If you are running a business, you know that contract management is the lifeblood that makes things happen. Yet, if your business is growing at a rapid rate – it might happen that you become lost in the neverending sea of papers, miss important deadlines, contract renewal, or contract milestones.
Without a unique and cohesive system, you might experience a so-called business paradox where your rapid growth can crush you. So it is up to businesses to find a way to increase productivity and find the best way to keep the pace with contract management.
Whether you have 30, 300, or 3000 contracts, you need to establish the system that will work for you, not to make things overly complex.
In this article, we will dive into some benefits and best practices to automate your contract management processes.
Automation in business processes
One of the most effective ways is contract management automation. Automation is the word we often hear in business circles, and for a good reason – it can help you increase productivity and mitigate certain risks.
Why is automation important for your entire ecosystem? Well, automation can do its magic across all your business processes and locate its bottlenecks. From accounts payable automation to contract management – redundant tasks are minimized, costs are reduced, and you can rearrange your assets and focus on your stable growth more.
Business automation is based on algorithms, and the main goal is to reduce simple tasks so humans can do higher-level tasks that would bring actual benefits to your business.
Contract lifecycle and downsides of doing things manually
Monitoring your contract successfully by doing it the old way requires precision, discipline, attention to detail, and of course – time. It also requires legal teams, contract managers, and everyone working closely with the contract to be synchronized at all times. Every contract has a lifecycle of its own: creation, negotiation, execution, and compliance monitoring. Also, every contract has its key dates and documentation. It sounds complicated to monitor just one!
Some downsides of doing things the traditional way are wasted time in the first place. People might be struggling to find where the documents are. Duplicated work is something frustrating, but it is common in the contracting process. Also, you might not have an up-to-date version of the contract or the content template. This can lead to poor customer or business partner satisfaction, with things happening at such a slow pace.
If you are still in doubt that contract management automation is the right choice for your business – we will show you some of the best practices of implementing automation.
How automation can help your contract management?
Contract management is not by any means a fun process… but why make it harder than it is? So using contract management software that is intuitive should be the next step in improving your business processes. If you think that your business is still small for a venture like that, the fact is that it could indeed give you a competitive edge.
Automation can help you with:
You will not lose time on making a template in Word and then converting it with tools. Different types of contracts, all the details – it can be easier with content templates. Not to mention it will all look more formal, professional, and matching – it will leave a lasting impression on your clients and business partners as well.
Once the template is ready, it is time to request the contract. Contract requesting is initiated when one party requests for renewal or a brand new agreement. From there, you need to get accurate information about both sides and the first draft of the contract.
Without automation of this process, things can get complicated and there is a danger of not getting accurate information. With implementing automation solutions – the right data is extracted, and there are no delays in time. It also eliminates the need for emails and calls about the status because the draft will be available to anyone from any device.
In the process of negotiation, alterations of the contracts are an integral thing. Therefore, redlining is important to keep track of all contract alterations and compliance as well. In reality, it looks something like this – you download the contract version from Microsoft Word and send it over the email with all the changes and wait for the other person to send it back.
By doing this, it is easy to overlook certain things and let things slip through. There is a high risk of human mistakes. With automation software, you can keep just one and universal version of the document with all the alterations in real-time. You will rest assured that the negotiation process will go as smooth as possible with all important details in place.
Tracking and renewals
Personnel errors can lead to prolonged contract management cycles. In the industries such as logistics and procurement, it is essential to avoid these mistakes. When the domino effect kicks in, it can cause some serious delays in the business processes. Also, with the late contract renewals, businesses can lose money and lead to complications like miscommunication, lack of visibility, and transparency.
Automated content management automates the approval process and making sure that all compliance standards are satisfactory.
Redaction of sensitive data
Not all contracts are created equally. Some of the contacts contain sensitive or confidential data. Therefore, there is a different set of rules applying to them. It is not uncommon for legal staff or content managers to oversee the aspect of confidential data. Without a proper automation solution, there will inevitably be some coarse consequences.
With automatic redaction, you will be sure who can see the sensitive data – you can lock certain paragraphs and set the permissions. This can also help in preventing unauthorized sides from making changes to the contract.
In a world without automation, all contracts are in one place shared with the managers, which have alerts set for tracking the important milestones of the contract lifecycle process. It takes time for managers to set the alerts and to track the important dates. Automation eliminates that need, and things go more seamlessly without the need to lose yourself in the dates and spreadsheets.
Contract management is an integral part of keeping your company in order. With your business growing, you will need to think about how to do things more efficiently. You will need all your resources – both human and financial to continue with the growth.
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