Using Contract Management Software at Critical Points of the Contract Lifecycle
According to a 2014 IACCM survey, 63% of experienced contract practitioners report that they are frequently a cause of cost overruns; 59%, a cause of project delay; and 28%, a cause of reduced future business opportunities. (Here is the IACCM full study)
With such a gloomy attitude towards contracting, it’s not a surprise that only 16% of respondents feel that their contract process “always achieves a positive impact on the relationship between the parties”. However, this study does confirm that an improved and more effective process could shift those attitudes for the better.
Here’s how contract management software addresses five critical points of the contract lifecycle.
1. Identify Team Leaders
In long-term contract relationships, particularly those with a high employee turnover, it is often difficult for newcomers to know who is responsible for what. Management systems that use paper or isolated spreadsheets provide very little guidance as to the role and responsibility of each member of the team.
When an email marked URGENT and requires immediate action, the novice contract manager may not have any context at all. Therefore, they may not know whether or not the person at the other end is the appropriate one to address the issue. With a contract management system, the project manager can set up an unlimited number of users at multiple sites or locations, providing specific user details. Users then have full, casual, and read-only levels of permission, as required.
By knowing who is responsible for what and identifying team leaders, everyone can experience a smoother onboarding process.
2. Get People Involved
A common source of frustration for large teams collaborating on the same task is the lack of real-time updates when somebody is working on a document. Often, coworkers prefer to completely ignore rounds of revisions because they feel that they’re just waiting the contract to be ready for their revisions. Since no one wants to work on an old document version, the process becomes delayed, or worse, the contract becomes a version control nightmare.
Effective contract management software overcomes this barrier by implementing a system of check-ins and check-outs for documents, showing all changes to the current draft and authors that made those changes, and enabling users to notify specific recipients via email once their review is completed.
3. Establish Timing of Contract Reviews
The contract manager, or lead, can maintain a master calendar that includes all upcoming dates, tasks, and other important milestones. All or part of this calendar can be visible by users with a read-only access so that those parties are aware of the timing of contract reviews.
Additionally, certain platforms, such as the one from Contract Logix, allow users to take action instantly from the calendar, such as adding personalized to-do lists for users, and pre-scheduling email reminders for action items (even to those who don’t use the system). This directly informs individuals of their expected involvement, sets clear expectations for reviewers of what they need to do and what their deadlines are, and reminds people of any prior commitments.
4. Constantly Communicate with Entire Contract Team
Another challenge from the contract lifecycle that is overcome through a professional contract system is the ease of quickly routing documents for approval to one or multiple parties simultaneously. While emailing digital drafts back and forth speeds up the process a bit, it is still cumbersome, especially for large teams.
Contract management software provides document version control, automatic document comparison upon check-in, and change list notations including the author. These features allow for constant communication with the entire contract team. The Contract Logix platform goes the extra mile by using an intuitive email manager that is very similar to Outlook, the standard on business email applications. It’s ease of use decreases the required training time for employees and provides reassurance to the user by presenting a familiar layout.
5. Get Faster Approvals
The need to print copies, assemble sets of documents, mail those packages, and wait for them to be mailed back to you is no longer existent. With contract management software, you can provide an easier and more convenient way to sign and execute agreement to your customers and stakeholders.
Replace your paper-based agreement signature process with a more convenient, paperless process. You’ll be able track contract signatures in real time and route signed agreements internally for final approvals.
Using contract management software helps you overcome challenges at critical points of the contract lifecycle. Specifically, contract management software allows you to identify team leaders, get people involved, establish timing of contract reviews, keep continuous communication with team members, and get faster signed approvals. These improvements towards more control of costs and schedules, both of which increase the potential for future business opportunities.