Contract Management System For Operational Efficiency & Transparency

There’s not a single business that cannot use a boost in efficiency, productivity, and transparency, given the current market’s state. Luckily, all three of these can be achieved in one stroke. The answer is implementing a contract management system for operational efficiency and transparency. You might be wondering how such a system could achieve so much. To understand this, let's visit a few basic concepts first.

What is operational efficiency?

Operational efficiency refers to a team's capacity to deliver a high-quality end product while utilizing fewer resources. It is gauged through an "efficiency ratio" that compares the inputs or resources invested in a project with the outputs or the results obtained.

Operational efficiency vs. operational productivity

The distinction between operational efficiency and operational productivity lies in their respective meanings. Operational efficiency refers to producing the same output while utilizing fewer resources. In contrast, operational productivity refers to generating more output using the same resources.

The basic steps for optimizing operational efficiency

1. Establish a KPI baseline

The initial step involves identifying the team's primary functions that you wish to optimize. This entails determining the team's goals and the key performance indicators (KPIs) or regularly monitored metrics. By obtaining this information, you can establish a baseline output for the team, which will be the foundation for calculating operational efficiency.

2. Standardization

Take a close look at your current business operations and observe how team members are executing their tasks. Is there any task redundancy? Are there any bottlenecks in the current process? Are all the team members working in the own way? If the answer is yes then you need to create standardized business processes to reduce the repeated tasks and save cost on resource utilization.

3. Track workload and setup new goals

Start by listing down the workload and then prioritizing tasks based on their importance and urgency. This will help you allocate resources efficiently and ensure that the team is working on the most critical tasks first. Additionally, setting new goals based on the team's capabilities and workload can help drive productivity and focus.

Operational risks of contract mismanagement

When you leave it to chance, your contract management system soon becomes a liability. After all, there’s no business you can do without signing a contract with someone. If just one of those contracts is not dealt with properly, your company is at risk of financial loss. This loss isn’t always direct, of course, but chances are you’ll feel it somewhere down the line. 

Here are just some of the potential operational risks of a poor contract management system:

• Missed deadlines
• Damaged customer relationships
• Damaged reputation
• Unexpected costs
• Legal consequences

The only way to avoid such risks is to improve the operational efficiency and transparency of your contract management system. These days, this is something a lot of businesses are coming to realize. According to World Commerce & Contracting:

• 84% are experiencing pressure to simplify contract management
• 65% are focusing on improved communication
• 81% are planning to implement some form of contract automation

Trends like these rarely take off for no reason. When you’re looking to develop a contract management system for operational efficiency and transparency, automation and integration are the keys for success. 

The benefits of integration and operations workflow automation

It’s not just the reduction of risk that you can accomplish by avoiding contract mismanagement. Contract management systems that are developed with integration and operations workflow automation in mind allow easy achievement of the following three goals:  

• Increase in efficiency and cost reduction
• Boost in productivity and sales growth
• Improvement in transparency and overall workflow ecosystem refinement

You might be wondering how a single platform can bring about so many positive changes. The truth is, this makes a lot of sense. You only need to be aware of the crucial features of a contract management system built for operational efficiency and transparency.

Increase in efficiency and cost reduction

When your employees spend less time on tasks that have to do with contracts, your business gets more room to grow. But what exactly does it entail when it comes to an operations workflow automation?

• Switching from paper-based filing systems to digital storage
• Allowing for secure centralized access to all relevant documents and templates
• Introduction of rule-based logic to substitute manual handling and organization

Thanks to these features, you can forget about costs dictated by paper-based systems. You can also minimize the time spent on locating paperwork, creating contracts, missing deadlines etc. As a result, your company has fewer costs and your employees complete tasks more efficiently.

Boosting productivity and growing sales

When your company has all the tools needed to speed up its contract management processes, things get done a lot faster. Here are only a few features of Contractbook’s software that allow this to happen:

• Switching to secure browser-based access to all relevant documents and templates
• Allowing for closer contract lifecycle and milestone monitoring
• Using the system to monitor the business’ contact base

Once you introduce features like this, your employees can identify new sales opportunities more quickly and efficiently. They can create and sign contracts on the go, while the lifecycle of each of them can be shortened. This, in turn, creates room for creating relationships with new clients and celebrating deals. 

Improve transparency and overall workflow ecosystem refinement

When there’s transparency within your company, the chances of your business growing improves significantly. A contract management system built for operational efficiency and transparency achieves exactly this. Listed here are some features that make this possible: 

• Switching from multiple filing locations to a centralized digital repository
• Activity tracking and task management
• Creation of customized reports

When everything is closely monitored and reported on, you get the opportunity to improve both your system and bottom line.

Contract management best practices

There are many benefits to using a contract management system built for operational efficiency and transparency. The only question left to answer is how to shortlist the best platform for this purpose. A quality contract management system comes packed with the following features:

1. Centralized repository
2. Standardized language and templates
3. Detailed processes
4. Compliance checks
5. Team collaboration 
6. Integration with other business systems
7. Customizable reporting

1. Centralized repository

There are many contract management best practices. Number one would be to make sure all your contracts and other relevant documents are stored in a single location. Ideally, this would be a digital repository. A centralized repository has many benefits, including improved transparency and less time wasted tracking and organizing files. 

2. Standardized language and templates

If you want to reduce operational costs, make it easier for your employees to do paperwork and draft contracts. The simplest solution is to introduce standardized language and templates. All of a sudden, there’s no need to rethink this paragraph or draft each contract from scratch. In one stroke, this solution frees up countless hours that are being spent working on contracts.   

3. Detailed processes

When you give them no clear guidelines, you run the risk of your employees mismanaging your contracts. Important milestones never get actioned and, ultimately, new business never gets acquired. That’s why you should develop and implement clear and detailed processes for everything that needs to get done.

4. Team collaboration

When there’s no communication between team members, the productivity of the team itself suffers. The lack of communication can even lead to more serious problems, such as missed deadlines. Luckily, you can easily avoid this by dedicating one of your communication channels to team collaboration.

5. Integration with the organizational structure

It’s not enough to have a centralized repository and give all your employees access to it. To really follow contract management best practices, there’s one more thing you can do. You need to make sure it’s part of your organizational structure in general.

6. Customizable reporting

Last but not least, if you want the option to improve your system, you’ll need to collect and analyze data. Customizable reporting is the only way to gain valuable business insights on both your own processes and your potential partners.

Easiest way to achieve operational efficiency and transparency

Of course, the easiest way to achieve all the benefits of a contract management system is not to build it yourself. It’s to take advantage of a software that specializes in operational efficiency and transparency. Contractbook offers all features aimed at achieving these goals. From a centralized digital repository and a standardized template library to 3000+ integrations with your collaboration tools and data syncing/contract tracking functions, we have them all covered. So, if you want to increase efficiency, productivity, and transparency, get in touch with our automation experts.

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