In previous posts last year, we spoke about features you should be looking for in a premier contract management solution. We’d like to keep the momentum going on this topic by discussing some very common, and major problems that the best contract management solutions can solve for you.
Before we get to the problems, we’d like to make something clear: contracting is more complex than ever before, and this unfortunate trend is expected to continue. One reason is that standard, “universal” contracts are a thing of the past now as clients are demanding more personalized contracts. What’s needed is a simple and reliable process for getting new contracts into the system, approving those contracts and then managing and storing them. Business, legal, and even financial contract approvers should have access to one central location to collaborate and approve contracts as they move through the contract lifecycle process. Now, let’s have a look at the problems.
Problem #1: The contract management process is unnecessarily complex.
This is the 21st century and we need to press “delete” on this problem. The top contract management solutions allow you to easily collaborate with reviewers and departments directly. Email updates may be sent to contracts through an assigned unique email address, and email notifications will be configured for multiple events, including new contract requests, comments, tasks, updates and documents. The best solutions simplify the submission, review, approval and management of contracts in one easy-to-use tool. Team members should never have to search their inbox or hard drive for the latest version or keep an Excel spreadsheet to manage their contracts. And if your CM solution is part of a broader, more comprehensive enterprise legal management system, so much the better.
Problem #2: A decentralized and confusing repository.
A complete, centralized contract repository allows users to organize lifecycle information such as participants, documents, milestones, negotiations, status reports, key dates and provisions. Systematic categorization, clarity, versioning and easy storage of documents are some key benefits of such a repository. A single source for all sales collateral and other customer-facing content is a key element of the best CM solutions, as well as contract lifecycle management solutions.
Problem #3: The lack of visibility.
Centralizing your contracts allows visibility throughout their lifecycle. You can see a document’s history, including all previous versions and can create reports based on any data field in a personalized dashboard. Part of what exacerbates the speed vs. control dilemma for legal is a general lack of visibility into contract terms, obligations and value. If you can’t see it, you can’t control it. This becomes a major pain point because agreements outline the terms of the value exchanged. If you can’t ensure you are getting the right value for your deals, money is slipping through your company’s fingers.
Problem #4: Inflexible workflow.
The best solutions allow workflow to be configured relative to a contract type or matched to your unique business needs. It’s important to have a mechanism for managing changes over time. You need to be up-to-speed on renewal dates, pricing changes, emerging legal requirements and other events that will require you to speak to your customer/vendor specifically about your contractual relationship. Your ability to manage the contract, particularly changes over time and the renewal process, will have a direct impact on your customer retention rate.
Problem #5: Weak reporting and analytics.
Why would this even still be a problem today? A powerful, straightforward dashboard allows stakeholders to quickly view and analyze the department’s progress on contracts and certain bottlenecks that may appear. Powerful business analytics and reporting engines are additional hallmarks of the best solutions and are crucial in helping team members with their reporting, configuring notifications and other tasks.
These are the main problems we’ve noted over the years, but the list could go on and on. Choosing a provider that is always on top of their game is a sure-fire way to rest assured your money is well spent. By the way, it’s quite possible to purchase a contract administration solution, and also a separate contract review and approval solution. Better still, if you choose to use a contract lifecycle management solution, you’ll have the best of both worlds: a convenient combination of contract administration and contract review and approval all in one package.