There has a been a lot of discussion recently over Contract Management and the role it has to play in contract management and the mitigation of risk in the future. The last year has been a wakeup call to many businesses that their current management practices are not fit for purpose, especially in the advent of a crisis such as the Covid-19 pandemic. As such, businesses and organizations are turning to contract management software, provided by companies such as Symfact. Digitization is driving technology forward and as such, here are some trends to look out for in 2021.
Businesses who adapt to changing situations are the ones that are successful, however, it is always better to be prepared than to react and this last year has outlined the importance of being able to keep your operations running with minimal disruption under critical circumstances.
Contract management systems have given a framework to businesses and the tools required to allow better governance their workflows and ensure compliance throughout the pandemic, enabling them to respond more quickly to the challenges posed and the issues that have arisen regarding contracts, supply chains and deliverables.
Amendments and clauses to contracts have been a big talking point, with many companies not being able to negotiate changes due to poor communication or relationships with their third-party vendors. Businesses are now looking toward automated contract management systems to provide visibility and accessibility to vendors, without compromising security. By providing an environment that allows KPI’s, contract reviews and obligations to be monitored by all involved, you can improve working relationships and help the contract management process to run as smoothly as possible even when faced with exceptional circumstances similar to the past year.
We can expect to see business continuity as a buzz phrase in the coming year as contract management software providers continue to improve their technology to help businesses be fully equipped to deal with any future global changes like the ones experienced in the past year.
With the onset of a global pandemic, one of the main benefits to CLM software during this time proved to be that the majority are browser based. With remote working looking to be the trend throughout 2021, having a contract management system that is based online is becoming essential. As many employees adapted to remote working and with countries across the world under sanctions and lockdowns, access to everything employees required without having to leave the safety of their home has been a big advantage for a lot of businesses. Having all the information and contracts available online with an advanced search functionality, ensures constant access to precise information to all employees. This has also ensured less business disruption to contract management, so integrating CLM software will become a useful tool in 2021 for businesses with employees continuing to work from home.
A.I & Machine Learning
Automation is well known for the streamlining of processes and increasing efficiency and productivity, especially in regards to repetitive manual tasks and procedures in a contract lifecycle. Automation can improve contract management and mitigate risk. As technology and knowledge expands, the natural successor to automation was always going to artificial intelligence. AI and machine learning has been around for a while, but is beginning to seep more into business consciousness, and although AI and it’s integration is far from the finished article, it is has benefits to the future of contract management and we will be hearing more about it during 2021.
Machine Learning is a part of artificial intelligence that is being integrated into future contract management software. Algorithms can be shown examples of data, language for example, and the algorithm learns this data and identifies any patterns. This can then be used to analyse contracts and agreements for specific language, opportunities and risk. By using AI and machine learning to analyse and adapt to changing regulations and assessing complex contracts, it could have a significant transformative effect on if it continues to develop. Especially for legal departments and compliance and procurement teams, by helping to optimise management strategies and minimise risk whilst analysing and solving contracting issues before or as they arise.
Data Privacy & Compliance
With the current trend of digitization and with documentation moving online in this age of the pandemic, it is imperative as a business that you have data security in place across your business. Security and data breaches are predominately due to simple employee error when exchanging information. However, due to an increase in cyber-attacks, governments and organizations across the world are continually improving and adding data protection regulations. GDPR meant an increased focus on data privacy and that trend has continued into 2021. Stopping data breaches and ensuring compliance with changing legislation should be a high priority for businesses as the year goes on. As regulatory and policy compliance is vital for consumer/client trust, manually trying to manage the changing legal landscape is proving a complex task for compliance and legal teams, with many businesses now looking at contract management software to provide an efficient solution.
For example, contract management software can provide:
- A permission based access control interface like the one Symfact uses, is a must for business. Providing log in restrictions, you can restrict access as and when you need to, with permission only given by authorized persons.
- Most companies will have secure data encryption, with some offering two-factor authentication.
- If a Contract Management System company offers hosted solutions, you can select the location of your server and therefore data, depending on your legislative and jurisdictional requirements, and these are protected by the latest encryption technologies.
- Due to features being automated, such as document storage, it uses less human resource, reducing the risk of an accidental data breach.
As evidenced with the increased use of e-signatures over the past year, though admittedly Covid and the shift to remote working having a heavy influence on the uptake of this software tool, digital identification is fast becoming the normality for many businesses and organizations. And with good reason, as documentation and data are being moved online, it has become imperative to have digital solutions to improve security and ensure data privacy. This technology means that authentication of any persons involved in the contract management process, from employees to vendors, not only increases the time and efficiency of said process but can also provide an extra layer of protection for your business.
With ever-changing regulations and the passing of sensitive information, compliance officers will find digital identification a useful tool, especially with the growing number of employees working from home and issues surrounding accessibility. If you are a business looking to get around this problem, it is useful to look for solutions with a configurable access-control interface like the one from Symfact, which you can combine with digital ID to allow and restrict access as and when you need to.
Clients, stakeholders and third parties are more likely to trust organizations with digital verification, so as we go through 2021, expect digital ID to expand at the same rate or quicker as digitization in other areas of contract management.
With climate change a hot trend, the past year has seen a rise in businesses seeking to take some corporate responsibility for the environment. Due to the continuing climate crisis, this is a trend that is only set to increase during 2021. This may be because of the threat climate change may pose, with 215 of the largest companies now accepting the effect it may have on future business, as reported by the CDP. As such, a lot of clients and customers are now being attracted to companies that have better eco-credentials and are seen as being “green” and businesses are adopting climate-aware contracting, ensuring all your clauses in contracts are compliant with climate regulations. If one of your business aims for this year is to be more eco-friendly then implementing contract management software can actually help your business reduce your carbon footprint in 2021.
- Due to the centralization of Contract Management Software, you can track agreements and keep contracts and information digitally stored, negating the need for a paper trail and so reducing both your usage and waste.
- With the advanced technology currently available, contracts are being moved online and most companies are becoming paperless. E-signature integration in the software makes it easy to collect and store signatures and reduces the amount of paperwork, helping the environment as well as adding an extra level of security.
As digitization moves forward, contract management should not be left behind. By adopting the latest and future trends, you ensure your business is at the forefront of technology advances in contract management, integrating best practices across the board and optimising your business potential. If you want to start implementing any of the trends mentioned in the article, then contact Symfact today to discuss moving your business or organisation forward.