You create all your vital business contracts in Word, then send them around the business for review via email. You manage all the associated contract deadlines via a spreadsheet and put the renewal dates within their outlook calendar. Sound like an integrated, error-proof process?
No. That’s why a growing number of organisations are starting to think about a better way to perform all their Contract Management processes in a more unified, joined-up way.
Contracts are one of the most vital documents in a business. Nothing gets bought or sold without a contract being written up. But as it stands, 80% of companies still don’t have any sort of Contract Management tool. But what would a good one look like? Our experience with customers suggests they need to offer you the five key benefits of centralisation, deadline control, workflow automation, reporting and compliance adherence.
Centralising of contracts and contract data
The biggest problem when you speak to anyone with regard to Contract Management is if you don’t have a specific tool to manage contracts, they can end up being stored everywhere. But by having a centralised system, we reduce the risk of losing contracts. If somebody leaves the business who has been managing a specific contract, nobody knows exactly where the documentation is stored, for example, which could mean missing auto renewal and costing the company money for services they don’t require anymore.
Plus by centralising, we’re allowing for better collaboration. Any contract will have been created by a number of people within the organisation and by having it in a centralised repository, everyone can access it easily.
This is making sure that we are alerted to key dates within the contract automatically. Every contract has an expiry date that we need to be alerted to. By using a Contract Management system, when these contracts coming up for expiry the users will be alerted by an email and they can make sure that they are proactive in renewing these contracts instead of leaving them to expire. There might be a whole litany of terms or things that we want to be reminded of – to get in touch with the contractual partner regularly, perhaps. There might also be a possibility to earn more revenue by contacting the customer early and renewing the contract instead of letting it run out when the contract has expired.
Let’s automate the creation and approvals process for creating contracts. These are highly, legal documents and there may well be huge number of touchpoints for creating contracts. By automating that process we can view the status of the creation, where the contracts are at any point, who they are with, what tasks remain before this contract can be created and go live, etc. All useful, and we’re going to heavily reduce contract creation time – in some customer cases, by up to 50%.
Using a Contract Management tool, you can create self-generated or automated, standardised reports on any information contained in the system. You can review KPIs related to Contract Management, review risk management and how at risk the company is depending on the risk level of certain contracts. You can also create graphical dashboard reports to see the status of any of the contracts within the system. This gives us much greater visibility into any of the data we have on the contracts we are managing.
Contracts hold incredibly sensitive corporate information, so it’s vital that they are stored in a secure system so you can make sure you adhere to compliance guidelines, risk management and legal requirements, and ensure that you can access the correct information when it’s demanded.
So there we have my Five Top Tips for Contact Management nirvana, to help you and your business processes.
George will be discussing the issues raised here in a special upcoming EASY scheduled for May 9, 10.30-11am. For more information and to sign up to attend, go here.