Improving Contract Compliance in Procurement

Before diving deep into metrics and audits, it’s imperative to ensure the basic accessibility of contracts. Can users readily locate and reference them? Are they able to seamlessly generate purchase orders based on these contracts? Addressing such fundamental questions is pivotal to the effectiveness of the compliance initiative.

Rigorous reporting should be the next step, segmenting by company-wide metrics, business units, departments, and even individual users. Ensuring contract compliance becomes a central discussion point in communications helps foster an environment of accountability.

For a touch of dynamism in your upcoming business review, consider showcasing a list of the “Top 10 Departments Lagging in Contract Compliance.” Add a twist by presenting the department heads’ photos alongside their respective rankings. Not only does this approach invariably instigate dialogue, but it also, quite often, spurs a competitive spirit among departments. The aim is to descend from the list, indicating improved compliance.

While this might seem audacious, it has been executed in the past. In some organizations, this competitive approach yielded positive results, driving departments to elevate their compliance game. However, it’s essential to strike a balance. While the format engages, the underlying message—of maintaining contract integrity—should always be at the forefront.

See our top 20 free advice for rapidly reducing supplier costs