The healthcare sector is one of the most heavily regulated in Australia. Maintaining compliance with procurement regulations can be challenging, and procurement leaders increasingly turn to digitisation to meet these ever-changing requirements.
Contract lifecycle management (CLM), or the end-to-end process of overseeing supplier contracts, is critical to efficiently running healthcare organisations. Digitisation has revolutionised CLM allowing for greater automation, visibility and efficiency.
There are three main ways digitisation can overcome common healthcare procurement challenges:
How to tell if your healthcare enterprise needs digitisation
If any of these common issues sound familiar, then your enterprise could likely benefit from digitisation:
- Trouble keeping up with contract and procurement obligations
- Difficulty managing contractor risks
- Inefficient or outdated manual processes
- Inconsistent CLM across different locations or departments
- Difficulty keeping up with ever-changing healthcare contract management regulations and certifications
- Recurring compliance issues from suppliers and contractors
How Digitising Contract Management Can Help
Digitising your contract management can eliminate inefficiencies and turn your procurement practices into value-adding business processes. Here’s how.
#1. Trouble keeping up with contract and procurement obligations
Problem: Contracts and procurement activities are managed in an ad hoc way with disjointed processes between different locations or departments. Errors are common, best practices aren’t followed, and issues often slip through the cracks.
Solution: Centralised procurement platform
NSW Health implemented a centralised procurement and contract management platform which allowed for departmental segregation and tiered security levels. This meant that every level of the organisation could use the same procurement processes, gain greater visibility over contracts and ensure obligation milestones were met.
#2. Difficulty managing individual contractor risks
Problem: Difficulty identifying, mitigating and managing different contractor risks.
Solution: Greater visibility over contractor compliance data. Digitising your contract management allows you to instantly assess risks and make better-informed decisions by enabling you to view supplier data in real-time. It can show what compliances have and haven’t been met by the supplier and predict any future risks the supplier or contractor may pose.
#3. Inefficient or outdated manual processes
Problem: Manual processes such as hard copy contracts, spreadsheets, forms and other outmoded tools take up valuable time and often allow crucial information to be lost.
Solution: Cloud-based contract management. Implementing online contract management creates a single source of truth for all stakeholders, with all documents and milestones tracked in a centralised platform.
#4. Inconsistent CLM across different locations or departments
Problem: There are no agreed-upon CLM processes and procedures, or the correct processes and procedures aren’t consistently followed across all departments and/or locations. Best practices aren’t followed by all procurement team members, leading to compliance issues and errors.
Solution: Developing and enforcing organisation-wide contract management processes. Implementing a digital contract management system which includes workflows for all procurement policies, procedures and processes ensures all departments and locations are working to the same standards.
For NSW Health, having disparate tools and processes in place across the organisation was causing an inability to monitor adherence to best practices, and things often slipped through the cracks. They now use a comprehensive, centralised contract register across all of NSW, giving unparalleled visibility into commitments, performance and contract spend across all 21 semi-autonomous pillars and local health districts.
#5. Difficulty keeping up with ever-changing healthcare contract management regulations and certifications
Problem: Not being able to prove to auditors or certifiers that your organisation meets all procurement regulations.
Solution: Advanced analytical and data visualisation capabilities. Greater visibility on contractor and compliance data through advanced analytics and contract management means the evidence you need to prove compliance is readily available.
NSW Health weren’t able to achieve certification to the NSW Goods & Service Accreditations review due to a lack of data. By implementing digital contract management, they achieved a level 3B in the NSW Goods & Services Accreditation, the second highest status achievable, representing a state of high maturity in their procurement and contract management.
#6. Recurring compliance issues from suppliers and contractors
Problem: A lack of transparency across contracts and supplier risks, leading to compliance issues. Suppliers are engaged out of contract, leading to potential legal issues with no resource to take action against contractors who don’t fulfill their obligations.
Solution: Contract and supplier management software. Greater visibility over compliance activities ensures compliance issues are predicted and avoided.
NSW Health gained transparency over all procurement, contract and supplier activity with the help of digital contract management software, gaining all information needed to not only avoid future supplier compliance issues but also to make strategic procurement decisions across the organisation.
Contract management maturity & digitisation
Contract lifecycle management maturity measures your organisation’s ability to manage the entire contract lifecycle from procurement to onboarding, milestone management, offboarding and more.
- Ad Hoc -Lack of integration between departments, inadequate acquisition planning, insufficient supplier engagement, and limited stakeholder involvement.
- Basic – Somewhat centralised management and planned integration are in place, but there is a lack of consistency across processes and cumbersome paper-based contracts remain in use.
- Structured – Senior management endorse and actively support the CLM process and framework and enforceable, institutionalised standards are in place.
- Integrated & optimised – Contract lifecycle management is integrated with ERP systems, creating a streamlined procurement process and delivering greater efficiency. Contract management is an essential skill which must be continually refined to achieve optimal results.
Use this guide to identify your organisation’s contract lifecycle management maturity.
Digitisation’s role in advancing CLM maturity
Digitisation is the key to taking your organisation’s CLM maturity from its current state to fully integrated and optimised. One of the main challenges for many healthcare organisations is having dozens or even hundreds of disparate locations and departments, all with different processes used – digitisation allows all locations to use the same processes and software.
Digitisation advances CLM maturity by:
- Automating repetitive manual tasks
- Eliminating the need for paper contracts
- Enabling consistent contracting and procurement processes throughout the organisation
- Providing visibility and data across the procurement lifecycle
Fully matured CLM maturity provides visibility, control, automation and integration, making procurement a value-adding process, streamlining your procurement lifecycle and boosting efficiency.
The Bottom Line: The benefits of digitisation in healthcare contract management
Streamlined administrative workflows freeing up more time for value-adding procurement activities.
Improved visibility and transparency allowing for greater control over procurement activities and the ability to make smarter, easier business decisions.
Automation of compliance, auditing and reporting requirements saving hours of manual analysis and labour.
Get started today
Custom integrated procurement management software could be the magic bullet your healthcare organisation needs to overcome its contract management obstacles. At Portt, we’ve helped some of Australia and New Zealand’s busiest healthcare enterprises to streamline their procurement and make smarter business decisions. We’d love to help you too.