If you do not currently use a contract management system, you are leaving so much on the table. Not only are you missing out on potential business opportunities, but you run some very serious operational risks.
Do you encounter the same bottlenecks and problems during contract lifecycles? Let's take a look at some of the biggest risks of contract mismanagement, and then we will explore a bit more into how a contract management system can help your business or organization.
Without operational standards and systemization in place, you increase the liability of your contract management practices. The last thing you want is to incur financial penalties caused by a lack of compliance, breaches in data security, and the repercussions of other operational risks. In the case that a single contract is improperly managed, you run the risk of detrimental financial penalties that can be hard to recover from. It's necessary to note that word of mouth travels exceptionally fast. You may even find your business reputation to be harmed, which is never a good thing if you wish to scale and grow! And while risky contract management procedures might feel like the cheaper option, down the road, you're more than likely going to feel the negative impacts of your risky contracts.
So, what exactly are the main operational risks of a subpar contract management system?
Take a look at the following list below:
Clearly, you want to avoid these risks as much as possible. The most intelligent way to mitigate these risks is by leveraging contract management software that is both efficient and transparent. Industry leaders and organizations are coming to terms with their reality that risky contract management should be a thing of the past. World Commerce & Contracting reports that:
Today's contract management solutions are typically equipped with business integrations and automation capabilities. These are absolute essentials for designing a contract management system that puts operational efficiency and contract visibility as a priority.
Let's take a look at the main advantages of contract workflow automation and integrations.
You’re probably curious as to how this could be possible with a single piece of software. Let’s learn more about the capabilities of a contract management system built just for these key advantages.
The sole purpose of contract workflow automation is to help your employees save time by taking care of the low level, regularly occurring contract tasks. With contract workflow automation, you will leverage digital contract storage as opposed to manual, paper-based contract storage. You’ll also use a centralized, cloud-secure contract repository that authorized users can access at any time, any place, on any device.
No need to worry about the extra costs associated with paper-based contract management. You’ll cut down on time needed to find contracts and build contracts, as well as recover the time lost from missed and forgotten deadlines. You’ll have fewer overall costs to take care of and you’ll make processes easier for your employees, meaning they’ll be able to complete tasks more efficiently.
With all the tools needed to expedite the contract lifecycle, you’ll be well on your way to better sales and faster contract lifecycles.
Contract management software built with a centralized collaboration suite, cloud-based access, milestone and obligation tracking, vendor scorecards, and other capabilities can support you in capitalizing upon new business opportunities. Employ electronic signatures so parties can take contracts on the go, reducing the time of the contract lifecycle by expediting the signing phase. Shorter lifecycles mean more room for new customers, as well as more contracts executed in the same time period. Contract management software can also enable appropriate levels of visibility and transparency in your organization, allowing you to boost the likelihood for growth.
There are several advantages to using a contract management system, but it’s necessary to understand how to configure it for best results. You should look for a high-quality solution that offers:
A cloud-based digital contract repository
Leveraging a contract repository built on a cloud infrastructure ensures that your contracts are accessible to only authorized users at any time, from any place, on any digital device. By storing your contracts in a digital repository, you improve transparency and increase the ease of locating, tracking, and categorize your contract files.
Preapproved contract templates
Contract templates truly shine when it comes to cutting down unnecessary operational costs. With preapproved contract templates, you can make it easier for teams to complete contract management responsibilities and create legally compliant contracts. Standardization of clauses ensures every contract is authored with only the most current, compliant legal language. This helps to save numerous hours typically spent drafting contracts from scratch.
Without effective interorganizational communication, productivity certainly has the potential to slip. Negligible communication results in missed deadlines, forgotten obligations, and failure to follow through on contractual terms. However, you can mitigate these negative items by adopting a contract management solution inclusive of Microsoft Teams, allowing users to configure dedicated communication chats and channels to conduct contract management-focused discussions.
A contract management system best suited for maximum efficiency and results will include leading integrations for customer relations management, vendor and supplier management, electronic signature, data analytics, and other digital business solutions. For example, Dock 365 is integrated with Microsoft Office 365 products like Teams, SharePoint, and Power BI. In addition, we are integrated with leaders in the electronic signature space, like DocuSign, Adobe Sign, and Sertifi.
To improve operational efficiency, you must first know where inefficiencies exist within your current contract management procedures and protocols. Generate custom reports according to user-specific contract metadata points and share reports on an automated schedule with stakeholders and high-level management to increase visibility. With the ability to gather and assess contract data in detail, you gain comprehensive insights into the strengths and weaknesses of your current contract management strategies.
Productivity is always of the highest importance within any commercial enterprise. Productivity is able to analyze, measured, and maximized to improve processes and gain better results. According to your organization’s unique objectives and needs, employee output is always connected to profit, scalability, and return on your investment.
The reason productivity plays such a fundamental role in any organization is due to how it enables an increase in financial results. Productivity is a much more complex concept than what it seems, as achieving ideal levels of productivity within any given organization can be an enormous task to achieve. Innovation, workplace communication, synchronistic collaboration, and interorganizational efficiency are all components central to workplace productivity.
Operational efficiency primarily focuses on decreasing inputs by streamlining and optimizing internal systems. This means that an efficient workplace ideal for contract management is one that allows your employees to extract more value out of their efforts and achieve the same (or better) results while reducing input – all of which result in saved time, and thus, increased savings and availability of resources.
