What Are the Benefits of a Contract Data Management System?
What do you do with all the data contained in your company’s contracts? Chances are, not enough. There’s a ton of valuable data embedded in your contacts and in how you use those contracts, and the best way to get the most use of it is with a contract data management system. You’d be surprised what useful data you can extract.
- Contract data management tracks and manages key data contained in your organization’s contracts.
- Important contract data includes deliverable dates, expiration dates, client and vendor information, pricing, schedules, products, services, and other specific terms and conditions.
- A contract data management system, part of contract management software, creates a single source of contract information, provides real-time access to key data, reduces errors, and enables more detailed reporting and analysis of your contracts and contract process to mitigate risk and uncover opportunities.
What is Contract Data Management?
Contracts contain lots of valuable information about your clients and vendors, about the items you sell and purchase, about how much you pay or sell items for, contractual obligations, and more. Accessing, tracking, reporting, and analyzing this information is what contract data management is all about.
Contract data management involves the tracking, recording, and analysis of essential data found in all of your organization’s contracts throughout the entire contract lifecycle. As such, contract data management is a subset of contract management. While you can attempt to manage contract data manually with physical contracts, the task is made easier by the use of digital contract management software.
What Contract Data is Important to Track?
Your organization’s contracts contain a variety of useful data. When it comes to contract data management, at a minimum, you should make sure you’re tracking the following data – either directly or indirectly:
- Client and vendor contact information
- Deliverable dates
- Line item deliverables such as products and services
- Pricing and pricing/fee schedules
- Penalties and fees
- Specific terms and clauses
- Additional costs incurred
- Modifications to the original contract such as amendments and addendums
- Expiration dates
- Supporting documents (intake forms, NDAs, SOWs, etc.)
In short, you need to track all numbers, dates, names, addresses, and specific terms in each contract. That data can be accessesed, reported, and analyzed to provide more operational and long-term insights to help you better run your business. Then, over time, you can leverage that data to establish benchmarks and KPIs to optimize the performance of your contracts and contracting processes.
Why Do You Need to Track Contract Data?
The data contained in your company’s various contracts are necessary for the smooth running of your business or organization. Research shows that 70-80% of typical business operations revolve around the data contained in contracts. You use contract data every day for things like:
- Contract management and deliverables
- Contract analysis
- Legal and regulatory compliance
- Finance and accounting
- Sales and manufacturing
- Legal time and resource management
- Human resources
What is a Contract Data Management System?
A contract data management system should be a critical component contract management software. Data-driven contract management software solutions like Contract Logix track the input and flow of data throughout the entire contract lifecycle, from initial request through authoring and execution to contract amendments and renewals.
A contract management system with proper contract data management stores essential data in a central contract data repository and provides easy and immediate access to key contact data. The system not only manages the flow of data, it also automates the entire contract workflow. The result is a more efficient contract process, standardized and compliant contract terms, more accurate contracts, and more detailed data management and analysis.
6 Benefits of Contract Management Software with Contract Data Management Capabilities
Without accurate contract data, your business could grind to a halt. Conversely, properly managing contract data with the help of contract management software with effective contract data management can result in numerous benefits to your organization. Here are six of them.
1. Provides a Single Source of Information
Without contract data management, key information is often scattered throughout various departments and locations in your organization. This makes it difficult to find the required information. The 2021 Ernst & Young Law Survey reveals that 90% of professionals say they face challenges trying to locate contracts – probably because 49% of them lack a defined process for storing executed contracts.
By digitizing all contracts and contract data and storing that data in a central contract data repository, the hunt for key data is simplified. Every piece of data you need – from the initial intake form to pricing to deliverables to the expiration date – is easily located with a simple search of the database. In fact, some systems like Contract Logix leverage intelligence OCR technology to automatically index all contractual information so that is accurately and quickly searchable.
2. Provides Real-Time Access to Key Data
Contract data management not only centralizes key contract data, it also makes it instantly available. Instead of taking hours or days to sift through physical documents stored in file cabinets, you can perform a real-time search and retrieve the necessary information in a matter of seconds. You don’t have to wait for physical contracts to be filed, either; the data you need is available as soon as it’s created and entered into the database. Finding answers to any contract-related question is fast and available with the click of a mouse.
3. Reduces Errors
To be useful, data must be accurate. Manually entered data is often rife with human errors that can lead to missed deliverables, unprofitable agreements, and bad business decisions. Contract data management can help to reduce human errors and provide more accurate data.
4. Minimizes Missed Deliverables
One of the big issues that can result from inaccurate or missing contract data is missing deliverable deadlines. If the wrong date is entered into the system, or if no date is recorded, you won’t know when deliverables are due. You might deliver something past the real deadline or not deliver it all.
Conversely, you might not know when a partner misses the contractual deadline. Accurate contract data management ensures that all deadlines are met and deliverables are received. It will help you mitigate risk and avoid missed opportunities.
5. Helps Determine Contract Performance
Have you fulfilled the terms of a given contract? Has the contract partner fulfilled their terms? Has the contract performed according to your company’s standards? Have you lost money on a contract? Without contract data management, you might not know the answers to these essential questions.
When you properly manage your contract data, you know how each contract is performing and how to create better-performing contracts in the future.
6. Enables Detailed Analysis and Insights
In addition, contract data management helps you track the overall performance of your contract portfolio and process. By tracking individual contract data, you can consolidate that data to determine how fast you’re executing contracts, the average fulfillment rate, and the performance of your entire contract portfolio. You can’t do any of this without detailed contract data management.
(The following video explains how the Contract Logix can help track and extract actionable data from your contracts.)
Let Contract Logix Help You Manage Your Contract Data
When you need a more robust contract data management system, turn to the contract management experts at Contract Logix. Our CLM software automates the entire contract process and provides detailed tracking and management of all essential contract data. We provide a truly data-driven contract management software solution to increase compliance, automate processes, mitigate risk, and finalize business faster.
Contact Contract Logix today to learn more about contract data management.