Your contracts can have a major effect on your companies’ daily operations. From slowing down the productivity of your teams to increasing costs due to unmitigated risks, poor contract management can prevent your organization from being the lean, well-managed, efficient enterprise that it has the potential to be.
Given the importance of contracts, you might think that investing in contract management software would be a top priority for every company. The fact is, though, that most companies aren’t using a contract management software, or are relying on systems that only provide a few pieces of the overall puzzle. That’s all changing, as the contract management market value is expected to more than triple in value by 2023.
What are the advantages that a robust contract management software platform offers? From the earliest stages of drafting and negotiation through execution to risk management and managing renewals, software that provides contract lifecycle management will save your company money, increase productivity, and reduce the amount of risk you face in a competitive and ever-changing marketplace.
Consider the contracting process within your company. Assuming that the terms of the contract have already been negotiated, the contract is requested from the legal department. Your team must then wait until legal finalizes drafting the contract and returning it to you for execution -- and that assumes there aren’t any issues with the terms that need to be revisited. If that happens, then you can expect to wait for contract revisions, further delaying the process.
Or, perhaps you have access to the most common “boilerplate” contracts that your company uses. With a few clicks, you change the basic information in the contract to reflect the current deal, then send it off to be signed. It isn’t until later on that you discover that you used an outdated version of the contract, and executed a document with terms that aren’t in compliance with current policies.
Clearly, neither situation is ideal. In the first case, waiting for legal to draft and approve the contract can cause delays that jeopardize the deal, while also reducing productivity. And in the second case, uncontrolled contract versions creates a high level of risk, not to mention that copying, cutting and pasting potentially introduces even more errors.
Contract management software such as Exari Contracts solves these problems. Not only does the platform offer storage and organization of contracts, but increases productivity via a template-based drafting process. Not only do your legal experts have access to all of your contracts and tools to speed up the contracting process, but the template-based interview process allows for expanded self-service contracting options without the risk. By answering a series of questions, your teams can create their own ironclad contracts using pre-approved language but all through the control of legal. Even if a party attempts to add in additional terms after the contract has been revised, contract management software will flag this issue, and ensure that everyone is aware of the change. This cuts down on approval time for contracts, while also ensuring consistency in the process and all contracting clauses and terms.
Once a contract is signed, both parties are legally responsible for fulfilling the obligations of that contract. Yet how often do contracts get filed away, only to be reviewed when it’s time for renegotiation? And it’s only when problems arise that either party discovers issues related to noncompliance, and by then, it’s likely that one or both have experienced losses.
With a system designed for management, contract owners have greater insight into their contracts and understand all of the obligations inherent in contracting. Imagine being able to automatically pull information about deadlines, pricing, or any other details of obligations and add them to calendars and project management systems. This would allow you to reduce risk and streamline productivity. With Exari Contracts, this is possible.
One major issue with contracts in many organizations is that as the number of contracts grows, so does the difficulty in analyzing your portfolio and understand what they contain. While it might be possible to easily measure the level of risk present in a single contract, when the number of contracts increases to 100, 1000, or several thousand, conducting that analysis becomes a time-consuming and cumbersome process -- one that’s limited by human capabilities and bias.
One of the major advantages of contract management software like Exari, is that it uses artificial intelligence and machine learning to extract data from contracts to provide in-depth analysis of not only basic contract terms (expiration dates, etc.) but also the terms, clauses, and level of risk present in the contracts. For example, if a key regulation changes, using the AI-engine of Exari Vision allows you to easily find the contracts affected by that specific change and address the issues before you are out of compliance. This also makes it easier to run reports on your entire contract portfolio.
These are just a few of the major advantages that contract management software provides for your business. Simply put, with so much at stake, there’s no reason that your business shouldn’t invest in a better system for managing its contracts. To learn more, schedule a demo of Exari here.