An Introduction to Contract Management
Contract management software is developing from a nice-to-have to a need-to-have. The advantages of implementing a contract management software are plenty. Learn more about what to look out for here.
Contract management software: The future and the now
Contracts are business-critical to most organisations. Not only are they necessary to reduce risk, prevent conflicts and ensure compliance with the current legislation. They are also an extremely valuable asset. Studies show that contracts are the primary source of revenue and relationship-building to most business since they maintain a smooth collaboration and at the same time make your commercial activities binding and legally enforceable by serving as records of commitment. To sum it up, contracts are the foundation of your business.
And yet, contracts have not been treated as such assets. For too long, they have been stored unencrypted, kept unorganised in long email threads, and handled with unfit software if not in a physical, inefficient manner. An explanation for this is the misunderstood perception that contracts are “dead” documents, necessary evils, and boring risk-reducers that are only useful during legal disputes.
This perception is, however, beginning to change. The digital avant-garde has already adopted contract management software in order to ensure compliance and increase efficiency. They have realised that contracts are “living” documents that potentially can generate value through their entire lifecycle. All trends thus show that contract management software is going to develop from a nice-to-have to a need-to-have in the years to come. According to The Global Contract Management Association, Contract Management Software is the number one focus area in the Contract & Commercial Management Community. Evidently, studies suggest that 90 % of multinational global enterprises will use contract management software by 2023.
That is due to the fact that contract management tools have reached a high level of maturity in the sense of functionality. There is rapid development in the industry but already now, the advantages of implementing a contract management software are plenty.
Advantages of Contract Management
- You can reduce employee time-consumption significantly with drafting tools and automation. Even just using a simple digital signature can save you precious time.
- You can ensure compliance by having a clear overview of all active and inactive contracts. A well-organised data room ensures that deadlines are kept, tasks are solved and all GDPR-requirements are met. Furthermore, document review tools or just simple contract templates ensure that the contracts are up to standard.
- You can enhance your security by using state-of-the-art cloud-based services and store your documents encrypted. You do not even have to maintain the security implementations yourself.
- You can generate more value if you go from an operational approach to contracts to a more strategic approach. In a well-organised setup, you will never miss a deadline and always be on top of (re)negotiations. A shorter time-to-signature will most likely increase your closing-rate significantly.
- You can improve your performance by streamlining the data. Keep track of the outcome of your employees and get more insight into your most important trading partners. More organised data will also prepare you for all the promising opportunities of artificial intelligence.
- You can professionalise your current setup. Using a well-functioning contract management system gives you a modern aura when negotiating with partners, hiring new talent or closing sales deals. Contracts are relationship-builders and the younger, digital-native generations will expect contract management software of a professional business.
- You spare the environment. Keeping documents digital prevents unnecessary printing. Forests are for picnics, not paper.
The lesson is this: To claim that you are treating your contracts with the care and respect they deserve, and to make sure you get the most value of your agreements, you must take the opportunity to invest in and implement a modern contract management software. Preferably one that covers the entire lifecycle of the contract.
Here is why!