Contract Data Collection: How to Avoid the Second Job Syndrome
By Dave Gott
Many contract management software prospects I meet with often come to me feeling overwhelmed about the state of their contracts today. They love the idea of using software as opposed to manual methods to manage their contracts but are worried about what do with all their existing contract data, especially if it’s not currently being managed via spreadsheets or some other tool. In their mind, it seems like an uphill battle to try and gather all the important dates, contacts, and other important data hidden within their contracts.
After all, there’s plenty of other things they need to do as part of their daily responsibilities. The last thing they need in their busy schedule is to play contract data collection clerk as a second job. Unfortunately, they have a preconceived notion that for the software adoption to be successful they need to load every bit of historical information into the system before ever using it to manage their contracts.
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But what if there was a way to gather this information over time using your normal process of working on contracts? What if there was a way to get started with the process by using existing information that you have. What if you could leverage your existing contract management process? Heck, even folder structures of where your contracts are stored can be a good start. The good news is that all those options are totally acceptable and, in many cases, recommended places to begin your journey.
Use A Go-Forward Approach
An important concept in contract management software design in terms of system setup is the ability to have an additive approach to your data. Quite often, you will have some items that you report on as available pieces of data you can leverage. Other times, it’s something that you need to gain.
With a go-forward approach, perhaps you make a certain piece of data that you need to collect a required field in the system. For example, you need to be able to report on whether your NDA’s are mutual or not. By using contract software that’s configurable to your needs, you can add in a question, “Is this Mutual?” and have this field mandatory for the user to answer, choosing a drop down “yes” or “no”. This could also be done with a missing key date field.
This way, when someone is working with that contract, whether it be a renewal, amendment, expiration, or even a vendor or supplier review, you are always capturing that piece of data. As new contracts get added, you capture the data required for proper reporting, compliance, and risk management. This eliminates the need for someone to sit in a dark corner for 3 months madly gathering and entering data while ignoring their normal duties.
Leverage Your Existing Business Systems
Many times, we find that customers have some contract information in other systems. Accounting, ERP systems, and CRM’s quite often will hold a good portion of your data already. An important aspect of a contract lifecycle management (CLM) platform is that organization, contract, and document information can each stand on its own and be loaded in an additive way.
This allows you to build information quickly and as it’s available. There’s no need to duplicate efforts and with a little creativity on what you have for information about your contracts. For example, you could upload your vendor list from an ERP system into the CLM software regardless of whether you have a contract connected to a vendor yet.
Get Data from How You’re Organizing Contracts Today
How are you organizing contracts today? Frequently, I talk to prospects who aren’t using spreadsheets or other means of managing contract-related information. Their only contract management solution is a folder structure organized by vendor or supplier and within that folder will be subfolders containing each contract type such as MSA, NDA, etc. What they may not realize is that the folder approach still provides three important points of data that can serve as building blocks going forward: the counterparty, contract type, and document itself.
These often overlooked yet simple items can create the baseline for importing contracts from a folder structure situation into a contract management system. This allows you to take the first step in moving to a model of managing your contracts based on what’s really important such as the terms, conditions, and obligations, for example.
Takeaway
If you are considering contract management software to improve your contract processes, don’t stress unnecessarily over what to do with your existing data. The three strategies outlined above can help you build a good foundation for your contract management system using tools and methods that do not take away your valuable time trying to get a handle on all your data while performing your regular job functions.
The last thing you need is a second job trying to gather an endless amount of information as a contract data collection clerk in a dark corner. Just leverage the data hidden within items you already have and gain the data you need for proper compliance with an additive approach over the course of your normal daily routines.