An effective contract management system requires implementing best practices at all levels of an enterprise and ensuring that the contract management process is repeatable and consistently applied.
Enterprise contract management software allows companies to improve business outcomes through good contract management and automated processes.
Contract management software also solves persistent business problems. The right platform can accelerate the pace of business, reduce risk, and optimize outcomes. Good contract management at scale transforms core operations to deliver true value.
Here are some practical ways you can leverage contract management software to help your business.
Accelerate contract origination with automated contract management
Without a systematic approach to contract management, authoring new agreements can take up a great deal of time and resources. The wrong templates may get used, or templates may go unused altogether. This means contract approvers need to review all the terms closely to ensure that a new contract meets business standards, while legal has to vet each clause to ensure compliance and enforceability. This redundant due diligence work can take up a frustrating amount of time.
Use contract management software to provide smart contract initiation tools like easy-to-navigate clause and template libraries. With pre-approved contract language to help automate contract authoring and management, users can reduce cycle times and save resources. To take full advantage, use a contract management platform with intelligent contract authoring wizards that guide users towards optimal contract structure.
To avoid delays caused by emailing contract versions back and forth with outside parties, leverage cloud collaboration tools. There, parties can all work on the same document for better insights into redlines and improved version control. At all times, everyone is fully apprised of the latest developments in negotiations, via alerts and notifications, and can negotiate virtually, using comments and markup tools.
You can also use contract management software to improve adjacent processes, like RFx management and proposals. For example, use contract management systems to intake proposals following an RFx, then use automated contract authoring to close the deal with the winning bidder.
Reduce risk with an end-to-end contract management system
Limited visibility into risk is perhaps the biggest challenge presented by poor contract management processes. Risk can bubble up from any number of places in a contract, from who a company is doing business with to the terms of the agreement. If a company has no orderly way of accessing and analyzing contracts, though, it can’t take steps to mitigate or prevent it. Contracts spread across dozens of locations in different countries present a major risk to any enterprise that operates globally with a diverse group of regulators and third parties. It’s little surprise, then, that managing and mitigating risk is a major driver for companies seeking to improve contract management.
With good contract management practices, gain full visibility into whatever reputational, financial, or regulatory risk resides in your company’s body of contracts. Use standardized contract management processes to allow users to surface risk, sorting by agreement type, financial value, location, outside party, and other factors.
Creating such an improved contract management system from scratch is tremendously challenging. Doing so would require programming, a large database system, and thousands of hours of work importing and collating contracts. Fortunately, leading-edge CLM platforms allow for most of that work to happen through automated contract management processes. Some even offer AI and machine learning tools that analyze and organize agreements automatically. With these leading-edge tools in place, automated contract management outperforms legacy contract management systems.
Optimize performance with improved contract management processes
Too often, contract terms are not enforced to the fullest extent possible, causing inefficiency and leakage.
To be sure that a contract is fully enforced, an enterprise requires continuous reporting and advanced analytics. To offer real-time insights into contract performance, choose a CLM that interfaces with ERP systems so that you can match contract terms to real-world metrics.
A CLM system should also be configurable based on the end user’s needs. If a platform features open architecture and enterprise software integrations, it’s sure to meet the needs of a business in any industry.
The Icertis Contract Management platform features all these origination, risk management, and administration features—and more. To learn more about how Icertis can transform contracting for your business, click here.