Before you start the process of comparing vendors and features, it’s important to thoroughly understand your contract management shortcomings and needs - as well as anything that’s already working well. Because there are so many solutions available, it’s critical that you start your search with a clear idea of what you need help with so you don’t waste time talking to vendors that don’t align with your objectives and project guidelines.
This article explores some of the things to consider before starting the search for a contract management solution, the various types of solutions available, and tips for success.
The first step in the process of improving your contract management is to understand the fundamental reasons a change is needed. From there, you can help expedite the process by developing a budget and getting specific about the stakeholders involved with or impacted by the adoption of new software.
Answering the following questions will give you a better idea of what to look for during your research and selection process.
Questions to Ask
What’s driving your decision to implement software?
Are you in a new role and looking to improve the processes and systems you inherited?
Is your business/contract portfolio growing quickly and you need more control over your corporate agreements?
Was an important contract deadline or milestone missed?
What is your annual budget for contract management software?
$0 - $5k/year?
$5k - $20k/year?
$20k - $100k+/year?
Who will be impacted by the solution and who will be involved in the purchasing process?
Are you looking to implement a solution that solves the needs of the legal team? Multiple departments? The entire company?
Who are the key stakeholders to consider in your contract management process?
Types of Solutions
A quick search for contract management software on any technology review site will return hundreds of results. So where do you start?
The short answer is that it all comes back to your unique situation and the exact challenges you are looking to solve.
Some legal teams manage their contracts using manual methods that include spreadsheets, shared drives, and other existing or readily available business tools. Collaboration software like SharePoint can be utilized to help organize agreements and allow for greater contract access and collaboration across the organization, and plug-ins can be added to provide limited contract management functionality. This manual approach to managing contracts simply allows legal teams to get a high-level overview of their contract situation and organize and share documents so more people can collaborate in the contract process.
For legal teams looking to solve challenges stemming from broken manual processes and a lack of contract insight, contract management software is the ideal solution. Many legal departments choose to invest in contract management software because it allows them to understand the contents of their contract portfolio more thoroughly, helps automate the contracting process, and solves for complex workflows. It often includes powerful artificial intelligence features that can help with much of the heavy lifting and repetitive tasks that traditionally require extensive time and effort from members of the legal team.
Contract management software runs the gamut as far as cost, functionality, and complexity, but is typically broken out into two main categories: focused contract management software and enterprise contract management software.
Focused Contract Management Software
This type of contract management software solves for targeted parts of the contract lifecycle, and is designed to help legal teams address their most pressing contract management challenges quickly and affordably. This software can help improve things like contract tracking and monitoring, execution, reporting, and review.
Contract management software that specializes in certain pieces of the contract lifecycle is ideal for teams that know the specific challenges that need to be solved and are looking to get results quickly. This software can typically be implemented and adopted in a matter of weeks for a relatively minor investment.
Enterprise Contract Management Software
Enterprise contract management software is a comprehensive contract management solution that is intended to solve for the most complex processes and workflows and allows departments across an organization to tackle every part of the contract lifecycle in one central location.
Enterprise contract management software delivers the most functionality and features, but requires a major time and financial investment to get started. While this is the necessary solution for many large companies with complex contract management needs, be prepared for a lengthy implementation and adoption process before all of your users are ready to jump into the system.
Tips for Success
When starting the process of purchasing contract management software, the most important thing to consider is what you and your team are looking to solve. There are hundreds of solutions on the market, but if you can identify and focus only on the handful that address your unique challenges and requirements, you can make the process much more simple and straightforward.
Start by understanding exactly what you’re looking for, reviewing the available options, and doing research to see what customers are saying about each solution. Once you have settled on a list of viable candidates, get in touch with vendors so you can discuss your needs and get a better idea of how each system would improve your contract management process, keeping in mind the time and money required to successfully adopt each system.
Navigating the contract management software landscape can be overwhelming, but if you know what you need the software to help with, you can quickly narrow down the choices and select the solution that best aligns with your unique needs.
For a more in-depth look at the various types of contract management software solutions and how they align with specific challenges, download The 2020 Buyer’s Guide to Contract Management Software.