A Data Analytical Approach
Does your company supply to governments, major retail chains, multi-national corporations or other entities under a contract with a Most-Favoured-Customer clause or other unique or complex pricing provisions? Or perhaps your company is party to a contract where payment is based on another metric, such as revenues or production, that is self-reported, for example, a royalty contract. In these cases and many others, your company should consider managing the risk that both parties to a contract are not upholding their end of the bargain – whether intentionally or not. Non-compliance can lead to lost profits and damaged counterparty relationships, among other negative impacts. Monitoring compliance through data analytics can be a cost effective way of doing just that. Despite the potential for "hidden value" to be realized, in our experience, many organizations have not implemented effective monitoring mechanisms.
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