Debunking 5 Myths About Contract Database Software
Contract management is an essential task for most organizations. Don’t let common myths deter your organization from considering a solution that can save time and money, while reducing risk. Understanding how contract management software works helps you find the best solution for your contract management needs.
Myth 1: Contracts Won’t Be Secure in the Cloud
Security is a top concern when it comes to contracts. These documents may hold the most private, sensitive information of all. General counsel and administrators are often justifiably concerned about the security of a new system.
Look for cloud-based storage servers that are ISO 27001 certified (an information security specification that provides a model for risk management) and physically protected. You can also ask about a server’s compatibility with specific policies, like HIPAA, that apply to your organization.
Besides server security, a contract management system can offer multiple forms of user security. View-only access, controlled by an admin, disables printing. Watermarks reduce risk of unauthorized information sharing. Two-factor user identification and automatic logout after inactivity help ensure that only people who should be viewing sensitive information have access.
Myth 2: Implementing a New Contract Management System Will Take Too Much Time
One of the biggest obstacles to implementing a new contract management system is concern about transition time. No one wants to hold up productivity in a busy department.
While you can find contract management options that are complex and unwieldy, others make the user experience simple. Drag and drop uploading is quick and easy. An organized interface helps get new users up to speed in a matter of minutes. Transferring files and learning a new system can be a surprisingly painless process. Once the new system is in place, it will continue to save time by reducing or eliminating some common manual time-wasters (like hunting for a misfiled document).
Myth 3: Manual Processes Can Be Just as Effective
Many organizations are still relying on manual processes, updating spreadsheets and coordinating reviews according to a system created by hand. In some cases, an organization is able to maintain a manual system for a long time without major errors. It takes a lot of dedicated work, though. Switching to a software solution can free up time, without compromising quality. In fact, in many cases organizations see improvement in contract management. Contract management software often comes with special features and automation options that streamline processes and reduce the risk of error or oversight.
Myth 4: I’ll Have Less Control Over Contracts
The thought of automating contract management processes that used to be performed manually can bring on feelings of anxiety, rather than relief. Some administrators may have developed an appreciation for searching and reviewing contracts by hand.
Automating and streamlining doesn’t mean restricting your access to contracts. Quite the opposite: Features are meant to give you more control over contract management. An automated alert, for example, can remind you of a contract milestone that might have been forgotten. Customizable reports quickly pull up the information you need based on any data point you select. Contract management software should be a way to assist you, not replace your access to and control over contracts.
Myth 5: Contract Management Only Affects the Legal Department
Contract management can be a quiet process. If something goes wrong, of course, there could be a burst of activity to mitigate risk or fix a mistake. Most of the time, though, a lot of organizations “sign it and forget it” until the next contract review. That can lead some employees to assume that the only people who care about contracts are legal counsel.
Contracts have a big impact on the legal department, of course. But they also affect:
Accounts department (vendor contracts and other cost-saving opportunities)
PR department (media contracts)
Senior management (employee agreements, NDAs, contracts for new partners or prospective ventures)
IT department (contracts for equipment, services, data providers)
In fact, contracts impact employees in every part of the organization. Managing contracts effectively has the potential to provide significant ROI throughout the organization.