They say that, in business, you have to spend money to make money – and case studies have shown that this is never more true than in the way your contracting processes function. The way in which your business handles its contracting processes is one of the most fundamental parts of your operation. Whatever your industry, and whatever your objectives, your contracts have significant financial and legal implications, and their effective management is vital to your overall success.
Contract Management software may seem like an obvious choice for large corporations – particularly those with international business operations that must take into account law and regulatory requirements in a variety of overseas territories – but the fact is that this digital solution is simply the best practice for businesses of all sizes and types, because it leads to huge savings from an overall reduction of operating costs.
How does Contract Management software help you make savings? It achieves this for you by streamlining your operation to the point that savings are made across the board, in a variety of ways.
Reduce staff requirements
Your staff is among your most valuable assets, so freeing them up to be productive in other areas can only benefit your operation in the long term. The manual management of your contracts is a time-consuming effort that requires the undivided attention of employees whose talents and training could be better utilised elsewhere. By bringing a high degree of automation into the process, your team can be deployed in a more efficient manner. It provides you with a new system, in which fewer employees oversee an unlimited number of contracts.
Increase project control
Keeping a tighter rein on your projects can lead to big budgetary savings and, since effective Contract Management should always precede procurement, these savings can be made right from the very start of project activities. Automated notification systems, along with features that allow for expedited contract negotiation and electronic signatures can help keep even the most complex projects moving, ensuring they stay on track and that the necessary milestones are met in a timely fashion.
Lower storage costs
The manual management of contracts, for companies of any size, requires a significant storage commitment. To properly store each contract and associated project paperwork, you need storage facilities and physical space in which to keep it. This leads to higher premises fees, as well as the cost of materials and storage units. Switching to digital storage immediately cuts all of those costs from your budget. In addition, digital storage improves secure access to contract and project information – something that provides further reduction in pressures on staff time.
Less physical resources used
By using a digital Contract Management solution, and reducing the number of physical resources used in the Contract Management process, your operation becomes a more environmentally friendly business. There are a great many savings to be had on the basis of being eco-friendly, and also numerous financial incentives of which you can take advantage.
Faster project turnarounds
As a consequence of streamlining your Contract Management systems, your projects can be turned around in shorter timeframes, saving money and resources. Easier, streamlined Contract Management means you can also have more projects progressing concurrently since the staff is freed up from the manual management of documentation. Your projects are also no longer constrained by the process of distributing physical contracts for review, negotiation, and signature. This means a great deal more can be achieved in less time, and the opportunities for greater profitability are significantly increased.
Reduced exposure to legal risk
Tighter control, standardization, and automated notification systems mean that there is less exposure to potentially expensive legal risks. Regardless of how highly trained and reliable, your staff is, the fact remains that having a contract system that is manually administered increases the likelihood of human error. Document omissions, delayed distribution, incorrect storage and filing, and missed milestones can all result in reputational damage, tensions in client or partner relations, and legal action. Such consequences can be costly in both the short and long term view – negatively impacting future business and, in extreme cases, business insurance availability and prices. These circumstances are avoided with the successful implementation of Contract Management software.
Short-term effort for long-term gains
Businesses of all types are likely to use a variety of contracts – from employment contracts to sales contracts; from procurement contracts to non-disclosure agreements. With contracts already in place, the idea of switching from manual Contract Management to an automated process can be daunting. The key to successful implementation is in a phased, responsive roll-out that targets one type of contract at a time.
With today’s technologies, the phased implementation process for Contract Management Software can be relatively pain-free, and any additional efforts required in the short-term are far outweighed by the gains to be made in the long term. While each implementation is different – tailored to the structure and nature of the business – each provides the opportunity to completely overhaul and improve the contracting procedure. It is the chance to refine and consolidate the types of contracts your business uses, which is an area that can easily spin out of control in a contract system that has, historically, been manually managed. It is also a chance to standardize terminology, and terms and conditions – bringing even your longest standing contracts right up to date.
This is perhaps the aspect of Contract Management software implementation that provides the most significant long-term gain. The prompt to perform an effective review of the contracting processes of your business - while initially a large and detailed job – brings your entire operation into alignment, and provides vital clarity to employees and third parties alike. Such clarity ensures that all future handovers – of individual projects or even staff roles – happen smoothly, and with a forward-focused transition period. Indeed, with greater clarity come greater protections, and that is surely the most important long-term gain of all.