In the light of the ongoing Covid-19 pandemic, Contract Lifecycle Management has come into its own. With the continued negative impact on industries, businesses, and organisations, particularly where supply chains have been disrupted, poor CLM has been thrown into sharp relief. Whilst companies that had a successful Contract management solution in place before the pandemic hit have been at the forefront of demonstrating how to protect your businesses from risk. Especially as the term Force Majeure has now unfortunately become a common phrase in business circles.
With the majority of contracts not even mentioning the possibility of a pandemic crisis, concentrating on the everyday risks more likely to have a direct impact on the everyday running of the business, the implications of force majeure clauses came to the fore when borders started to close, and trade became disrupted. Something that should have been used as a last resort was now being argued over by contracted parties because a health crisis had not been clearly defined, with many force majeure provisions being used to suspend or end contracts. This has resulted in financial issues for a lot of businesses, especially ones operating in the services industry or ones reliant on a global supply chain. As such, going forward you would expect force majeure clauses to be higher on the priority list for many companies to help minimise the risk and protect their business from any future similar situations.
In terms of Contract management, it has proved key when dealing with the current crisis. Businesses that have intelligent solutions in place, such as the CLM software solution offered by Symfact, have fared far better than businesses using outdated systems. Automated contract management has given a framework to businesses to allow them to better govern their workflows and ensure compliance throughout the pandemic. Specific features of CLM systems have also given far more control to businesses, enabling them to respond more quickly to the challenges of a pandemic and the issues that have arisen regarding contracts, supply chains and deliverables.
All Contract Management systems have a central repository. With this system, you can store all contracts and the associated data and documents in an easily accessible, individual location. Businesses that had already implemented CLM software before the pandemic hit could use metadata to search through contracts for key words and clauses, especially searching for any contract with force majeure clauses and any that mentioned a pandemic crisis, helping employees to stay on top of the risk posed by Covid-19 to businesses and identifying the correct information and data critical to the situation. Due to the automation, this proved far easier than if they had to search either manually through paperwork, or documentation stored digitally across various sites and locations.
One of the main advantages to CLM software during this pandemic, is that the majority are browser based. Having a contract management system that is based online has become essential. With many employees working from home and much of the world still under sanctions and lockdowns, access to everything you need without having to go to the office has become a game-changer for a lot of businesses. Having all the information and contracts available online with an advanced search functionality reduces the risk of human error and gives constant access to precise information to all your employees, an essential asset given the increase in employees working from home due to the global pandemic. Businesses who adapt to changing situations are the ones that are successful, so integrating CLM software would be inherently useful to keep the contracting process from being delayed if remote working becomes the new normal.
There can be a lot of people involved when creating contracts and during the contract lifecycle, and keeping communication and visibility open with your contracted parties during situations like the Covid-19 pandemic can be key to successfully managing the challenges involved. With CLM software, you can communicate and unify data to any essential parties, whilst tracking any changes made to contracts. By automating this process, you can vastly reduce the amount of time it takes to approve and implement any contract amendments by using the e-signature feature within the software and receiving approval notifications, ensuring any of the processes involved are not slowed down by paperwork. Improving your communication can also help with legal accuracy and refine the expectations of all parties involved. This seems to be especially important given the ever-changing regulations all parties will be compliant to, as government agencies adapt to the situation. However, there will be times when there will be sensitive data and legal requirements involved in certain contracts or amendments. The control access interface in CLM software from providers such as Symfact, allows you to configure and control who sees what information and data, so you can restrict access as and when you need to. This helps protect both employees and your business and reduces your liability during a time where legal issues over clauses may be at the forefront.
One element of the contract lifecycle that seems to have caused issues for businesses not employing CLM software during the pandemic, is auditing. Contract auditing and reviews that have automated systems in place have been a benefit to businesses during the past year. Tracking and alerts have quickly identified risk and where a business is vulnerable to disruption and broken agreements. CLM has also allowed analysis of operational data and has helped businesses assess the likelihood of future risk in specific contracts, and deal with contract terms and provisions which may not have been complied with due to Covid-19 restrictions. The continuous monitoring and auditing have helped reduce and mitigate the impact on businesses during the crisis.
If you are thinking about integrating Contract Lifecycle management into your business to help with factors such as future contractual obligations, mitigating risk, optimizing your business performance, and ensuring compliance at all stages of a contract, then contact us here at Symfact and we can find the ideal CLM solution for your needs.