Smart Contract Management in SAP: How to Recognize a Best-in-Class Solution

Read here how you can benefit from the comprehensive, company-wide digitalization of contract management and what you need to look out for when selecting a suitable solution if you work with SAP in your organization.

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SAP enables you to digitalize almost all tasks in your company in an incredibly efficient manner. Nevertheless, company-wide management of contracts has long been a weak point in the ERP system of the German market leader for business software. This certainly boils down to the fact that contract management is generally one of the last areas to be considered when it comes to digitalizing business processes in many companies.

However, this doesn’t have to remain the case. After all, there have long been holistic solutions that make contract management in SAP both efficient and user-friendly. In this blog post, you’ll discover how you can benefit from comprehensive, company-wide digitalization of contract management and what you need to look out for when selecting a suitable solution if you work with SAP in your organization.

Contract Lifecycle Management as a Holistic Approach

Whether it’s your procurement, sales or HR department – contracts form the basis for pretty much every business process. Although the content and parties involved in each type of contract can differ greatly in some cases, the workflow that each contract goes through is essentially always the same: beginning with the initial draft of the contract and negotiation with subsequent corrections right through to obtaining signatures and finally archiving it according to certain legal, compliance and other regulations.

Smart Contract Lifecycle Management (CLM) starts at this point by giving contract processing a uniform structure throughout a company. For this purpose, the entire contract management of an organization is centralized in one function, from which the individual steps of the workflow can be initiated, coordinated and tracked. This creates maximum user friendliness, transparency and control of the entire contract management process.

Contract Lifecycle Management in SAP®

Digital contract management automates all aspects of the contract lifecycle. The goal: Gain control while reducing operating costs. Learn how it works.

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The Most Important Requirements for Holistic Contract Management in SAP

For many years, SAP and other third-party providers have primarily sought to digitalize the contract management of individual application and business areas, e.g. with a focus on procurement. For instance, SAP modules such as Material Management (MM) or Real Estate Management (RE-FX) still only support contracts that are linked to that respective area.

Although this approach does allow for departmental improvements in contract management, it is not a satisfactory solution for companies seeking to achieve consistent control of contract management throughout their entire organization.

From a corporate strategy perspective, a holistic solution for contract management in SAP has four tasks:

  • First of all, contract management for all departments in the company must be centralized in one virtual location using software.
  • Secondly, contract lifecycle management must be able to be seamlessly integrated into the existing SAP systems.
  • Thirdy, contract management must adapt to users’ real-world work routines.
  • Fourthly, all processes relating to the lifecycle of contracts must be converted into standardized workflows – which in turn are controlled from one application, have a user-friendly structure and cover all the necessary functions.

To accomplish these tasks, you have to embed a workflow-supported solution for contract management in SAP as deeply as possible into the infrastructure of the existing SAP system across departments – so that your leading ERP system continues to be the single source/point of truth.

Single Point of Truth: All Your Data in One Place

Consistent data is one of the most vital foundations for the end-to-end digitization of business processes without media disruptions. To achieve this goal, all data-handling software applications in a company must exchange their data via the same platform. After all, this is the only way to eliminate the possibility of incorrect, redundant or contradictory data being processed within a company and of media disruptions happening when information is exchanged, which in turn are a potential source of error and diminish process efficiency.

To ensure that this basic prerequisite for clean data management is met, all systems in a company should follow the “single source of truth” approach. In other words, all programs working with data should only have one source of truth and exchange their information via an interface with this one central data platform.

This is particularly important in contract management, where numerous master data such as the addresses of business partners, customers and suppliers is stored in the system. If this data is updated in a business process outside of contract management, e.g. because an employee in procurement updated the address of a supplier – this change must be stored consistently in the system so that it can be output correctly when the new supplier contract is automatically created.

Perfect Integration: Contract Management as a SAP-Based End-to-End Solution

Having a single point of truth is a must if you want to enjoy seamless contract management in SAP. However, clean data management alone does not guarantee best-in-class contract lifecycle management in SAP. This is because holistic contract management can be integrated much more deeply in SAP: as a SAP-based and SAP-certified end-to-end solution. We recommend you keep this in mind when selecting potential solutions. SAP certification proves that the technology will integrate seamlessly with SAP solutions, enabling you to have total confidence in your investment.

For users, this means they remain in their familiar SAP environment during contract lifecycle management:

  • All elements of the CLM software work within the SAP Fiori user interface.
  • Role and rights management can be planned for all workflows with the SAP permissions system.
  • Users can access the software on mobile devices throughout the company.
  • Implementation of the software isn’t dependent on the type of SAP installation – whether on-premise, cloud or hybrid.

This approach enables a seamless user experience in your organization right from the outset, as the new software is 100% compliant with SAP’s already internalized design and usability specifications: users remain in the familiar SAP universe. This is a major benefit, especially in contract management, because it means very different groups of people across departments can use the software.

One Tool for All Tasks: easy Contract for SAP

The perfect example of best-in-class software for holistic contract lifecycle management is easy contract for SAP. The modular add-on not only supports all contract types across your company, adopts the single point of truth approach and functions as a SAP-certified end-to-end solution. It also guides users through the entire CLM workflow with a number of user-friendly features and functions.

easy contract for SAP supports the intelligent digitalization of contract management through:

  • A granular permission model that allows responsibilities and access rights to be clearly regulated from the legal department right through to the relevant specialist departments.
  • The provision of uniform templates and text modules for the entire company.
  • The mapping of the company’s organizational units (e.g. departments) based on SAP® Organizational Management.
  • Optimal usability through the linking of SAP business objects with contract content, so that SAP objects can be accessed from the contract with a single mouse click.
  • Configuration of contract groups that can be integrated directly into SAP Launchpad as tiles using SAP Fiori.
  • Audit-proof storage of all contracts in a digital archive.
  • Convenient search options via keywording of contracts and – if SAP TREX is supported – full text search across the entire contract portfolio or in selected areas.
  • A clear deadline calendar that can automatically send out reminders to selected individuals to improve escalation management.

A guide to introducing a digital contract management solution

In this guide, you’ll discover how to establish digital contract management software in your company after you’ve opted for a solution.

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