No one likes overpaying. As a procurement professional, your job is to secure the best deal for your company. Negotiating contracts is just the beginning. Ensuring compliance is where the real work begins—and where most organizations lose control.
There is a lot at stake when you consider an average of 9.2% of annual revenue is lost due to contract mismanagement.
How can you ensure that vendors stick to the agreed-upon terms and conditions? Automated tools like myTrack can make this process seamless by ensuring compliance, minimizing errors, and enhancing efficiency across procurement operations.
The Challenges of Manual Contract Enforcement
You spend countless hours negotiating the best possible terms, conditions, and rates with vendors. It’s reasonable to expect those agreements to be upheld. Yet, manual processes often fall short, making full compliance unrealistic. Issues include:
- Lack of Awareness: Workers on the ground often aren’t familiar with contract terms, resulting in deviations that increase costs.
- Administrative Burden: Manually tracking compliance is time-intensive, leaving your company vulnerable to overspending and errors.
- Delayed Insights: Vendor audits help identify compliance gaps, but manual processes are slow. Problems discovered late cost your company more in delays and corrections
Limited visibility into purchase orders (POs) and their statuses only compounds the issue. Without clarity on funding or burn rates, managing budgets and avoiding unexpected costs becomes an uphill battle.
As a result, 65% of projects either fail or under-perform, with a cost overrun of 80%, according to the World Commerce and Contracting (WCC).
The Risks of Non-Compliance
Non-compliance risks go beyond financial overspending. The consequences of contract non-compliance include:
- Legal and Regulatory Issues: A contract that omits critical details—such as apprenticeship ratios or licensing requirements—can lead to legal penalties or project delays if audited.
- Workforce Composition Challenges: A mismatch in skill levels (e.g., sending Level 1 electricians instead of Level 2) might violate agreements, slow progress, and inflate costs.
- Operational Inefficiency: Inaccuracies in agreements can ripple into workforce productivity, budgeting, and vendor relationships.
Addressing these risks with outdated manual processes is a recipe for inefficiency and missed opportunities.
The Case for Automating Contractual Enforcement
Automating contractual enforcement brings clarity, consistency, and control to procurement operations, including:
- Streamlined Agreements: Automation ensures standardized contract templates that align with industry best practices. Consistency reduces discrepancies, enhances negotiations, and improves procurement efficiency.
- Accurate Enforcement: Rather than relying on vendors to invoice correctly, automation flips the script. myTrack enables you to dictate earned charges based on contractual terms, leaving less room for disputes.
- Real-Time Insights: Automated tools like myTrack provide live visibility into vendor performance, POs, and contract adherence. This empowers teams to catch and address issues early, avoiding costly delays.
For example, by automating rate enforcement, myTrack ensures the most economical rate is applied for equipment usage or labor costs. This transparency allows you to monitor costs in real-time, not months after the fact.
How myTrack Automates Contract Enforcement
Management Control (MCi)’s myTrack software transforms procurement by standardizing agreements and automating the enforcement of contracts to negotiate terms, conditions, and rates that deliver the best value. It ensures all necessary areas are covered, keeping your agreements accurate and effective while promoting compliance with procurement processes through bid document requirements.
myTrack simplifies rate comparisons by breaking down costs and removing unnecessary add-ons like overhead, fuel, and safety equipment, allowing for meaningful comparisons between contractors and sites. This transparency empowers your procurement team to achieve greater cost control and make data-driven decisions.
Field supervisors often lack access to contracts, making compliance difficult. myTrack automates the entire spending process—from PO creation to invoice validation—using pay formulas to enforce contractual terms related to costs. This ensures vendor charges align with agreed-upon rates and conditions, enabling field supervisors to focus on execution rather than administration.
With real-time dashboards, myTrack provides visibility into vendor compliance, labor ratios, skill levels, and usage terms, empowering teams to proactively manage contracts and address potential issues before they escalate. This seamless process helps your procurement team maintain control, optimize spending, and build stronger vendor relationships.
Delivering Real-World Results
Automated contract enforcement isn't just theoretical—it delivers measurable savings. Here are two examples:
- A Procurement Manager at a leading North American steel manufacturer reduced labor costs by 5-8% and equipment expenses by 18% after automating their processes with myTrack.
- A Maintenance Manager at a chemical company achieved 95% cost certainty, uncovered 15% overbilling on equipment, and corrected prior errors that had inflated costs by 25%.
These organizations not only gained financial control but also improved their operational efficiency and vendor relationships.
Take Control with myTrack
You sweat the details and put significant effort into negotiating contracts to protect your company’s bottom line. myTrack ensures those efforts pay off by automating compliance, reducing risk, and enhancing vendor accountability.
With real-time insights, streamlined processes, and robust enforcement, myTrack empowers procurement teams to manage contracts effectively while saving time and money.
With myTrack, you have the information you need throughout the process to optimize contracts and ensure enforcement.
Schedule a meeting today to learn how myTrack can optimize your procurement operations, improve compliance, and maximize efficiency.
