It is not uncommon for businesses to focus all their efforts on an initial contract, and then feel that contracting work is done, only to realize there are many activities that carry forward, such as a renewal or amendment. However, post-execution contract management can be as important, if not more important, than that initial negotiation or Master Agreement. Effective management of your negotiations, contracts and the contracting process can be the difference between a fruitful business relationship and a damaged one. It can ensure the seamless renewal of a contract, or precipitate a contract termination or worse still, costly and time-consuming litigation.
Contract management is a multi-faceted affair and processes must be in place to ensure that time is not wasted, tasks are not repeated, and the correct personnel are given the appropriate responsibilities. It’s a team effort and because of this, seamless communication and collaboration are key components of a successful engagement. It requires transparency and accountability.
In order to assist with contract management and its many moving pieces, businesses are electing to use contract lifecycle management software that can systematize and automate many of these triggers and steps. Leveraging software-based workflow automation helps firms operate at maximum efficiency and the highest level of accuracy. This in turn spells savings for all parties involved in the agreement.
While any contract management system is likely to be an improvement over old-fashioned email and document driven processes, an enterprise-grade Contract Lifecycle Management systems ContractRoom offers businesses a digital platform that handles every aspect of contract management both pre and post-execution. Such a system should be able to create, negotiate, edit, and execute contracts at any level of complexity and any volume.
During the negotiation phase, CLM software can eliminate much of the email traffic and many of the approval headaches and version control nightmares that plague old-style negotiations. Instead of meetings, phone calls, and emails, contract negotiations can be done virtually, with real time changes and updates and a single record of truth.
However, as the word “lifecycle” would indicate, a true Contract Lifecycle Management system is equally useful after a completed contract is executed. An executed contract in an MS Word document sitting on a storage system will not help you manage your obligations under that contract. However, the same contract in a CLM solution will. Likewise, a CLM system can search and analyse your corpus of existing contracts for risk-producing content, or simply to improve future contracts and contract processes. Here at ContractRoom we working to accelerate this process improvement by leveraging AI machine learning from millions of contract data points.
It’s not surprising then that large companies are increasingly turning to enterprise-grade Contract Lifecycle Management solutions to gain more speed, control and insight.
This is the 4th in a series of 5 blogs on core ‘CLM Modules’:
- contract drafting (blog 1)
- contract assembly (blog 2)
- contract operations (blog 3)
- contract management (blog 4)
- contract compliance (blog 5)