Ineffective contract management processes consume valuable time and resources and increase business risk. If contracting is holding back your business performance due to a lack of standardization, controls, or access, you may need rethink your current contract management process.
Optimizing contract lifecycle management improves efficiency, visibility, and profitability. It also permits you to keep up with deadlines and obligations and take advantage of potential cost savings.
Contract Management Capabilities
While most organizations have some type of contract management system in place, that system may not be as efficient or effective as it could be. Ineffective, inefficient processes can damage commercial relationships, increase risk, and negatively impact revenue.
To help you determine if you’re getting the full value from your contract management system, Icertis has identified five stages of contract management maturity based on our experience working with leading companies around the world:
In this stage, companies often rely on programs that are not integrated. Methods for organizing and accessing contracts may not exist at all. Creating agreements with spreadsheets or Word programs is common. Contracts are typically stored in more than one location, which increases inefficiency and restricts access.
An intermediate system allows users to identify duplicate information and conflicts, and track obligations and rights using reports. However, the system has not yet reached the stage where it is automated. Automation can significantly increase profitability and productivity.
An automated system allows users to ensure compliance with legal standards and internal guidelines. Users can also identify conflicts, obligations, rights, and duplications. At this stage in the contract management lifecycle, there is still limited integration and visibility. The system also lacks analytics, which is key to identifying areas of improvement.
An integrated contract management system includes helpful and efficient compliance controls regarding contract benefits and commitments. Though the functionality may be robust, it cannot adapt to changing business conditions and completely maximize the value of every contractual relationship in your company.
An optimized system provides visibility and control over the entire contract lifecycle, from authoring contracts to renewals. It offers full integration into supply chain and revenue management systems. Users can make alterations as necessary to adjust to changing needs. It is also accessible from anywhere in the world, making managing large or global businesses as easy as operating smaller-scale companies.
Learn More About Options for Your Business
Do you know where your company falls on the contract management maturity scale? Understanding where your organization stands will allow you to implement a better system that meets your needs and enhances team performance. Take our Contract Management Maturity Assessment to determine how your company can improve its contract management system.