Contract Evolution
Contracts are important aspects of any business that spans across the operational and legal functions of the entity. Since time immemorial, contracts have been done manually making them very time–consuming and labor-intensive requiring a lot of time and resources. However, the digitization and automation of contracts have led to major business improvements. The contracting process has been harmonized and initial manual activities have been done away with leading to cycle time savings (Vaseekaran, 2018). Freeing up time and the alerts created from a single repository have led to the merging of the contract function with other major functions in a business such as account management.
How Acquisition has Changed
Contract management in companies is changing exponentially with major companies now using technology to handle data and in general management. Technological trends that have been very attractive to businesses are Radio-Frequency Identification Technology (RFID) and e-commerce. RFID is an emergent technology that is applied by businesses to track products and other business components as they move along the supply chain (Fennani et al., 2011) . The technology has been proven to help businesses carry out more effective business procedures, make better planning and strategy decisions, and in cost savings. Another emergent trend in businesses is e-commerce. Products and services are traded using computer networks such as the internet. Businesses then have to merge their business processes with their ICT systems to ensure seamless exchange and processing of data.
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How the Economy Might have an Impact on Contract Compliance
Changes in the economic environment will force parties to develop adaptive mechanisms in contractual responses. Improved economies will most likely lead to better contractual compliance while a decline leads to more business disagreements caused by parties’ failure to meet contractual obligations (Thomas, 2009) . Poor economic status of a country stalls government operations making it difficult for them to make prompt payments. Small businesses are most likely to experience cost overruns and bankruptcy due to delayed payments.
References
Fennani, B., Hamam, H., & Dahmane, A. (2011). RFID overview. ICM 2011 Proceeding. doi: 10.1109/icm.2011.6177411
Thomas, J. (2009). 5 best practices toward contract compliance. Retrieved 23 December 2020, from https://www.industryweek.com/leadership/companies-executives/article/21933292/5-best-practices-toward-contract-compliance
Vaseekaran, A. (2018). The critical and evolving role of contract management in digital transformations. Retrieved 23 December 2020, from https://www.digitalistmag.com/finance/2018/01/16/critical-evolving-role-of-contract-management-in-digital-transformations-05754529/
