Organizations deal with thousands of contracts at any given time. However, a failure to streamline and manage the organization’s contracts will cause delays and a slowdown in the company’s operations – which is an undesirable bottleneck situation for any corporation. This is where the need for enterprise contract management software comes in! Let’s learn how an enterprise contract management system helps a corporation.
What Is Enterprise Contract Lifecycle Management Software?
Enterprise Contract Lifecycle Management (CLM) is a centralized end-to-end solution that streamlines the contract portfolio of big organizations. It declutters and optimizes the workflow, which improves operation, reduces costs, saves time, and protects an enterprise from security breaches. Here are the key benefits and features of a typical enterprise contract management solution:
- Eliminates the need for low-value manual procedures tasks that are time-consuming.
- Develops a central depositary where all employees can search and track a contract lifecycle.
- Allows developing customized drafts quickly with built-in templates.
- Execute contracts quickly using the e-signature tool.
- Creates visibility and efficiency, allowing organizations to meet contractual obligations within time.
What Are the Main Purposes of Enterprise Contract Management Systems?
At any time, the storeroom of an organization is bundled with stacks of contract paperwork. However, it’s inefficient and time-consuming for employees to stifle through the files and locate a contract.
It gets even more challenging in multi-department organizations where contracts require collaboration and synergy from multiple departments. If a company handles manual contracts, the approval, reviewing, and editing process from multiple departments will take a lot of time.
Moreover, a large organization with a massive contract portfolio will likely face difficulty tracking document changes and remaining updated with a contract’s lifecycle. This might result in the organization missing key deadlines and plenty of opportunities.
7 Signs You Need an Enterprise Contract Management Tool
Of course, implementing enterprise contract management solutions will require financing, and it might only be feasible for some corporations. However, if your business is growing at a fast pace, you shouldn’t overlook the management function of your contracts.
Here are the seven crucial signs which signal that it’s time for your organization to install a robust contract management tool:
- Multiple Stakeholders in the Organization
In case your organization has multiple decision-makers who must review a contract beforehand, a contract management tool would help. But how?
See, if even a simple NDA document requires approval from around ten or even fifteen individuals, consider the time lost in just getting the first draft reviewed. It’s undoubtedly inefficient, and an automation tool that creates visibility for every decision-maker will save time and speed up the workflow.
- Complex Sophisticated Contracts
Legal, HR and financial contracts often contain potentially risky clauses that may affect a business’s reputation. For this, an organization must have to collaborate with legal counsel experts. However, communication delays can arise if you use manual procedures and paperwork.
In contrast, automation software will directly allow the legal expert to foresee the contract and review it to prevent including risky clauses.
- Strict Compliance and Disclosures
From adhering to legal terms to complying with domestic laws, it’s challenging for the legal team to create, review, and finalize a sound contract. Furthermore, some contracts are strict and confidential. An automation software, fortunately, has end-to-end encryption and roles assignment tools to monitor user activity and track version controls.
This way, the contracts are stored safely, and the legal team finds it easy to develop and finalize contracts on a single system.
- Contracts’ Security
Financial contracts, HR employment contracts, and vendor details are top-confidential documents accessible by only a few key individuals. In the case of manual procedures, there’s a high chance of theft. But that’s not the case with contract management tools since they have access gatekeeping features that limit user controls.
- Third Parties Contract Management
A big organization will have thousands of sales and third-party vendor contracts. However, every one of them might have customized needs, and a standardized contract template may not work. Fortunately, contract management tools come equipped with customizable templates and editing features, which can help boost the workflow process.
In addition, automation software will keep you updated about the contract’s lifecycle. So, if a third party was to ask you for a status update, automation software will generate quick results!
- Difficulty in Meeting Contract’s Deadlines
With numerous back-to-back live contracts lined up, there’s a high possibility for the organization to miss a contract deadline. However, enterprise contract management software has live reminders which send alerts and notifications to update the management team.
- Missing Contractual Opportunities
In big organizations, the sales team requests the legal department to draft a customer contract. However, an absence of a tracking system prolongs the process and makes collaboration challenging, leading to risks of loss of business opportunities.
Contract automation software saves the day since it speeds up the process by offering automated e-signature tools, dynamic reviewing, and multi-party collaboration.
Selecting and Adapting to an Enterprise Contract Management Solution
Adapting to new technology is the only way to stay relevant and competitive in this age. Here are the key metrics to consider before selecting a contract software:
- Assess Business Needs
Check out the above seven signs before investing in the software. If your organization’s operations are increasing and becoming difficult to manage, it’s time to change.
- Involve Key Staff
Communicate the decision to the key executive to ensure everyone is on the same page. Use evidence and benefits to persuade them to implement the system.
- Determine Access Control
Not everyone should have complete access to the software. So, identify the hierarchy level and grant software access based on the employees’ roles.
- Support and Training
Get in touch with potential vendors and collaborate with your IT team to develop customized software that aligns with organizational culture. Keep in mind that there’ll be several individuals who’ll resist the change. Hence, it’s essential to develop training programs to help them adapt to the change.
From missing out on contract deadlines to incurring high compliance costs to reducing overall productivity, poor contract management can be catastrophic for organizations.
Before it becomes a significant expense for your company, you need to take action and implement enterprise contract management software to automate operations, improve workflow processes, and boost productivity.
Olga V. Mack is Vice President at LexisNexis® and CEO of CounselLink® CLM, a next-gen contract management company that has pioneered digital negotiation technology.
An award-winning general counsel and operations professional, Olga embraces legal innovation and has dedicated her career to improving and shaping the future of law. She shares her views in her columns at Above the Law, Forbes, Bloomberg Law, Association of Corporate Counsel (ACC) Docket, and more.