Irrespective of the type or size of business you have, one aspect that is indubitably central to your enterprise’s functioning is contracts. Contracts are the cornerstone of every relationship that an enterprise has with its stakeholders like customers, suppliers, and partners. Given its importance in everyday business operations, efficient management of contracts has long-term value for your enterprise. Robust contract management also helps establish and maintain stronger stakeholder relationships. The onus of guiding the entire contract lifecycle is on the contract management process, which ultimately makes or breaks your organization.
Need for Contract Lifecycle Management Software
The role of contract management has evolved– especially in today’s digital world. The contract generation and management process are not just about filling documents anymore. It entails understanding all the aspects of the contract lifecycle to extract meaningful data. A Gartner report states that ‘CLM is evolving from an operational record-keeping system to an enterprise-level core system addressing business risk, costs, and the pursuit of revenue maximization.’
Contract management software automates the contract lifecycle reducing the manual effort and probability of human errors. The right contract management system comes with a wide range of features, including smart contract workflow templates, digital signature, centralized contract repository, and contextual search to maximize the contract performance and mitigate risk.
Related reading: 5 SIGNS YOU NEED A NEW APPROACH TO CONTRACT MANAGEMENT
Reasons contract management system is essential for your business
Let’s look at some of the benefits of a contract management system that make it crucial for business growth:
Assists business functioning
An effective contract lifecycle management system helps in simplifying the functioning of an organization by structuring business expectations and the mechanisms required for their fulfillment. It also allows you to analyze how your organization meets its objectives. Your organization also gains vital insights from contract management that help you to identify areas for cost minimization and revenue optimization.
Increase Contract Visibility
Contract management systems help in making the complete contract management process paperless. Unlike paper-based contract management, they allow centralized and cloud-based contract repository that optimizes visibility, reporting, and compliance. Centralized storage of all the contracts ensures that your teams are working on the right version with the latest clauses and updates. Additionally, you can accelerate your contract processes by providing your team access to contracts at any time from anywhere in the world.
Compliance throughout Contract Lifecycle
Businesses must ensure compliance throughout the lifecycle of their contracts. Your enterprise can adhere to all the regulatory/legal and corporate requirements through effective management of contract compliance. Better contract compliance reduces various risks and prevents financial and operational loss. With a contract management system, you can track changes made by users and control different versions. It allows you to meet various compliance standards.
Never Miss a Renewal Date
Your organizations can improve the contract renewal awareness of your contract management teams with good contract management software. It helps you archive contracts upon expiry or send notifications on triggers specified by you. Thus, you will never miss a renewal date again. If configured properly, the contract management system can eliminate loss from unwanted auto-renewals.
Shorten Approval Times
With contract management software, your organization can use smart workflows to automate the entire contract process. This expedites the creation and review process. An efficient cloud-based contract management system also has features of highlighting and redlining the contracts that make collaboration easier and also improve efficiency. Dynamic contract workflow makes contract scanning and evaluation faster.
Contract lifecycle management systems have smart alerts for deadlines, expiry, renewals, and other important milestones. It increases compliance through better storage and visibility. With workflow management, an audit trail is created of all the changes in the contract document creating evidence of compliance and for audit. Thus, contract management software helps mitigate contract risk.
Contract management software have intelligent reporting tools that allow organizations to understand their contracts better. These tools help create a wide array of reports that are automatically generated and can be customized. Using these analytical data, contract management teams get actionable insights to optimize performance and revenue.
Return on Investment
If a contract management system is implemented and used correctly, it offers a significant return on investment through cost savings and loss prevention. Your organization can save legal expenses and administrative costs associated with contracts. CLM software helps you avoid penalties for missed contractual obligations. It also helps you reduce the time and effort spent on contracts.
Improve Audit Preparation
Contract lifecycle management system with centralized storage and semantic search provides access to all your contracts with a few clicks. Your organization can maintain accurate contract history information for audit and keep a full trail for compliance.
In the closing
According to a research, poor contract lifecycle management causes 9.2% of annual revenue leakage on average, and 70-75% of business projects fail due to contracting issues. Cloud-based contract management systems make accessing important contract information from anywhere at any time easier for teams. It simplifies the process of creating, finding, and evaluating contracts. Contract management systems ensure better compliance with smart reminders that send time notifications for renewals, deadlines, payments, etc. Additionally, contract management software systems have intelligent analytics with predictive capabilities that improve decision-making by providing crucial insights.
Vuram’s Contract Management System is a fully customizable, configurable, and user-centric solution designed for agile enterprises. An intelligent, plug-and-play, and award-winning solution, it enables enterprises to go live in less than two weeks with almost zero coding.
For implementing a seamless contract management infrastructure or a demo, write to firstname.lastname@example.org.