To Build or to Buy?: Electronic Contract Management System
Contract management, in one form or another, is a necessity for most organizations. Before falling back on an informal system, or jumping to purchase the contract lifecycle management software with the most bells and whistles, assess what your organization needs for a contract management system to be effective.
Build Your Own: Pros and Cons
Some organizations take a do-it-yourself approach to contract management. Spreadsheets, a shared documents folder on Google Drive, or inbox alerts may serve to store contracts and communicate updates.
One benefit is that this method fits even a shoestring budget. Another important reason why administrators might opt for a build-your-own solution is to use software employees already know. Fear of a potentially steep learning curve, or lost time, can make legal counsel or managers wary of adapting to a new contract management system.
Unfortunately, the cons of building your own CLM system often outweigh the benefits. Employees may not lose any time learning a new software interface, but they often spend time “reinventing the wheel” to set up the spreadsheets and storage files that their self-built system needs. It’s also possible that administrators may not happen to think of a particular feature that would save time or improve security. If a department uses local storage for all or part of contract storage, for example, communication bottlenecks and missed updates may become more likely. Since many build-your-own contract management systems rely on manual checks, they can be difficult to scale.
Buy a Contract Management System: Pros and Cons
In organizations with greater contract volume and more complex contract management demands, a specialized CLM software can make it easier to optimize organization.
Better security is one important improvement over a build-your-own system. It’s important to be able to assign or restrict access to sensitive documents in your contract repository. A hierarchy of access lets you share full editing abilities or limit users to view-only status. Two-factor authentication verifies that users have proper access. Organizations that must adhere to compliance regulations may be particularly concerned about maintaining rigorous security standards.
Contract management software systems are designed to handle hundreds or even thousands of files. Streamlined, organized, and collaborative contract management processes are perhaps especially important in large or rapidly-growing organizations. Look for contract management software with features that enable quick, well-organized searches.
The main downside that you may worry about when considering buying a contract management solution is wasted resources, especially time. To a certain extent, this is a valid concern. There are departments or organizations that invest in a software system, only to find that the team doesn’t use it. In a busy department, it’s difficult to identify a “convenient” time for people to adjust to a new method of contract management. A little front-end planning can minimize the duration of a transition phase.
Consider what features the organization needs. A simple CLM software with a handful of essential features may be much more valuable than a flashy contract management system with lots of obscure functions. To reduce the new-software learning curve, look for an easy-to-navigate interface and quick, simple uploading ability. Drag-and-drop capability, in addition to standard file uploading, can make it easier for employees to add their files to a shared system. Ideally, the new system should be intuitive enough to get users working confidently almost immediately.
The Buyer's Guide to Contract Management Software
Quickly identify solutions to your specific contract management challenges.