Contract management is a crucial initiative for organizations of all shapes and sizes. It becomes increasingly important as companies expand and the volume of contracts in question increases dramatically as well.
It is a discipline that supports commercial management with areas like negotiation, preparation, implementation, and oversight of legally enforceable commitments. This involves active monitoring of outcomes and performance needs, informing commercial management with regard to what’s required, and potential financial impact including risk.
It is a complex field, one which can be addressed effectively with contract management software. This is a useful way of managing contract lifecycles to improve productivity and communication.
Another effect is time frees up for staff to focus on important duties. With this being said, how exactly should you use software to manage contract lifecycles and why is it so important to do so?
Simplifying Contract Management Processes
Some software options might be complicated to learn, but once you get the hang of things the effort you’ve invested will have been well worth it. In reality, you won’t lose much time learning a new contract management system, and even when you do, that time lost will definitely be made up with the time you save in the long run.
Additionally, without a formal procedure applied organization-wide, different departments can end up developing their own approaches. Without a clearly established procedure for contract management, confusion can spread alongside a lack of clear direction.
By using software for contract management, you’ll define a shared system where everyone is on the same page. This can be executed via a user-friendly interface with clear procedures. Most employees will be able to operate the new system within no time, as you eliminate mistakes by automating and standardizing as much as possible.
To Prevent Missing Negotiation Opportunities
With a contract management system, you’ll identify more revenue opportunities. You’ll also appreciate ways you can spend money more effectively, especially around the time of contract renewal.
You can receive alerts when contracts are expiring, giving you ample opportunity to either trigger auto-renewal or moreover work out a new and improved deal. At the point of contract reviews, you can more easily identify redundant and under-performing contracts.
Contract management software can be leveraged as a method for preparing a stronger negotiation base to develop further opportunities.
Balancing Efficiency and Risk Management
Departments are often at conflict when there are different goals to consider. However, with contract management software, you can balance multiple priorities. For example, storing files in a secure cloud system with two-factor authentication, while linking compliance protocol documents and contracts, helps legal departments feel confident about risk management.
This will also enable sales departments to close deals quickly, without restriction, as files are shared with streamlined signing and electronic signatures to keep contract negotiations moving forward.
Making Searching Easier
Software is designed to organize contracts, where you can access critical data at the click of a button. This is certainly an improvement from sifting through vast swathes of paper contracts, or even from a document management system which feels somewhat limited in comparison.
You can easily tag contracts when files are uploaded, alongside using certain search parameters to ensure files are marked properly. Accessing the files you need is really that simple, where users can conduct either basic or more advanced searches to discover information needed for future reference.
Search results can be saved to avoid repetition, alongside allocating search results in ways DIY systems fail to. In other words, you can easily locate the information you need and arrange it in logical ways.
Managing contract lifecycles can become overwhelming, especially in situations where businesses have an unwieldy number of contracts on the books. In those instances, it is imperative to use contract management software efficiently. This will eliminate potential time sinks and generate more revenue for your company in the long run.