Contracts can be considered the core of every business. This is the one entity that helps businesses protect their interests and run their operations smoothly through shared trust and relevant information. This helps organizations create legal frameworks and business practices that help them keep their commitments and arrangements. While the transactions around them may seem simple, sometimes they are incredibly complex and makes or breaks the business.
It takes effective systems and strong processes to manage this crucial part of the business. As businesses are making the paradigm shift towards accelerated productivity and effectiveness, they need to find ways that can help them cut through inefficiencies and manage contracts efficiently. A good contract management system can expedite the processes and help companies realize tangible benefits rather quickly. In their attempt to choose the right contract management system that can fit perfectly with their business ecosystem, a company may encounter hundreds of contract management vendors. But what are some of the critical features they should look for?
1. Configurable workflow
Each organization comes with its own process cycles and priorities. So, the tool you choose should be flexible and configurable. When the contract management system helps you configure new workflows for creating a new contract, getting it approved, processing it, and all the way to its closure and settlement without coding or intervention. The higher the configurability, the easier to respond to the dynamic nature of contract workflow and engineer robust contract management.
Regardless of the variety of contract documents that are prepared, negotiated and managed, when the system can configure workflows in an instant, it becomes faster and easier to execute the contract.
2. Effective template management
As more and more contract types come in, it becomes difficult to create templates that fit the bill. An ideal contract management system removes these inconsistencies in the existing process by providing a rich set of robust frameworks and templates. It ensures that master and subcontracts are thoroughly, smoothly, and effectively managed as it helps in updating the contracts multiple times.
The framework offers more fluid, responsive, and dynamic templates that simplify contract management, introducing a more customized approach to optimize the contracting processes.
3. Easily searchable repository
When numerous contract documents are involved, it is typically hard to extract, store, and retrieve data when needed. In traditional manual contracting, a different set of contracts from different vendors can be very difficult to locate.
Now a good contract management system comes with searchability. With a few keywords, it can bring up the contracts stored even for years. Unlike the fragmented, monolithic data platforms, where data is scattered across places, the contract management system creates a consistent data experience across your contract ecosystems as the digitized information can be accessed in a matter of a click.
4. Classify, digitize, and extract
In seeking to derive maximum value from their contracts, companies are trying hard to improve the visibility of contractual information. In their attempt, many organizations get lost in an endless loop of manually extracting and processing volumes of data.
This manual process is incredibly complicated. An ideal contract management system is AI-powered and reinvents contract management. It can intuitively understand what the document is about, capture the important data it contains, and route the extracted data to the right place. This coordinated process delivers a more consistent digital experience.
5. One place to store documents
As digital transformation efforts advance, and as technology helps companies process increased numbers of contract documents, a systematic approach is required. Companies need good data and document management and a contract management system to support them with smooth archiving.
The management of contracts between customers, vendors, and partners is now easier as these documents can be stored in a single location. So, users can trace hundreds of thousands of contracts that are accessible to all the stakeholders in a company. No more back-and-forth emails and communications to get hold of a contract; people can find it even when they are remote and work on it.
6. Informative reports
Challenges such as manual data processing, getting the formats right, and inaccurate reporting are making contract management a tough job to do. An automated contract management system makes document review and processing faster and more consistent, thus enabling companies to create accurate, fit-for-purpose reports.
It delivers rich KPIs to unlock insights from a wide range of contract documents. This way, enterprises can reduce document review time and increase processing accuracy manifold. The real-time reports ensure absolute accountability and continuous improvement. The software tool effectively harnesses multiple data sets to build a reliable reporting system.
7. E-signature integration
Getting the approval of the stakeholders can become a hard part when it is difficult to get the person to sign the document just because companies have not kept pace with technology. As companies now prefer electronic signature platforms to manual signing, e-signature integration has now become an essential component of contract management.
The contract management systems can integrate DocuSign, allowing signatories to validate contractual documents securely and fastly. It also allows companies to keep track of who signed what documents, thus ensuring accountability. With this smooth integration, businesses can carry out convenient and secure electronic transactions across the world easily. As a result, it is more efficient and can save costs.
8. Customizable notifications
There is nothing that is worse than missing out on renewing a contract. A contract management system embeds digital controls that keep watch and sends timely alerts to review the contracts before the deadline, make amendments to the document, and forward them for further review.
It ensures that the right people are notified of the changes made to a document on time and thus protects the reputation of the company. This added governance reduces risks and manages contracting functions, providing an accurate understanding of the obligations.
9. Contract redlining
Can businesses derive value from contract negotiation? During the negotiation process, a good contract management system can make it more productive by helping the users edit, comment, and highlight key points that can provide more leverage in the process.
It dramatically reduces points of contention and enables stakeholders to increase market-driven opportunities. It helps companies collaborate more effectively through redlining and versioning capabilities. Parties can now exchange multiple versions of the contract in real-time and work on the changes without any delay.
10. Dynamic approval management
Process standardization is crucial to navigating through the complexities, challenges, and leading practices. Delay in the approval process can set off the ripple effect of delayed payment approval and not renewing a contract in time.
When contract authoring and negotiations are taken care of, the contract management system triggers the approval process. The fluent and dynamic workflow can be configured with zero coding effort required. The state-of-the-art solutions manage and protect the integrity of the approval lifecycle with instant scalability. The mounting operational and approval pressures are now averted thanks to the tech-powered contract lifecycle management solutions.
This comprehensive overview of key features you should look for when choosing a contract management system will be helpful as you try to find a contract system for your enterprise.