Does Your Current Contract Management Process Really Work?

Managing a contract portfolio without the right tools can make this already complicated process far more cumbersome than necessary. Old-school contract management methods involving massive amounts of printing and crammed filing cabinets was the way of the rather distant past, although there are no doubt still a few holdouts. Of course, there are other seemingly modern, electronic management methods companies have relied upon, which have also fallen out of favor, such as shared network drives or lengthy spreadsheets. These days, the only contract management practice that actually works requires the use of sophisticated software that has the right combination of practical features. If your company’s contract management practice does not afford you the following, then it may be time for a change.

Implement, Organize, Utilize

An efficient contract lifecycle management system should take minimal time to set up and begin using. It is crucial to employ an online solution that has a simple interface and just enough features to keep things organized and running smoothly. In some cases, CLM software providers attempt to impress existing and prospective customers with an array of fancy features, many of which are simply too overwhelming to figure out, and in some cases, are utterly superfluous.

Companies ready to transition to a cloud-based contract management solution, or those already using an online system that just isn’t cutting it, should look for software that can be implemented and utilized immediately. There is no reason for companies to endure excessively long file uploads, hours of learning the new system, or days of trying to get things organized. With the right solution, uploads should take mere minutes and a drag and drop filing system should allow for essentially instantaneous organization, so that managing the portfolio can continue without delay or interruption.

Maximize Security

One of the key advantages to implementing a cloud-based contract management system is that data is more likely to be secure. A reputable online solution will offer stringent security measures, including advanced encryption, two-factor authentication procedures, and certified data centers where the primary servers reside. For most companies, the contracting process likely involves consultation with employees and staff who may be working in offices around the country or even the world, as well as external professionals.

It is downright foolish to think that it is safe to attach a document to an email, particularly contracts that contain valuable and/or confidential data. With the right contract management database, contracts can be safely and securely uploaded, shared, and reviewed, and only authorized personnel should be allowed to access the contract repository and view these important documents within the established system.

Gain and Maintain Control

A common problem with contract management is that there is often poor contract visibility, and a lack of control will inevitably lead to contract compliance and performance problems. Without a centralized contract management system in place, documents are often scattered across computers or systems. Some items may actually cease to exist physically, electronically, or in both forms, leaving those needing to review a particular document scrambling to find a backup version, if that is even possible. Maintaining control over the contract management workflow becomes increasingly difficult as a company adds to its portfolio, and a disjointed contract management process only exacerbates the likelihood of an implosion.

Fortunately, with a cloud-based CLM software, companies can institute a centralized contract repository, ensuring that all contracts and any pertinent documents are located in a secure yet easy to access place. This kind of consolidation enhances contract visibility and allows the contract management team to both gain and maintain consistent control over the contracting lifecycle and the management process.

Minimize Risk

Contracts are legally binding instruments and as such they are inherently risky. There are always going to be some unavoidable risks associated with entering into these sorts of agreements, but some of the risks can be mitigated with the right oversight. To achieve this, it is important to understand where every contract within the portfolio stands at all times. This may seem like an impossible feat, but it can actually be done with contract management software that has a reporting feature. Specifically, companies can keep track of important dates, action items, or other important matters by creating a report based on the relevant contract parameters. This helps avoid missed deadlines, breaches of contract, costly penalties, and  reputational damages.

Because contract management software ensures that a company remains organized, has direct control over its contracts at all times, and is able to monitor who accesses the contract database, it is far less likely for things to go awry.