a higher-ed institution’s operating expenditures. Time spent searching for contracts or conducting manual, administrative tasks could be otherwise allocated to higher value and more impactful work.
Luckily, contract management software will help you stretch every last dime of your budget as efficiently as possible by reducing the time spent monitoring contracts and overhead costs associated with those contracts. CLM software automates mundane tasks. Just think about all the time- and financially-related benefits you’ll achieve by no longer having to print multiple copies of contracts, pay for file storage, or complete manual approval processes.
In the age of COVID-19, contract management efficiency is essential, as colleges and universities deal with the reality of more online classes and less populated campuses. During such a transition, institutions may begin to hemorrhage money, since all of those potential on-campus revenue streams are limited or non-existent. Because of this, institutions will need to focus on decreasing operating expenditures.
With advanced CLM software, colleges and universities have a comprehensive way of directly reducing costs, regardless of the educational model (in-person, fully online, or hybrid learning).
Maintain Visibility Into the Operations of Your University
Colleges and universities are sprawling communities of students, faculty, and staff members. Contracts are similar in that there are countless agreements that are managed across different vendors. In fact, a National Association of Educational Procurement study of 42 higher-ed institutions found that the average spend on outside vendors is $70 million and that the average institution uses 1,230 different vendors.
Given this vastness of higher-ed operations, different departments within the same school may use the same vendor and not even realize. By centralizing contracts in one location, each user is on the same page regarding these agreements. CLM software allows institutions to create standardized contracts and processes for all departments, ensuring consistency and full visibility. This system will help identify any gaps or redundancies that are present in the contract management process across what may be very well 100+ departments and campuses within the same network.
This holistic view of contracts also opens new doors for financial efficiency. Higher-ed institutions can use contract analytics to reveal opportunities to streamline the vendor management process. Procurement and finance teams can collect contract data, create custom reports, and integrate with third-party business intelligence tools. For example, you can generate a report to see which contracts are expiring within the next six months, so you can renegotiate more favorable rates during the renewal process. By tapping into contract analytics and historical data, you’ll have a complete understanding of all vendor commitments to manage contract expiration dates and renewals more effectively.
Accelerate the CLM Process
The age of COVID-19 is forcing many institutions into a corner. In some cases, they’re even being forced to cut certain academic programs altogether. A Deloitte study emphasized how colleges and universities must seek more creative solutions to weather the storm during the coronavirus pandemic. One way the higher-ed industry can adapt in uncertain times and do so efficiently, is to explore ways to do more with less; that’s where an advanced CLM platform comes into play.
The average contract takes approximately 30 days to create, negotiate, and execute. That might not seem long on the surface, but any organization, regardless of industry, shouldn’t settle for the ‘status-quo’ when improvements are a click away. By using a centralized platform with standardized templates, your CLM process becomes more streamlined and efficient than your current system can ever dream of matching.
This level of efficiency will be imperative in the age of COVID-19 and beyond. As the healthcare industry races towards a vaccine, the operational improvements you make today will serve you into the future. As you innovate your contract management process, your competitive advantage will soar past less tech-savvy institutions that failed to evolve.
Future-Proof your Contract Management Process
The future may appear a bit cloudy for the higher-education market in the age of the coronavirus. However, one thing is clear: manual contract management processes and inefficient CLM software make it difficult to manage operating costs. Advanced contract management software will accelerate your CLM process across the board:
- Your procurement team will spend less time drafting and negotiating contracts, thus shortening the buying cycle. This will save your college or university time and money.
- Centralized data and standardized templates mean contracts can be created more quickly, again boosting efficiency.
- These productivity improvements deliver attractive financial benefits. On average, higher-ed institutions can leverage contract management software to identify savings between 2-6%.
If your current contract management process or platform has left you feeling unfulfilled, it’s time to change your CLM major. Your current system can’t keep you stuck; you have choices…just choose wisely, of course. By selecting CLM software that helps lower operating costs and deliver contract visibility, you’ll certainly make the CLM Dean’s list.
Interested to learn how IntelAgree can elevate your contract management process? Schedule a demo now to see our platform in action!