“Contracts are the core of modern enterprise. All business partnerships, transactions, procurement arrangements, and vendor relationships are regulated by contracts establishing rights, obligations, and risk allocations. As an organization grows, so does the volume and complexity of contracts being managed.”
The above statement draws into question the relevance and use of contract management processes and how contract management tools add value to business. This is because, as the number of contracts an organization manages, the more it gets complicated. This, therefore, raises the question posed in the title: What contract management process is actually streamlined by contract management software?
The answer is simple. Contract management software automates five essential aspects of contract management, which have always served to slow businesses down, pose risks, and hinder scalability. Contract management software manages aspects of contract management, such as contract organization, collaboration and approval, security and compliance, renewals and obligations, and business operations, that formerly made contract management a reactive, administrative, and business disadvantage.
Things were much harder before, and shared drives, spreadsheets, email, and even file cabinets were used as ways to deal with contracts by companies. While it may be possible on a small scale, it would eventually be inefficient and problematic when the number of contracts increased. Mistakes occur when documents are misplaced, out-of-date documents are distributed, deadlines are not met, and confidential terms are exposed.
But with the use of a state-of-the-art contract management tool, the process is now made more efficient through a structured, automated, and collaborative approach. In the sections below, the five processes that the tool can automate, and why they matter in the context of expanding a business, are discussed.
1. Creating Order out of Contract Chaos through Centralization of Organization
Among the processes with the greatest immediacy in being made easier by contract management tools is contract.webp?width=300&height=300&name=Untitled%20design%20(22).webp)
organization. An efficient contract management system should have an organized structure that can easily be accessed and should be dependable. Otherwise, even the most competent teams are not able to have efficient contract management.
In the conventional system, the contracts are disorganized in various locations. Some contracts are saved in shared drives, while others are sent along with emails. The contracts that are not needed daily are kept in file cabinets or archive folders. The disadvantage of this system is that there are difficulties in accessing the relevant contract at the right time, which can lead to the use of the wrong version of the contract.
Contract management software creates a single centralized contract repository, solving this problem. A cloud-based platform such as Microsoft SharePoint builds this repository-a source of truth for all contracts and related data. Every agreement is stored securely in one place, eliminating confusion and duplication.
As these contracts are uploaded onto the system, they can be classified into various categories based on agreement type, department, client, vendor, or any other required categorization. Metadata tagging means users can identify a contract with key information like effective dates, renewal terms, contract value, and law governing it. This structured approach means information is not only stored but intelligently organized.
Advanced search and filtering capabilities further streamline this process. Teams no longer need to manually scan folders or spreadsheets to find a specific clause or contract. In fact, even rarely used provisions can be located in seconds, which saves valuable time and reduces frustration.
Additionally, another crucial advantage of organizing in a centralized manner is the decreased dependence on spreadsheets. Although spreadsheets could be considered simple and convenient, they are extremely vulnerable to human error. The greater the complexity of the contracts, the greater the likelihood of overwritten data, lack of visibility, and inconsistency. The contract management software is structured to counter this weakness by being scaleable and robust enough to process vast amounts of data and accompanying contract information.
Through this optimization of contract organization, organizations are able to build a solid foundation that benefits all other steps in the contract management process. Uncertainty gives way to clarity, and everyone can be confident in the accuracy of their information sources.
2. Acceleration of Collaboration, Approvals, and Decision-Making
Contracts seldom have one department managing the agreement. Legal, procurement, sales, finance, and operations, as well as executive teams, get involved at different points in the life cycle of an agreement. Collaborative work is one of the most important tasks made easier as a function of contract management software.
Without the proper equipment, the process of collaboration becomes an bottleneck. Contracts are exchanged through emails, feedback is scattered everywhere in the emails, and versions become a constant headache. Feedback is overlooked, modifications are wiped out, and the time frame for approvals becomes much longer than expected.
Contract management systems change all that by allowing collaboration to be conducted in an organized manner through an internet-based platform. When contracts are evaluated within the contract management system, it allows all parties to access the contract at the same time irrespective of their location and the gadget that they use in today’s hybrid workplace setup.
Version tracking is important in smoothing the way to collaboration. Every edit is recorded so that the most recent version of the contract is always at hand. There is no more time wasted by teams over which version is the final one or correcting the errors caused by outdated files.
More efficiency arises from workflow automation. Approval routes can be set in advance, based on either the contract type or its value, or even its risk level. Rather than manually chasing approvers, the system can send contracts to the right person at the right time. Notifications and alerts keep everyone informed, avoiding delays and ensuring accountability.