Productivity prioritizes increasing outputs, efficiency prioritizes decreasing inputs, and doing both in a manner that maintains or improves the current rate of results. Each component directly impacts the other, driving your organization’s bottom line.
Let’s discuss how in a bit more detail below.
First and foremost, you must address the current state of your contract management system. Every business and organization rely on contracts in some manner, and many are weary to leave traditional, manual contract management methods behind. This might look like using spreadsheets to track obligations, using physical calendars to oversee contract expiry dates and deadlines, or using filing cabinets and shared drives to store your contracts and associated files. Consider your current business operations in comparison to the way your systems and processes were during the beginning phases of your business. What has changed and why? Certainly, some systems have changed to adapt to shifts in the business landscape, digital marketplace, and unique demands placed on your business. While scalability and growth are never linear, improving your internal operations, processes, and systems can help you expand and scale consistently over an extended period of time.
Without a comprehensive review of all of your contract management practices and procedures, you run the risk of losing opportunities due to a suboptimal contract management system. Many organizations settle for less than stellar contract management operations when there is a better way available that supports you in extracting the absolute most value out of every agreement. By reviewing your contract management with the goal of optimizing and streamlining systems, it becomes increasingly evident that adopting a dedicated contract management software solution is a non-negotiable option if you want to maximize operational efficiency.
Contracts are at the core of any business and organization in absolutely every industry. From non-profits organizations, to manufacturing conglomerates, contracts play an essential role in maintaining and governing every aspect. And within any organization exists a variety of departments that work together cohesively to achieve to goal and vision of the organization at large. Human resources, procurement, finance, sales, operations, and legal are just a few examples of departments commonly found within organizations that will all play a role in the development and management of contracts. Contracts additionally contain an exorbitant amount of untapped potential for positive return. This is solely due to how every agreement possesses the opportunity for increased sales, new deals, or the possibility to renegotiate and achieve even better deals. All of this in mind, it’s clear that the desire to increase operational efficiency within the confines of your organization’s contract management strategy is crucial for improved results and business success.
Standardization of procedures
Within a dedicated contract management software platform, you can design and organize a contract template library as well as a contract clause library. This ensures consistency over all of your contracts, allowing you to maintain the most current versions of legal language that are compliant with strict policies and industry standards. Not only does the standardization of a contract management software solution increase rates of compliance, but it also expedites contract drafting, approvals, and negotiations, meaning you can deliver and execute more contracts at faster speeds.
Leveraging comprehensive audit trails is a stellar feature offered by modern contract management solutions. Audit trails enable users to review complete time and date-stamped histories of any given agreement. You can review who accessed what document, what changes were made, and at what time the document was retrieved. This can increase the communication and collaboration between departments and streamline contract workflows.
Create secure channels of accessibility
Contracts must be accessible to authorized users whenever they need. A cloud-based contract management infrastructure empowers your users to retrieve contracts from the convenience of their own device while having peace of mind that the contract is secure at rest and in-transit through data encryption. We recommend that you adopt a contract platform that allows your remote employees to retrieve current contract files so they can continue to complete tasks on-the-go so long as they have an internet connection. This inevitably increases productivity and efficiency.
Every business desire to improve productivity and financial results. With optimization of internal systems by increasing efficiency and productivity, you can improve your bottom line. This results in cost savings and generating higher-quality contracts overall. To this end, contract management software is a perfect choice. Implementing an intuitive, easy to use contract management system into your organization can lead to impressive savings and advances in operational efficiency. Here is why:
Contract management software provides numerous ways to automate processes. This reduces the manual effort required from your internal departments to complete various tasks through the contract lifecycle. you’ll save time that is otherwise spent on administrative responsibilities and allow for better use of staff resources. You’ll save money by expediting your contract lifecycles, which is accomplished by the centralization of contract accessibility, utility of electronic signature integrations, and customizable contract workflow automation. Furthermore, digital contract storage eliminates costs associated with hard copy contracts and storage. A cloud secure contract management tenant additionally enables your teams to build contracts remotely, where they can self-service on agreements and continue with their tasks no matter where they are located. Contract management software is also equipped with competitive contract performance monitoring capabilities, where you can assess which agreements provided best results are which are best to terminate and prevent from rolling over into an automated renewal. In terms of risk management, contract management software offers standout tools. The optimized user and client experience provided by contract management software can minimize risks that lead to expensive legal fees and unnecessary financial repercussions. And lastly, adopting a software-supported approach to your contracts enables the opportunity to renegotiate renewing contracts and get the best deals possible.
Top-of-the-line contract management solutions available today not only increase operational efficiency but help drive business revenue. Through faster turnaround phases and efficient milestone and deadline monitoring, you expedite contracts and onboard more clients in less time. In addition, contract management software allows you to gain detailed insights into your customer base, equipping you with new opportunities for sales. Contract management software also increases positive public perception by enhancing the entire contract experience for clients, vendors, and suppliers. This can result in attracting new, high-value leads. Contract management software personifies that your organization prioritizes the compliance, quality, and results of every business agreement.
The commercial power of operational efficiency can keep clients coming back to your company for repeated business. Contract management software enables companies to unpack and generate new opportunities for revenue while maintaining a system fully customized to their unique objectives and business needs.