Once a contract has been executed, what happens to it? Does the contract move on to storage purgatory, never to be seen again — or at least until there is an issue that needs to be addressed, or you need to capture some information from the contract? How do you confirm that the terms of the contract are being met and that all the major milestones and deadlines are being adhered to? And when the expiration date approaches, what do you do about renegotiating and/or renewing the contract?
While there is plenty of important work that goes into drafting a contract, it’s arguably only after the contract has been executed that the real work begins. After all, the contract itself is an agreement between two parties, and usually requires each to meet specific conditions or take certain actions. It’s somewhat surprising, then, how many companies don’t take the same care with their contracts post-execution that they do in drafting the document.
It’s important to consider post-execution contract management as a vital aspect of the contract management process. This may entail overcoming some significant challenges, but by using a contract lifecycle management solution, your post-execution management will improve, and your business will reap the benefits of a more tightly managed contracting process.
An improper post-execution contract management process results in several typical issues. Among them:
In short, without a well-organized, well-managed contract management process after they have been signed, your organization is likely to face significant costs, not to mention reductions in productivity and efficiency.
While the ultimate success of any relationship comes down to the behavior and performance of the contractors themselves, a contract lifecycle management software solution can go a long way toward setting the stage for post-execution success. Many of the common challenges to contract execution can be solved by using a central contracting tool, which offers greater visibility into and control over your company’s contracts.
For example, a CLM platform allows all stakeholders to have visibility into the contracts, meaning that they do not have to search for information — and they will not make decisions based on incomplete information, reducing risk. Stakeholders will be able to collaborate more effectively, using a standard process and collection of terms, clauses, and conditions. In short, it puts everyone on the same page, thereby avoiding potentially problematic anomalies. This level of visibility from a single cloud-based platform also supports a better handoff after the contract has been signed.
A contract management platform ensures that key stakeholders have ample notice regarding specific actions and milestones and are less likely to miss key deadlines. Exari Contracts™, for instance, enables robust workflows with email notifications so users are always aware of upcoming dates and tasks, reducing the likelihood of problems associated with renewals and expirations, deliverables, and other contract terms.
Perhaps most importantly, though, contract management software allows for the deep insights into your company’s contracts that allow for excellent post-execution management. From assessing risk of individual contracts or your whole portfolio and contract performance to calculating the performance and value of contracts — and identifying potential means of increasing contract value — the insights and analysis provided by the software ensure that your contract execution is as well-managed as the drafting process.
The contracting process doesn’t end as soon as the parties sign on the dotted line. In fact, that signature is only the beginning. A powerful contract management tool does much more than smooth the path to the execution — it supports your company’s post-execution efforts and allows you to make smart, strategic business decisions.
If you want to learn more about contracting software that can streamline your contracts from start to finish, request a demo of Exari.