The built-in features like redlining, integrations with emails, and "@" mentions in turn will let the reviewers communicate with clarity within the context of the contract itself during negotiations. This eliminates ambiguity, making sure discussions are documented and traceable.
This, in turn, greatly reduces turnaround times by streamlining collaboration and approvals. Deals move faster, internal teams stay aligned, and decision-making is more confident and informed.
3. Enhancing Security, Compliance, and Risk Management
Contracts house the most critical information within an organization. This includes the price, intellectual property,.webp?width=300&height=300&name=Untitled%20design%20(29).webp)
regulatory requirements, as well as any confidential business information. Among the most crucial processes made easier by contract management tools is the security and compliance function.
Contract management systems that are manually organized pose risks for any business. Contracts accessed from unencrypted drives or transmitted via email are exposed to hacking and breaches. There may also be difficulties when there is no visibility or audit trail on who accessed or edited the contract.
A contract management solution developed on Microsoft 365 and SharePoint relies on the robust security offered by enterprises to secure contract information. Encryption, cloud security, and regular monitoring of information help to safeguard it throughout its lifetime.
Permissions-based Access Control is an essential element of this process. Not all employees must have access to all contracts. Permissions within roles mean that administrators can now assign those responsible for viewing, editing, or approving individual documents. This way, confidentiality is maintained and collaboration achieved where necessary.
Another safeguard is the use of audit trails. Each and every event carried out on the contract is tracked, allowing there to be a comprehensible trail of any changes, approvals, and/or accesses.
Cloud storage and backups of contracts will ensure that contracts are never lost, not even in the case of technological breakdowns. This will ensure that contracts can be accessed when needed.
The contract management software reduces risks associated with security and compliance by simplifying the processes. Instead of responding to risks after they have occurred, the software enables organizations to have power over the processes that ensure stability.
4. Avoidance of Overdue Deadlines due to Intelligent Renewal Management
One area where contract management is usually overlooked is in renewals, although such areas carry significant financial and legal consequences. The tracking of contract renewals and obligations is one of the most valuable processes streamlined by contract management software.
It is easy to overlook renewal dates or deadlines in busy organizations that handle a large volume of contracts. As a result of this oversight, businesses might automatically renew contracts with unfavorable terms, lose their leverage in negotiations, or experience service disruptions.
Contract management software helps solve this problem by sending automated reminders and notifications. Dates for renewals, expirations, and notice periods are tracked centrally and monitored for continuous insight. Notification is well in advance of these events, so teams have sufficient time to review the terms to make informed decisions.
Such notifications can also be allocated to particular members of the team, thereby encouraging responsibility and positive response. The need for manual calendars or spreadsheets will be eliminated because reminders will be provided.
In addition to contract renewal, the software is utilized in the management of the resultant obligations. These include the management of performance milestones, compliance, and service level agreements. All of these ensure the optimal delivery of the contract and the early mitigation of threats.
The process of renewing a contract is simplified, and the company has control over its contracts. The company identifies areas for negotiations and does not encounter any surprises in terms of cost.
5. Linking Contracts to Business Operations
Contracts do not operate in a vacuum. Contracts impact and enable a whole host of business processes that.webp?width=300&height=300&name=Untitled%20design%20(35).webp)
companies perform today such as customer relationship management and vendor performance and financial management. One of the most critical business processes that has been optimized by contracts management software is contracts integration with all business processes.
With disparate contract data, analytics on performance or risk are impossible. These decisions are made with incomplete knowledge about the contract performance or potential.
Today, contract management systems act as a hub that enables contracts to be integrated into other business systems. This integration allows contract data to be synchronized with customer data, vendor data, and financial data.
This provides greater visibility into how contracts affect revenue, costs, and relationships. Leadership teams gain insights to drive strategic planning and scalable growth.
By stabilizing and smoothing out these interdependent processes, contract management software equips businesses to expand with confidence. Contracts become a source of intelligence rather than an administrative burden.
Conclusion
The five processes that are made easier through contract management software illustrate just how valuable it can be. Contract management software simplifies everything from organizing and collaboration through security, renewal automation, and alignment.
As the contract volume continues to rise, manual systems become less and less feasible. Businesses that seek to grow effectively need to invest in technology that enables accuracy, visibility, and automation.
As Microsoft Partners, Dock 365 has been specializing in assisting businesses in utilizing SharePoint and Microsoft 365 to revolutionize contract management. The Dock 365 Contract Management System has been developed to enhance compliance, unblock potential bottlenecks, manage risk effectively, and increase productivity through a collaborative and secured environment.
Prepared to give your business a contract management overhaul?
To ensure your contract management process stands out with a superior contract management solution, it is imperative to identify a contract management system designed to be scale-friendly and collaborative.
