If a business is looking to expand and deal with a higher volume of contracts in the future, they usually look to implement contract management software. This type of system has many different advantages for business leaders. They can take control of a poorly managed process, or identify contracting events which waste time and money or can harm the organization.
Contract management software also allows organizations to solve other problems, like unknown auto-renews, or to lose vendor agreements.
Reasons why Organizations May Ditch Manual Contract Management
Contracts Accessible from Anywhere
As many as 85% of organizations still track their contracts manually, while 80% admit to finding it difficult actually to find an existing contract. Without using contract management software, contracts are usually stored in many different places, like filing cabinets, email inboxes and shared drives, making them difficult to locate. And even if someone knows where a contract is located, that contract cannot always be accessed. By using contract management software, this issue is eliminated. Essential documents are easily accessible and can even be accessed remotely. This is useful for staff who are working from home. Contract management software can also help ease the pressure on legal departments because less disruption means that they have to deal with fewer content related enquiries.
Agreements Become More Visible
Within an organization, it makes sense for certain people to control the contracting process so that any questions from other staff or stakeholders can be quickly and correctly answered. If contracts are being manually managed, there is a risk of staff not being able to answer certain questions they're being asked. Plus, gaining a high-level overview of a contract portfolio becomes more complicated when managing contracts manually. Decision making becomes somewhat clouded because the information is not stored in one central location. This means that staff do not have a full understanding of how other agreements are impacted. Online contract management contains reporting functionality so the entire team can gather the information they need. Contract management software enables portfolios to be more easily managed, because everything is stored in the same place, and is accessible from virtually anywhere. This means that renegotiation and restructuring can commence pretty much straight away. By keeping contract information online, finding specific content becomes more straightforward, which is particularly important when managing old agreements.
Elimination of Lengthy and Tedious Processes
Manually dealing with contracts can be very time consuming, as employees need to invest more time in trivial, low-level tasks. For example, deadlines, key dates and obligations all need to be monitored, to keep the agreements in good standing.
However, thanks to contract management software, it no longer needs to be this way. Tasks can be automated, while repetitive and tedious tasks can be eliminated, which helps improve team efficiency. No longer do staff have to waste time searching through keywords and clauses or manually track deadlines. Instead, teams can focus on essential and high-value business activities.
Chances to Improve Revenue but Lower Risk and Cost
All contracts require continual review so that they are renewed at the correct time. Arrangements should not just be left to auto-renew. They might not be performing as well as they should be, changes might need to be made to comply with new regulations, or terms may need to be renegotiated. The risk of missing a deadline is much greater when manual contract management is used, which costs organizations both time and money. Automated contract management includes features such as calendar reminders and written notes which help lower the chances of oversight or human error. When agreements are stored online, all essential details are visible, and so staff can take the right action at the right time. Reporting is automatic, so important information is sent directly to the recipient's inbox, so they can keep an eye on contracts which are due to expire. Other features which prevent important contracts from auto-renewing are calendar alerts and digital notes. Such features help staff avoid making mistakes, which can be detrimental to their organization's reputation.
More Opportunities for Accelerated Business Growth
If you happen to work with low risk or low-value contracts, then storing them on different systems, or tracking them using spreadsheets might be a viable solution. But what if this was to change in future? This type of approach cannot be scaled. Even if you have robust systems in place, managing contracts is still a job that requires much attention to detail, time and hard work. As such, manually managing lots of contracts is pretty much an impossibility, and the need for proper control becomes even more critical. One of the top reasons why businesses may switch to contract management software is that they are experiencing rapid growth. With this in mind, small or medium-sized businesses should consider their current resources and processes, to determine whether they are capable of meeting future demand, or if they need to make changes.
Why Contract Management Software is Better than Manual Contract Management
Although some businesses are complacent in using manual contract management, for others, this is not an option. Particularly for businesses dealing with more and more high risk or valuable contracts.
Contract management software has lots of advantages over manual contract management.
Everything is kept centrally accessible, and information can be accessed offsite. Because staff can gain high-level insight into an entire contract portfolio, decision making often becomes more manageable, because interconnections between other contracts can be more easily determined.
Reporting features within contract management software enables information to be compiled much more quickly, which means that negotiation and restructuring become much quicker. Staff have more time to concentrate on essential business activities, and unwanted auto-renew is less likely to happen, which saves both time and money.
Overall, staff are less prone to oversight or making errors. Instead, they can take the most appropriate action, as all-important contract details are visible in one place. Employee tasks are made easier thanks to calendar alerts and digital notes, which can also help with managing auto-renewals. Using such features, staff can better manage the auto-renewal process, rather than merely allowing it to take place which can damage your organization.