Contract Tracking: Staying in Control
The contracting process is complex, pressured and can quickly spin out of control. In business, a disorganised approach to contracts can have a long-lasting, negative impact on efficiency and productivity – reducing, in turn, the bottom line. While the complexity of contract drafting can be influenced by the communication skills of the parties involved, the contract lifecycle as a whole can be made more manageable with a structured, methodical approach that is based on contract tracking.
The tracking of contracts is an essential ingredient in successful contract management – that is, contract management that serves to boost efficiency and productivity across the organisation. Without effective contract tracking strategies, businesses are unable to achieve the full potential of every opportunity and are left vulnerable to contract disputes and litigation. Moreover, the more a business grows, the larger the number of contracts it has requiring management, and the greater the vulnerability.
The essentials of contract tracking
When implementing an effective contract tracking strategy, it is important to first get the essentials right.
- Contract location
You cannot track any of your contract data if you do not have a clear idea of where your contracts are stored. For many businesses, the location of contracts may be somewhat scattered – with legal documentation relating to various business areas stored – either physically or digitally - within different departments. This type of approach to contract storage makes effective contract tracking difficult to achieve. The more efficient method is found in centralisation of contracts and supporting documentation.
A centralised location for contracts enables comprehensive categorisation which, in turn, simplifies contract tracking processes. It removes from the process the entire step of first determining where the contract is, before analysing its data – thereby increasing efficiency, and creating scope for data analysis at a granular level.
- Tracking points
Contracts are filled with information, and each contract is different in ways that vary by degrees. Even within the same business area, legal agreements will differ based on the nuanced requirements that are specific to the signatories. Not all of this information will influence the management of the contract, however, and not all of it will impact the relationships it governs. This means it is essential to determine which information needs to be tracked in each case.
The setting of data points to be tracked can be facilitated by categorisation, which is made possible by a centralised approach to storage. When contracts are categorised according to Key Performance Indicators, or by relevant data points, the tracking of that information is made faster and more efficient. Such data points may include dates and timescales, deliverables, compliance requirements, and notable clauses.
Once the contract tracking points have been determined, it is essential to ensure that information is communicated effectively to all parties. Contracts are not simply a statement of agreement between signatories, they are documents that are intricately woven into the fabric of the organisations entering into the agreement. If a contract sets out the terms under which one business will supply a product to another, for example, then the fulfilment of that obligation rests upon several parts of the supplying organisation operating in a coherent manner. Several departments filled with personnel will participate in the meeting of that obligation, including both the management, administrative and manual sides of the business. Those in positions of seniority in those areas need current information about the contracts that relate to their work, in order to help ensure the contract is reaching optimal performance.
When businesses track their contracts, it is contract performance that is the crucial issue. Tracking contract data provides performance information, which helps businesses manage risk, increase profitability and enhance reputation. This is, by definition, a pro-active strategy which helps the business stay in control of its contracts and relationships. Staying ahead of the contract lifecycle, as opposed to playing catch-up, means that there is time for full and proper data analysis and, therefore, decision-making processes that are informed and data driven.
Contract tracking with Contract Management Software
Contract Management Software, such as Symfact, provides the ideal solution to the challenges posed by contract tracking – particularly for those organisations that have historically stored contracts in various locations. Contract Management Software streamlines every stage and every administrative process involved in the contract lifecycle.
- Centralised repository
Contract Management Software, or Contract Lifecycle Management software, creates a centralised repository for all contracts and supporting documentation. This is the basis for the simplification of contract management and, specifically, the contract tracking processes. Pooling all contract data allows for categorisation and comprehensive data analysis – all of which enables effective tracking of contract data and performance.
- Browser-based platform design
Contract Management Software is designed for easy yet secure collaboration. The browser-based platform means that authorised personnel can access contract data and tools from any web-enabled device in any internet-connected location. This means that team members can track contracts at any time, ensuring business continuity through any circumstance or environmental situation.
- Notifications and alerts
The notification and alert facility within Contract Management Software is invaluable in terms of contract tracking. It automates the workflow of all involved by delivering alerts at the right time, to the right people. Key milestones, events, and dates can be dealt with in advance, maintaining the pro-active strategy that leads to effective contract tracking.
- Customisable reporting
In terms of contract tracking, performance data is key. The customisable reporting feature of Contract Management Software enables team members to specify tracking points and automatically generate current, actionable data based on that information. This not only facilitates the pro-active strategy required for contract tracking, but also ensures that decisions are data driven, and made from a fully informed perspective. This tool is vital for the mitigation of risk using information gleaned from contract tracking.
Well-crafted business contracts are designed to govern relationships, set out obligations, and minimise risk, but they can also increase risk if left unmanaged and untracked. Contract Management Software delivers the tools needed to implement a comprehensive contract tracking process, helping you to stay in control of your legal agreements and, by extension, your business. Contact Symfact today to discuss your contract tracking needs.