Indian and international corporates can cut costs by streamlining the management of contractual relationships with their key vendors, argues Rahul Shah of Infosys
In these testing times, it is imperative for international corporations to gain and maintain clear oversight and control of their contracts and commitments. Senior managers need to understand the intrinsic risks facing their businesses, including the considerable risks that arise from relationships with strategic partners and third party vendors.
Effective contract management procedures should be established and followed systematically in order to meet these important goals. For example, existing paper contracts should be converted into electronic form, enabling key parameters (such as counterparty, expiration date, value, indemnities, limitation of liability and products) to be abstracted and tagged in a globally searchable database. This, in turn, allows alerts and reminders to be set for key terms and conditions that occur in all of the company’s contracts, enabling it to maintain an instant, up-to-date and consolidated view of its risk exposure and obligations across contract types, regions and services.
Rahul Shah heads the Centre of Excellence at Infosys, which creates proactive solutions for clients. Shah also leads the pre-sales team for the knowledge services business at Infosys BPO. The co-author of this article is Poonam Vasudeva, operations head of Infosys Legal Services.