Contracts dictate critical aspects of key business strategies and relationships, which is why contract and legal teams spend a significant amount of time and resources executing contracts to their liking. Enterprises utilize Contract Management software features to automate Contract Lifecycle and achieve comprehensive end-to-end control over their contracts.
An effective enterprise contract management program enables organizations to have visibility into their contract population. This visibility can allow companies to react to business problems by promptly locating and analyzing key provisions across their universe of contracts.
In today’s digital world, it is important to adapt to changing marketplace trends and varying consumer demands to stay relevant and competitive. Today, the significance of digital Contract Management has shifted from just another business process requirement to a competitive advantage. According to a study by Paradoxes, 46% of contract management professionals say an abundance of manual tasks makes collaborating on contracts a challenge.
The COVID-19 crisis worldwide also forced organizations to quickly adapt to the changing situations and address the shortcomings in their current contract management software strategy. This is why enterprises are now focusing on implementing robust automated CLM systems to manage their CLM efficiently. Technologies like AI are also contributing to addressing the most common pain points in contract and document management. It is found that 47% of sales teams say analyzing non-standard agreements for opportunities and risks is the most challenging part of the post-execution process.
1. Contract Repository
Many businesses struggle with missed obligations and renewals, duplication of contracts, compliance issues, and more just because they lack a centralized contract repository in place. A contract repository is a single, central location where all of your contracts and their metadata are stored. The contract repository avoids data fragmentation by storing your contracts and their relevant documents, such as compliance certificates, in a single location. It also automates your data entry processes allowing every team across your company to work in the same way, hence eliminating human errors.
The Journal of Contract Management estimates that 71% of businesses can’t locate at least 10% of their contracts. With a contract repository, you can easily find contract records, documents, or counterparties with a quick keyword search. It also enables a 360-degree view of all your contractual relationships in a single-page view. It also helps to automate your data entry processes eliminating the chances of human errors.
2. Contract Lifecycle Management
CLM is the proactive and methodical management of a contract right from initiation throughout its award, compliance, and renewal. Effective Contract Lifecycle Management helps to standardize your Contract Management process, including workflows, tasks, reminders, and notifications for contract renewals, obligations, milestones, and pending activities. It standardizes and controls the contract development and hence, strengthens operational, contractual, and regulatory compliance.
According to research by Aberdeen Research, it takes, on average, 20-30 days for a company to create, negotiate and finalize a contract. Efficient CLM can streamline and boost this very process by standardizing the process from start to finish, making collaboration much faster and tasks easier to track. It also ensures you don’t miss deadlines and access information from any part of the process through a few clicks. CLM features also help you with renewals and terms, amendments and change management, milestones and reminders, contract obligation tracking, and status management to help you achieve maximum contract productivity.
3. Smart and Convenient Search Functionality
As an organization with multiple partners and clients, you must be working with hundreds of contracts. So, it becomes very important to be able to sort through all of these and find the contracts you’re looking for. The Journal of Contract Management estimates that 71% of businesses can’t locate at least 10% of their contracts.
A Contract Management system with convenient search functionality makes your job much easier. You don’t have to scroll through pages and pages of contract documents just to find that one contract. Search functionality helps you find contract records, documents, or counterparties with simple keyword search and search refinement capabilities. It also provides you with better search refinement, i.e., selecting metadata criteria with boolean operators such as OR, AND, and NOT, greater, or less than, exact or partial match.
4. Timely Alerts
More often than not, contracts are filed and forgotten, which leads to missed contract reviews and renewals along with many other important events in the contract life cycle. Timely alerts and notifications come in handy in those very situations. A CLM system with such capability allows you to manage contract obligations like renewals, payment schedules, shipping time, invoicing, rentals, report submissions as a part of contract performance evaluation.
You can easily set up email reminders for business users to fulfill and reconcile with obligations outlined in the contract, along with reporting on missed and delayed obligations. It also allows you to update the status on the contract lifecycle stage with the auto status transition on completion of specific actions or conditions.
5. Contract Template Authoring and Document Automation
Contract writing and authoring can be one of the easiest or complicated steps of the CLM process. Irrespective of the type of data the contracts consist of, writing all of that can be a cumbersome process, so it is crucial to have a robust contract template authoring tool in place.
Contract template authoring and document automation help you in faster implementation of frequently created contract documents using pre-approved legal and business templates. It also allows for a hassle-free amendment process via document upload, amendment wizard, and amendment-specific workflows.
6. Automated Workflows
Simplifying the administrative work is one of the priorities of contract and legal teams. Automated workflows help you in routing your review and approval workflows based on criteria involving contract value, contract type, data, business area, standard or non-standard agreements, etc.
You can add multiple stages in the review or approval phase for more structured or hierarchical processes, guided to multiple users sequentially via serial assignment or simultaneously via parallel assignment. It also helps you to negotiate back-and-forth between counterparties through secure sharing of contracts and individual documents. To know how streamlined Contract Management can work wonders for regulated industries, click here.
7. Reporting and BI Capabilities
Leveraging advanced technologies is key to CLM productivity. It also helps contract professionals to stay competitive as well as help them save hours worth of manual work. A CLM system powered with reporting and BI capabilities can help you to customize and create reports on contract cycle times and analyze time spent on individual contract tasks and activities.
These capabilities help to quickly analyze data visually in an efficient manner while giving you powerful, cloud-scale analytics and data visualization within the contract lifecycle. They also assist in building non-standard DIY reports without the need for programming skills while calculating important KPIs for each customer.
8. Electronic Signature
The electronic signature is the way to the future, and Contract Management is no exception. The traditional methods of gathering approvals and signatures are tedious and frustrating. According to Paradoxes Inc, nearly 68% of legal departments say that ‘digitizing manual processes’ is a top priority. A contract management system with e-signature integration helps you quickly get important people’s consent on contracts and documents while providing you with benefits like security, verification, and full audit capabilities for your business.
It also includes features like signature status tracking, auto-posting of signed copies, email alerts, etc., to make your contracting even easier.
9. Office 365 and Word Integration
Professionals looking to upgrade and enhance their current contract management processes understand the value key integrations bring to their existing software systems. Microsoft’s Office 365, the cloud-based collection of productivity tools such as Excel and Word, is becoming a go-to integration in most organizations. The combination of Office 365 and Azure is capable of enhancing and securing Enterprise Contract Management effectively.
Office 365-enabled CLM system enables a consolidated, collaborative, and intelligent contract management experience by bringing together contract metadata, documents, dashboards, activities, and workflows. It also enables secured repositories to store and collaborate on contract documents accessing them anytime from anywhere. It also provides you with seamless integration with other Microsoft tools such as Word, Active Directory, and Outlook.
10. AI-Enabled Contract Discovery and Analytics
AI enables the extraction of key information like counterparties, renewal milestones, obligations, phrases, and provisions from thousands of contracts. It utilizes AI capabilities to find variance in the clauses of contracts after learning what standard clauses look like. Gartner predicts that manual effort for contract review will be reduced by 50% due to AI by 2024.
Contract analytics provides valuable performance insights into all areas of contracts like cycle times, deviations, risks, statistics (expiry, renewal, pending, etc.), procurement and sales business metrics, and much more.
It’s important to consider the needs of your organization as thoroughly as you would examine the features and benefits of Contract Management tools. It helps you reduce operational costs, increase productivity, and exceed your client’s expectations, and that’s exactly what we help you with.
So, are you ready to take control of your contract processes?