Tips to improve your contract management process

Contact management can be an arduous task for legal teams at enterprises that have to deal with multiple thousands of contracts. Just the fact that these teams need to keep a tab on clauses and deviations and ensure their organization stays compliant at all times can prove to be a mammoth task. Add to that the mundane work of contract authoring and you have a recipe for an inefficient, unproductive legal team.

Contracts, when managed well, are an asset to any organization. They help reduce risk, rev up the pace of the business, and can deliver true value. So, if you are looking to improve your contract management processes, here are a few tips that will help.

Standardized Templates

Imagine having to create a new contract every single time there is a requirement. If your company is still doing this, it needs to change. The easiest way of improving your contract lifecycle management process is by creating standarized templates.

Each organization has certain standard clauses that are a part of their contracts. Create a repository of these for different requirements and can have standardized language, clauses, and terms. This reduces room for error by eliminating the need to review the entire document every time a new contract is created. It also becomes easier for non-legal stakeholders to review and approve agreements.

Storage and Access

‍Once created and signed, store the contracts in a single safe place where they will remain secure and confidential. Then set up a protocol for granting access. That’s of course in the manual system. However, emerging technologies like document management systems and cloud repositories allow digital storage and remote access to these documents. When it comes to contracts though, access should be granted with caution.

Transparency and Collaboration

‍Business contracts have many stakeholders often with conflicting goals and priorities. Storing all the contracts in a single digital space allows these teams to access, monitor, and act upon the terms of the contract simultaneously. Not only can your legal team keep track of performance and compliance, but your procurement team can also monitor the performance from their perspective to make decisions on inventory levels and vendor on-boarding. Further, having a central contract repository facilitates the alignment of team goals.

Set up Alerts

‍Performance and compliance should br measured using KPIs (Key Performance Indicators). Besides, many contracts need regulatory compliance. Using a central contract repository and big data, you can not only track and monitor KPIs but also set internal and industry benchmarks that trigger actionable alerts for key stakeholders. This will ensure timely compliance, meet targets, and reduce the possibility of an inadvertent breach.

Integration of existing technology

‍There’s hardly a business today that does not make use of technology. Take a closer look at the technology you have already invested in, and see if you can integrate them for better contract management. For example, if your business involves procurement, make use of a contract management solution that can effortlessly exchange vendor information and invoice line items with your ERP platform for better vendor operations.

If you are contemplating further IT investment, ensure that the new technology syncs with what you already have. The best options have seamless integrations with ERP, CRM, P2P, S2P, Word, and any e-signature softwares.

Audits

‍Audits are easier when you have all your contacts in a single central repository. You can log your access, alerts, and other activities on the repository which means you can nail accountability.

Further, audits also give insights on vendor performance and customer satisfaction based on how well contract commitments are fulfilled and SLAs met. This helps organizatons take corrective actions, negotiate better, and improve profitability.

Improved Visibility‍

‍It’s ok to give every user a snapshot of the contract relevant to them but you should control how deep they can dig, what reports they can generate, and what they can edit. When stakeholders access the data they get an overall view with the option to gather more insights and generate reports based on their roles.

For instance, you may want to show the last delivered date, quantity, and value under your procurement contract, along with basic details like commencement and renewal dates, reorder quantity, reorder level, and so on. However, historical data regarding deliveries by a particular vendor may only be shown to those in management or decision-making roles. Such control will plug any leaks and mitigate any chance of error.

Businesses around the globe are now tightening up their contract management by investing in technology and process management.  If you want to derive true value from your contracts, they need to be managed well.