Top Contract Management Challenges Tech Companies Face
Technology companies manage thousands, if not tens of thousands of contracts. These include:
Contracts with resellers and distributors of your software or hardware
Patents, trademarks, and copyrights that protect your intellectual property
License agreements for the use of technology belonging to other companies
Contracts with employee workers and contractors, including NDAs and non-competes
Equipment leases, real estate contracts, etc.
And that’s not counting contracts and licenses with customers, which for B2C tech businesses may amount to hundreds of thousands, if not millions, of contracts.
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As a contract management professional, getting visibility over these contracts and reducing risk isn’t easy. In the competitive tech industry, the consequences of a contract mistake (such as the loss of intellectual data, reputational harm, or the leak of private customer data) can be fatal; your competitors will be quick to capitalize on any mistake your business makes.
To prevent this from happening, technology companies need to overcome five challenges:
Challenge #1: No Central Source of Truth
In many organizations, responsibility is dispersed throughout the organization, with each department holding the contracts for which they are responsible. While departments should have responsibility for their agreements, a big-picture view is also needed to ensure contract management professionals can manage contract risk. Achieving this without a central source of truth is almost impossible.
Ideally, technology companies should use software that takes contracts out of silos and places them in a central repository. They can achieve this without sacrificing security or departmental oversight by using granular access control. This means that specific departments and managers retain control and access over their contracts and contract management professionals can have oversight over the entire process.
Challenge #2: Finding the Information You Need
Reading through a contract to find the specific information you need takes time. Now imagine what happens when you’re managing hundreds, if not thousands of contracts. Doing this manually not only takes up valuable employee time, but also increases the opportunity for user error, which can lead to expensive mistakes.
Contract management software can reduce user error by automatically tagging key fields – such as termination date, renewal date, and the parties involved – so that you can access the information you need quickly.
Challenge #3: Data Security
Hackers are becoming increasingly sophisticated in how they gain access to business data. This is a challenge for contract management professionals because the contracts you manage hold a vast amount of data.
This is a particularly significant risk for B2C companies, who may hold the data of millions of customers, but is also a concern for B2B. Many contracts contain valuable strategic information that could benefit your competitors or damage your reputation if released.
To solve this challenge, you must choose contract management software that will enable you to both manage and secure your contracts.
Challenge #4: Protecting Valuable Intellectual Property
Your legal defenses (patents, trademarks, and copyrights) and internal safeguards (NDAs and non-competes) are essential for protecting your business’s strategic advantage. They are the only thing that prevents your competitors from outright copying your products or your ex-employees and contractors from using their knowledge to set up a competing business.
Having these contracts isn’t enough; they need to be iron tight. Contract management software can help you manage and maintain these vital contracts correctly.
Challenge #5: Keeping Track of Important Milestones
Poor visibility into your contract milestones and obligations can cause your contract risk to become unacceptably high. Technology contract professionals must have a clear view of upcoming dates and responsibilities of both their own business and those they have contracts with.
Contract management software can automate this process, reducing the risk of human error. Automatic alerts tell you when a contract is approaching an important date so that you can check the appropriate parties are following through with what they need to do.
ContractWorks: Tech Contract Management Made Easy
ContractWorks helps technology companies take control of their contracts.
Central Contract Repository – Get visibility over and take control of every contract your business has.
Milestone Alerts – ContractWorks will notify you of upcoming key dates in your contracts; you’ll never miss an important date again.
A.I. Auto-Tagging – ContractWorks automatically identifies key information within each contract, enabling you to find the information you need with just a few clicks.
Custom Reporting – Create custom reports using any data-point. This improved oversight helps you manage risk and improve your decision-making.
Industry-Leading Security – Your contract data is held on highly-secure Amazon Web Services (AWS) data centers. Granular access control and multi-factor authentication ensure only individuals you specify can access your contract data.
Contact us today to find out more about how ContractWorks can help your technology company increase visibility and reduce risk across your contract portfolio.