What is contract management?
Contract management is the process of organizing and managing the lifecycle of a contract, from creation through to auditing and versioning. It supports the customer and allows employees to easily create, update and find contracts, saving time and increasing productivity. As contracts are central to the functioning of a large number of organizations, effective contract management is important for driving value and improving an organization’s performance.
Contract management offers the following benefits:
- Support for the contract and customer lifecycle.
- Support for strategic decision-making.
- Improves the performance of the organization.
- Enables data insights.
- Helps identify areas for revenue optimization and cost minimization.
- Reduces manual efforts.
Contract management in an organization
Why is contract management important for organizations?
Traditionally, contract management happened through filing cabinet systems but it has now advanced to make use of digital capabilities. However, it can be difficult for enterprises to keep track of contracts and ensure the latest versions are always accessible.
Contract management allows contracts to be kept up to date in a secure, accessible location, which is beneficial for both the organization and the customers. Every stage of the contract process is more efficient through improved operational processes and minimized financial risk. Effective contract management also contributes to further understanding of the contract process, bringing opportunities for improvement. Conversely, inefficient contract management often leads to siloes between departments and produces manual errors, which can lead to non-compliance, revenue leakage, extended sales cycle times and jeopardized customer relationships.
Contract management software
Software is a key factor in contract management
Contract management software is a tool that can include elements such as self-service portals, pre-approved legally compliant templates, legal playbooks and electronic signatures. All of these elements work to add efficiency and compliance to the process, as they take the manual effort out of creating a contract.
Software can also function to provide vital insights for a company, such as data tracking on different stages, and helping identify areas for revenue optimization and cost minimization. It also saves time for users, enabling them to instead focus on other aspects of the contract management process, such as more strategic aspects like evaluation.
Contract management systems
Features of contract management systems
Although there are multiple different types of contract management systems, and the exact requirements differ depending on the organization, there are several features which are vital for a futureproof system:
- A cloud-based storage system, enabling data to be stored and easily accessed regardless of where employees are working.
- A central repository where employees can easily access the elements that are necessary for contracts, which is kept regularly up to date and is always legally compliant.
- Compliance management guaranteed through the system used, in order to minimize the risk of incompliance.
- Automated aspects to reduce the manual input required, lessening the likelihood of manual errors.
- Data analytic tracking capabilities, to provide insights and allow improvements.
Templafy and contract management
How Templafy helps contract management
Templafy offers many of the features that are vital for contract management. Through Templafy Library, document templates such as those needed for contracts, and frequently occurring text elements are stored, maintained by admins, and can be easily accessed by users. As Templafy Library opens in a task pane within Office applications, it is intuitive for users to use the correct templates.
Templates stored in Templafy Library are also dynamic, meaning that they personalize to the specific user. As a result, the specific user information is automatically filled in, as is the company information, and the necessary legal disclaimers. This minimizes risk in contracts, as it removes the manual need to fill in these details. Templafy also has features which allow it to pull in the specific clauses based on options selected, speeding up the contract creation process, alongside aiding efficiency. Through Templafy, contract management is simpler for the employee, saving them time and minimizing risk.
Take a look at our blog for more information about contract management.
5 New Ways to Think About the Document Creation Process
Of all the processes that support a company or organization today, the document creation process is one of the most extensive, touching nearly everything: internal communications, customer relations, sales, legal compliance and much more.Read more
What is contract lifecycle management?
Contract lifecycle management is a practice that an organization puts in place to assure that everything everyone does was clearly agreed upon. No hidden covenants, no secret agreements. Can you imagine the outrage if your supplier suddenly demands a penalty price because you are buying too little of his stock?Read more