Almost all industries such as legal, public sector, banking, hospitality, healthcare, pharma, insurance, education, oil and gas, automobile, etc. treat contracts as the lifeline of their business. The legal and contract management teams need to have a quick turnaround process incorporated in their enterprise in order to effectively manage and execute their contracts.
One of the essential activities in managing enterprise contracts is to maintain a centralized control of the contracts. An enterprise manages multiple contract types such as NDAs, IT vendor contracts, sales agreements, purchasing agreements, support contract, annual maintenance contract, lease agreement and so on. Having a centralized place for such contracts gives your enterprise the complete visibility of critical contract management processes such as contract requests, authoring, negotiation, review by stakeholders and counterparties, and amendments.
But do enterprises really have the complete visibility of their contracts? If your enterprise is currently managing the contracts manually then it is facing contract visibility issues. Gartner’s recent report on contract lifecycle management states – “Contract Lifecycle management (CLM) is evolving from an operational record-keeping system, primarily used for legal audit purposes, to an enterprise-level core system addressing business risk, costs and the pursuit of revenue maximization. CIOs and line-of-business management need to identify the right solution for their needs.” We can all agree that contract management automation tools need to be leveraged by enterprises to gain total visibility of the contracts.
Why Automate Contract Management?
Imagine yourself as the contract manager. Your company CFO asks you these questions – Do you know where the NDA contracts are? Can you give me the annual maintenance contract agreement with XYZ Company? Can you tell me how many contracts are due for renewal? What is the progress status of the contract requested by the sales department? If you are manually managing your contracts then you will probably have a difficult time answering these questions. It could take you hours or days to get answers to such contract related questions.
Contract management automated solutions can help legal and contract management teams or other stakeholders to answer such questions easily. There are enormous benefits that the enterprise can benefit by deploying a contract management solution. Not only will it give you the complete enterprise wide contract visibility but it will act as a change catalyst for the enterprise and improve productivity and revenue. With automated solutions, the enterprise can control and monitor the contract request, authoring, negotiation, and execution processes in a timely manner.
Let us now discuss on 8 critical benefits that an enterprise can gain by deploying a contract management solution:
Contract management solutions allows enterprises to quicken contract amendment and approval tasks by creating a collaboration between the stakeholders (including counterparties). It establishes a collaborative environment thereby empowering all stakeholders to better control their contracts and build better relationships with their customers and vendors. Managing contracts with collaboration can reduce risks, shorten contract cycles, and increase productivity.
2. Contract Analytics:
Contract management solutions provide efficient insights, contract intelligence, and reports that reinforces better decision making and better understanding on contract obligations and opportunities. Analytics provided by contract management solutions can help the enterprise to discover hidden opportunities and spot the risks proactively before they can cause any financial or brand loss to the enterprise.
3. Stay Compliant:
Contract management solutions ensure that all the contract related activities are carried out within the process framework laid down by the management. It helps in providing insights into contract terms which can be used for better negotiations with the vendors thereby saving costs. It also helps to identify the sources of non-compliance. Vendor overpayment and purchasing goods or services by not following the guidelines mentioned in the contract are considered to be the most prominent form of non-compliance. This can happen due to mistakes, clerical errors or fraud but contract management solutions can help your enterprise to spot such forms of non-compliance.
4. 360 Degree Contract Visibility:
Contract management solutions helps enterprises to stay up to date with all activities happening throughout the entire contract cycle with alerts, intuitive dashboards, canned reports and complete audit trail. Such contract visibility will help the enterprise to mitigate risks, eliminate losses due to mistakes, and never lose opportunities.
5. Real-Time Alerts:
Contract management solutions allow the enterprise to set real-time alerts to notify contract administrators, contract owners and business users when a contract is due for renewal, about to expire, upcoming milestones, and other notifications of other specific contract terms.
6. Access and Manage Contracts in Real-time:
Contract management solutions allows stakeholders to manage their contracts in real-time from anywhere, anytime, any device. This increases the collaboration between stakeholders and fosters productivity.
7. Central Contract Repository:
One of the biggest advantage an enterprise can gain by deploying a contract management solution is by maintaining all their contracts in a secured centralized location. This empowers users to gain access to all their contracts and effectively manage them.
8. Contract Search:
Contract management solutions totally eliminates the pain of manually hunting for specific terms and conditions in the contracts. It allows any contract to be searched by metadata or with full text search capabilities that includes document searches with security parameters automatically applied.