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5 Ways to Help Your Company Adopt Vendor Contract Management Software

     
vendor contract management

Ready to adopt vendor contract management software in 2018, but unsure how to navigate a smooth transition throughout your organization? Let us outline some strategies to take advantage of employees’ strengths and set your new system up for success.

Involve Internal IT

Security is a paramount concern when it comes to contract management. These documents can contain some of the company’s most critical proprietary information. What’s more, they also include private information about vendors, clients, and business partners. A security failure can put multiple organizations’ confidential information at risk, and it can even leave your organization liable for severe penalties. For this reason, company executives may be wary of adopting a new electronic contract management system.

The best way to address this issue is by bringing it to the experts. It’s unfortunately true that not all contract management software is created equal. While you’re still evaluating options, bring in a representative from your company’s internal IT department. An IT professional will have a better understanding of what questions to ask to determine the data security structure, and will be better positioned to assess whether the software can maintain appropriate standards to protect confidential information.

Process Materials Carefully

Contracts are complex, often involving ancillary materials besides the main contract agreement. Implementing vendor contract management software entails cataloguing and uploading the following:

  • NDAs
  • Contract templates
  • Addendum materials
  • Invoices
  • Order forms
  • Archived records
  • And more

The managers or other employees who will handle contract lifecycle management should collaborate with general counsel to determine which files are current and which archived files must be kept (and for how long). It may be necessary to update and approve contracts before they can be added to the system. Once documents are approved, administrative employees can take over scanning and uploading documents.

Uploading contracts along with their supporting documents improves workflow from the beginning. Including related materials means that a user can stay within the system while working on a project, instead of having to switch between the contract management software and the old document storage method to access files. 

Establish Style Guides

Setting up appropriate naming and tagging conventions improves searchability as you use the contract management software. An effective software system shortens search time and makes it easier to generate reports to analyze performance. 

Designate a system administrator who will draft file naming and tagging requirements. The style guide can serve as a reference tool in the user interface so that all users can follow consistent processes. Implementing a standard organization method improves communication between departments or branches, since users will not have to memorize another department’s methods. This may also improve project management procedures and reduce unnecessary “clarification” emails that can slow down a workday.

One way to implement consistent style is to set up a tag template. This will prompt users to assign tags in the same fields for each new file in a particular category. Admins can opt to make some fields required to avoid insufficient tagging. The general style guide can include notes on best practices for creating and following tag templates.

Implement Organization-Wide Access

A significant benefit of choosing electronic vendor contract management software is centralized access. A cloud-based system lets authorized users throughout the organization locate the most up-to-date version of a file in minutes, rather than hours or longer. This change reduces wasted employee hours, improves productivity, and may streamline communication. Employees don’t need to email colleagues for help locating and sending files; instead, they can jump right into addressing necessary updates or action items.

They can accomplish this goal, that is, if their colleagues in other departments share the same ready access to the files. In previous posts, we’ve discussed the benefit of uploading contracts and similar files in stages, so as not to create an overwhelming workload. Adding users to the system, however, works best with as many employees as possible. A vendor contract involves employees from various departments. Finance officers compare costs against their planned budget, project managers review production milestones, legal counsel ensure that compliance measures are met, and executives evaluate how the vendor’s performance aligns with overall business strategy.

Create KPIs

It’s hard to determine if new contract management software is worth the investment without setting a benchmark first. Companies have any number of reasons for adopting a new system, such as saving costs or shortening work process timelines. Executives may want to share their top priorities for improvement. 

Once goals are set, it’s critical to assign managers and conduct regular reviews of the contract management software. Automating as many processes as possible lets users perform effective management without spending excessive amounts of time chasing contracts. 

Clear KPIs also inform who is the best fit to monitor contract performance. An organization primarily concerned with budget will naturally solicit more insight from financial officers. System administrators in this case may concentrate more on generating budget reports. Other companies may seek to ramp up numbers of completed projects, or handle a merger or acquisition scenario smoothly. Whatever your organization’s top priority is, determine which departments are best suited to analyze reports and suggest ways to continue to refine and improve contract management processes.

 

Download How to Use KPIs for Successful Contract Management