Contract Lifecycle Management Helps You Avoid Contract Overload

by | Sep 11, 2022 | Contract Management

Employee Contracts

Let’s consider this familiar situation: it’s the last day of the fiscal quarter, and everyone in your company involved in the contract process is frantically working on extensions, approvals, and special requests.

Since each contract is being reviewed and adjusted manually by the legal team, it could very well be the wee hours of the morning before anyone gets to head home – especially if anything unexpected comes up.

These last-minute quarterly efforts inevitably lead to confusion and inconsistencies at some point, even with the most experienced employees on the job. Not only that, the process takes up valuable time that could be spent on higher-level activities.

The office of the general counsel is tasked with reducing risk, ensuring compliance, and supporting the business in a host of other ways.

Using their finite resources to read through contracts and make sure each one meets certain standards is simply not an efficient use of time or expenditure.

Look for early signs of contract overload in the form of contract bottleneck.

The trend throughout industries is to move to digital cloud tools, like contract lifecycle management, that offer automation and process support across the enterprise.

There are two major benefits to using an ECLM approach to deal with your company’s contracts.

First, it reduces the amount of manual work required to author and update contracts, leading to fewer errors; and second, it makes contract management less reactive and more proactive with tools to extract meaningful data and identify areas of heightened risk and potential cost reductions.

 

Contract Management

Contract authoring and management that won’t keep you up at night

Corporate counsel knows better than anyone else that each contract they write has to be completely precise and airtight to be an asset to the company; and missing renewal dates and other important items in an existing contract could mean losses and risk increased litigation down the road.

Using the right CLM system, authoring and managing contracts throughout their lifecycles becomes a much simpler and more streamlined process.

With customized libraries of standardized clauses and mandatory elements, along with automatic notification of upcoming deadlines and other important dates, your legal teams can focus on the big picture rather than the time-consuming minutiae of each contract.

This keeps those late-night contract review sessions to a minimum and makes contract management feel less reactive overall.

Optimize your operations with complete contract overview

 

Contracts are the DNA of a company’s operations, so having a full view of your company’s contracts can provide a complete picture of its general health.

When general counsel can see an overview of all of the enterprise’s contracts and easily search for potential trouble spots, they’re able to be more proactive in identifying areas of risk and unrealized opportunity.

Not only does CLM software provide the legal team with more time by reducing manual workload, it gives them the tools to make that extra time more productive for the enterprise as a whole.

As increasing strategic insight and support is required from corporate legal departments, avoiding contract overload by streamlining data management is becoming absolutely critical.

A good CLM tool, integrated across the enterprise, allows the office of the general counsel to do its job of mitigating risk and ensuring compliance more effectively.

 

Contract Lifecycle management

Tapping Into the Full Value of Contract Management Tools.

 

A lot. More and more, procurement is being asked to improve supplier relationships and reduce supply chain risk.

According to research by Spend Matters, procurement should be analyzing contracts during negotiation to increase successful agreement and execution, and predict disputes before they occur.

We agree. Reporting on contract information is critical for mitigating risk, maintaining compliance and realizing savings.

Contracts and the data they contain are valuable. But too often they are underutilized because of the challenges in organizing and accessing data.

To get the most from your contracts, you need to manage the information they contain to be able to use them in a way that is actionable and informs business decisions.

 

Contract management tools allow for deep analysis of contract data. Comparing past with current information helps you answer questions about what happened and why. Tracking the probabilities of things happening again is essential for managing corporate risk.

Unlike in the past, it is now easy to access contract data and generate insightful reports. Comparing information from myriad sources provides intelligence that improves contract agreements and execution.

Contract analytics can also help to identify risk as well as predict future disputes and areas of legal concern and contention.

Even so, not all data is valuable and not all analysis is equal. Identifying relevant contractual documents and data can be a challenge. Also, organizing ancillary documents (i.e., amendments, exhibits, etc.) in one place can be overwhelming.

Data discovery and analytics make it easier to track information and analyze and distribute it in meaningful ways.

Contract Lifecycle

How much should procurement really care about contract management?

Regular reporting improves processes and helps organizations recognize the full value of their contracts.

 

Having a baseline to measure against helps users track the impact of new strategies. Auditing contracts helps organizations ensure regulatory, internal policy, commitment and obligation compliance.

Using contract management software to facilitate contract analysis, many organizations are now leveraging contract information to drive their business like never before.

Users can track every edit made during the course of contract negotiation and throughout its lifecycle.

Reports identifying deviations from standards or inconsistencies in turnaround time reveal inefficiencies and highlight areas of potential improvement.

These insights can also help build a business case for performance bonuses and increasing headcount.

Contract management tools can provide transparency that, along with easy to set up pre-approved language, policy guidelines and secure approval chains, can help ensure the use of acceptable provisions and practices that reduce risk and improve the bottom line.

Tracking and organizing contract information is the first step towards maximizing the potential of your contracts.

Analytics can make them even more valuable to get ahead of risk and plan for the future.

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Par Jérémy Ferrer, le 11/09/2022

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