Cloud, standardization, integration: A digital future for contracting in rail procurement teams today
Simple. Intelligent. Compliant.
These are the terms often used to describe some of today’s leading contract management solutions, or CLM platforms. Characterized by role-based access, cloud storage, an intuitive interface, and quick contract storage and locating, contract management solutions are increasingly becoming must-have for enterprises in the transportation sector.
But, unfortunately, the same descriptions do not apply to the realities of contract management for procurement teams in the transportation industry.
An assessment of the current state of contract management for procurement
An honest look at procurement in rail companies today reveals that the contracting process is anything but easy. Limited visibility into procurement events like proposals and bids add up. Not only does potential risk increase, but compliant contract management processes become more difficult. Teams navigate a maze of requirements for vendor qualifications, eligibility, and onboarding and rely on legal teams to factor these in while writing up contracts.
Procurement team’s manage relationships with suppliers and vendors across railcar repair and leasing, real estate lease procurements, locomotive rentals and maintenance, and raw materials. Professionals on both the buy-side are tasked with maximizing business as they quickly and compliantly procure required assets. But without analytics-driven insights or contract performance analysis, you’re running off of little information to negotiate better deals with suppliers.
Case in point: Changes in pricing
The reality of the market today is that changes happen; there is some level of volatility that is unavoidable. Commercial factors critical to business growth may change, like fuel prices. Prices may be determined at negotiations but original contracts are unable to be located to verify the agreed-upon price when invoices need to be raised. You may agree to lease a number of railcars at a particular price per car, but at the end of the day, you end up paying two-times the price per railcar. Of course, you want to secure the best deal possible for your company, but procurement is at a loss to assess these changing, external factors and factor them in real-time into a contract. One primary reason for this is a lack of integration between procurement systems and other systems like price masters.
Rewriting the story with contract standardization for rail
The best-fit contract management solution that’ll solve for these challenges is not only simple, smart, and intelligent. It’s also configured and customized for rail specifically.
Contract standardization is one component of this. Pre-approved contract templates customized for customer agreements, vendor contracts, and service agreements speed up your contracting process from the very beginning, helping you quickly create contracts. For example, you could have standardized templates for locomotive and equipment leasing and maintenance, or for fuel agreements.
With thousands of contracts on your hands, how can you possibly find a simple way to track contract expiries, warranties, and payment schedules? The answer is actually simpler than it seems: configurable alerts and notifications that proactively alert you to risks by automatically tracking commitments for you. You can configure these alerts for:
- Lease renewals
- Equipment warranties expiries
- Payment schedules
- Contract modification
In a nutshell: What cloud-based contract management can do for you
Here at CloudMoyo, we brought our years of experience partnering with railroads in their digitalization journey with 10+ years of expertise in implementing cloud-based contract management software. Working with leading providers like Icertis, we’ve seen first-hand what a transformative change cloud-based contracting can make across industries – including the transportation sector.
CloudMoyo Rail Contract Management (CRCM) provides an intuitive, easy-to-use, and adopt platform to digitally transform contractual relationships with your suppliers and other pertinent bodies. CRCM comes enhanced with priority apps built specifically for railroads, and provides functional configurations for departments such as procurement to drive outcomes like:
- Standardized and compliant procurement processes
- Deep visibility into procurement processes like bids, proposals, and vendor onboarding
- Reduce procurement risks with insights into vendor performance and track records
- Manage renewals and payment obligations for land, track, and equipment
How can we help you make contract management simple, smart, and comprehensive at your railroad? We’d love to have a conversation. you can reach us here to get in touch with our rail experts.