Contract Management Software: Things to Watch Out For & Avoid
Contract Management Software
From employment agreements to customer and vendor contracts, businesses typically have a variety of types of agreements within their portfolios, which can have direct and indirect effects on the bottom line. And while service contracts – those with suppliers who provide business-related services such as internet and maintenance – may not have a direct line to company revenues, your ability to manage these contracts appropriately can affect overall performance.
Across the board, contract management software can improve efficiencies and resolve problems that are common throughout the contract lifecycle. Service contract software can similarly improve your ability to maximize the value of your service contracts and help you to mitigate issues that may arise over the course of your contracts with suppliers – but only if the software does what you need it to. Conversely, software that doesn’t meet the specific needs of service contract management can increase your challenges.
Here are three important things to watch out for and avoid as you select service contract software.
1. Service contract software that limits storage
From building maintenance providers (sometimes multiplied across branches and locations) to internet services to different SaaS providers across departments and teams, large companies typically have lots of different service providers, each with its own contract. Furthermore, many service contracts have a secondary component called a service level agreement or SLA, which is a lengthy, detailed document that contains the specific details, including quality, availability, and responsibilities, your provider has agreed to follow.
All that is to say service contract portfolios can get unwieldy fast, and as a result, you’re likely to outgrow contract management software that limits the amount of storage for your agreements – or end up paying a premium for extra space. Software that provides unlimited storage for your contracts grows flexibly as you do, accommodating agreements with new service providers or as you expand operations to new locations. This also helps to keep your management strategy for service contracts organized and holistic because you are guaranteed to always have space for new contracts, rather than having to make provisions as your portfolio expands over time.
2. Service contract software that doesn’t provide easy access to contracts
In an ideal world, you’d never have to reference service contracts from the time that they are signed until they are due for renewal – suppliers would simply deliver contracted services as agreed, without a hitch. But in reality, the internet can go out, delivery trucks break down, and there are a whole host of other problems that can occur during the life span of your service agreements. If you’ve done a thorough job of negotiating, your contract or SLA should provide a roadmap for those instances, detailing your provider’s obligations to you, including things like resolution time and any penalties to account for resulting losses. But as with any situation in life, when a problem arises, the best way to achieve your desired outcome is to first know your rights – and that means referring to your agreement.
When a critical service goes down, time is of the essence – for example, according to Gartner, network downtime costs an average of $5,600 per minute, meaning that literally every second counts. If your service contract software does not provide easy access to your documents to allow you to determine the next steps, it can hinder your ability to achieve a quick resolution – increasing your costs along the way. The best way to ensure the access you need is to look for contract management software that provides granular user permission settings, allowing those who manage the relationship with each service provider to have direct access when they need it, rather than having to go through contract management teams to fulfill urgent document requests. Furthermore, look for cloud-based software that can be accessed from anywhere, using any device so that if a problem occurs when you're away from the office, it can still be dealt with quickly.
3. Service contract management software that makes you look within your documents to find key information
Deadlines are everything – and they’re especially important when it comes to service contract management. Whether it’s milestones related to the specific service being delivered or automatic rollover at the end of your contract, service contracts typically contain important dates and timelines that can affect everything from the price you pay to the service you receive. For example, your contract may include specific information or actions you will need to provide your supplier or perform before they can do their job; if you miss those deadlines, your contract may state that your provider is not responsible for their full obligations, or you may incur penalties. The right service contract management software should make staying on top of your contractual obligations easier, with automatic, easy-to-use features such as alerts and milestone notifications that reduce your burden. Without these, it can be all too easy to miss an important milestone – and either not receive the full benefit of your contract or incur additional costs.
The Buyer's Guide to Contract Management Software
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