A frequent remark we hear from managers and counsel overseeing contract management is, “We know we need a better system, but this isn’t the right time.” The fact is, a poor system is often to blame for consuming too much of a department’s time.
Where Contract Management Fails
Let’s review what some of the outdated practices are. Contracts often end up pushed to the back burner, especially after initial signing. Many companies that use cutting-edge software systems for other aspects of operation may still use very old-fashioned methods to deal with contracts. A physical filing cabinet is one example. Its digital equivalent, a computer folder crammed with documents and PDFs, is another. It’s unintuitive or even impossible to synchronize updates across multiple departments. There’s no clear sense of who’s responsible for managing which contracts and no easy way to compare accounts within a category.
Some companies use a cobbled-together system of spreadsheets and files on a shared drive in an attempt to imitate a more structured CLM system. It’s a nod in the right direction because information is easier to share (although if it’s only shared within one department, there are still significant access problems). All too often, important work still falls through the cracks. Here’s how a CLM solution transforms contract management.
Gain Control of the Paper Trail
Sorting a thousand contracts is understandably overwhelming. The good news is that a CLM solution doesn’t need to be complicated to be effective. In fact, it’s often better when a relatively simple, intuitive system makes it easy for employees to transition quickly. A few features that tackle the biggest pain points can feel as useful as having an extra assistant dedicated to contract management.
Use reports to quickly gather and compare contracts. Returning to saved reports and searches can make preparing for a productive meeting a matter of minutes. Audit logs can be a helpful internal tool to check whether an employee has viewed a document or if there may be miscommunication that needs to be addressed.
Simplify Workload with Controlled Delegation
In many outdated solutions, contracts are scattered between various drives and folders. There isn’t an organized way to track who is handling which contract accounts. As a result, managers may end up trying to do everything themselves. A CLM system allows the contract management team to establish clear workflows and assign particular accounts to employees.
For delegation to work effectively and securely, managers need control over employee access. ContractWorks offers secure two-factor authentication and a variety of access levels. Managers can feel more confident that employees are only working with files they’re authorized to see.
Catch Opportunities and Reduce Risk
Managing risk is one of the biggest problems keeping managers up at night. Contract management can be a lot like driving down a highway at night. Even though the road seems straightforward and obstacle-free, there are constant minor steering adjustments that need to get made. Being “asleep at the wheel” essentially guarantees a crash.
Automatic reminders are one of the simplest ways to minimize risk. Set up reminders in advance of important contract milestones, and you have more leeway to go on “autopilot” without incurring problems.
Reports are another important tool to catch risks and opportunities. Setting up a custom tag for contracts subject to a particular compliance regulation helps managers apply updates to all pertinent contracts. Reviewing batches of contract by type or deadline can make it easier to spot lucrative negotiation opportunities or cancel outdated contracts. Old-fashioned practices can’t respond as easily to an organization’s needs, resulting in missed opportunities.