To produce a desired outcome in contract lifecycle management, you must carefully strategize and implement the right software solution for your business. Effectively overseeing contracts can be very challenging without the proper tools available. A well-planned strategy combined with the best software will make for an effective contract management software that delivers an optimized result to your clients and vendors.
In contract management, there are numerous investments made, so leveraging proper contract management software can help in maximizing your ROI. Several businesses lack comprehensive contract management – meaning they miss out on a systematized, stepwise process of managing their contracts that allows them to maintain accountability and insights on both contract lifecycles and the parties involved. In this way, these businesses can reap negative impacts in terms of compliance, risk potential, and productivity.
The Definition of Contract Lifecycle Management
Many of today’s industry and business leaders use contract repositories to manage, track, and store contracts. With a cloud-based, centralized contract repository, your business can benefit in many ways by increasing visibility and by having a single source of truth regarding all of your organization’s contracts, legal agreements, and other related documents. However, having only a centralized contract repository will not alleviate all of the challenges associated with contract lifecycle management. Contract lifecycle management requires oversight over the entirety of contract lifecycles – from the contract request and intake stage, to contract renewals.
Oversee all of your contracts with on-demand insights and with all of your contract information readily available in a single software platform with Dock.
Combining the three main components of people, strategy, and software, contract lifecycle management provides a way to ease the entire process of managing contracts that benefits both your business and stakeholders. There are several departments typically involved in contract lifecycle management. For example, legal aids in risk management and mitigation, whereas the sales department lead focuses on streamlined contract generation and initiatives to speed-up contract executions. The quickest road to success to increase the value of your contracts and to provide your business, vendors, and clients with best possible contracting experience is by implementing a modern and comprehensive contract lifecycle management system.
The Challenges in Contract Lifecycle Management
Typically, businesses that lack the following elements will encounter additional challenges in contract lifecycle management:
- An accessible cloud-based, centralized repository
- User-friendly contract data analytics and reporting tools
- Contract templates and a preapproved clause library
- A collaborative system for contract negotiations
- Constant contract tracking and reporting features
Mismanagement of contracts often stems from separate business challenges. It’s important to conceptualize the manner that improper contract management can bring amount a myriad of issues spanning across the entirety of contract lifecycles.
Here are some common challenges found during various stages involved in contract lifecycle management.
It can be difficult to accurately track the status and location of your contracts in real-time. Locating contracts and tracking the proper version of them can be additionally tricky, meaning that you might miss out on opportunities because of poor management of tasks, renewals, expirations, and more.
Slow approvals are big issue in contract management that can lead to several other bottlenecks. When stakeholders, clients, and vendors communicate via email and spreadsheets to negotiate and oversee tasks, approvals are dramatically slowed. In this way, tracking the status of your contracts and managing version control can be very difficult. Slow approvals oftentimes result in failed results and issues pertaining to compliance standards.
Businesses that lack a preapproved clause library take much longer to finalize and execute contracts. Due to the delays caused by inaccurate contracts (stemming from the clauses) thus leading to slowed approvals, long contract reviews, increased risks, and compliance-based issues.
Poor contract management can significantly impact your business’s bottom line in a negative manner. The losses that result from poor contract management processes can impact the contracts that span across your business.
Today, electronic signature integrations have changed the game in contract management and in the business world at large. Signing a contract is one of the most critical steps of contract lifecycle management. Unnecessary delays that occur during the signing step can cause further bottlenecks in the execution of contracts, thus increasing the duration of contract lifecycles overall. Additional delays will also occur when failing to appropriately meet both compliance standards and obligations when using an outdated contract management approach. This approach specifically relies on wet signatures as opposed to electronic signatures.
Creating an accurate contract can be very difficult. Especially, when your business is required to oversee a high volume of complex contracts. With multiple parties involved in different steps and stages associated in the contract lifecycle, there’s the potential for ineffective communication and poor collaboration that can cause a lack of control over the assembling of contracts that can increase risk – leading to non-compliant contracts.
In traditional contract management software, contract renewals rely on a manual process that oftentimes does not give stakeholders enough time to comprehensively review contracts. In this way, there is a high potential for human error that can decrease productivity, ultimately leading to missed opportunities.
With manual contract storage methods including filing cabinets, shared drives, and emails, you’re destined to lose track of your documents and lose opportunities due to lacking visibility. In addition, you won’t be able to conduct filtered searches and create quick, accurate reports in a manual contract management software.
A Manual Approach
Businesses that manually manage contracts with physical copies, shared drives, emails, spreadsheets, and more, increase risk for compliance issues. Many problems can occur, including slow contract processes, disorganized workflows, minimal transparency and visibility, inefficient collaboration, and disjointed information due to a lack of centralization and integration with software applications.
Poor contract management only causes contract failure. You want a contract management software solution that can increase the value of your contract management software. By implementing the correct tools, you can decrease risk and increase return on investment.
Choose to streamline your contract lifecycle management by implementing software that can help through every stage of the contract lifecycle. In this way, you prevent against several challenges from the very beginning, simply by transitioning to a digital contract management platform.
The Advantages of Contract Lifecycle Management Software
Contract lifecycle management software gives businesses control over their contracts with modernized features. Also, the automation capabilities that allow for seamless management of contract lifecycles.
Ask yourself the following questions to see if it’s time for you to switch to a dedicated contract lifecycle management software.
- In general, would you consider your current contract management software very successful?
- Are several parties or people involved in your business’s contracts?
- Is the duration of contract lifecycles unnecessarily long
- Is the time spent during legal reviews too much?
- Are negotiations and executions consistently delayed?
- Is there an appropriate level of contract visibility?
- Do you regularly miss contract milestones, expiration and renewal dates, and other important deadlines?
- Does your contract management software lack audit trails, user access controls, and user permissions controls?
- Are internal and external compliance both managed effectively?
- Is contract tracking, data analysis, and reporting a source of struggle?
If you found these questions revealing when you consider your current contract management software. It might be time to transition to contract lifecycle management software. Don’t let slowed turn-around times and risk exposure decrease the value of your contracts. Improve your contracts by utilizing Dock’s Contract Management System.
Contract lifecycle management can be largely improved with the correct contract management software. Here at Dock, we are experts in SharePoint and Office 365. We want to help businesses utilize their features to revolutionize and streamline contract management.