Within a company, contract management refers to all the processes involved in drawing up, managing and monitoring contracts.
In companies handling large volumes of contracts, these represent a major legal and financial challenge, requiring intelligent management, facilitated by technology.
In this article, we tell you all about intelligent contract management and how to apply it in practice.
By the way, what is contract management?
Contract management is the name given to the activity of drafting, monitoring and analyzing contracts throughout their life cycle. The life cycle of a contract can be broken down into several stages:
- Editorial
- Negotiation
- Validation and signature
- Execution
- Renewal
All these stages must be perfectly mastered by companies, since imperfect contract management can have serious consequences on relations with parties (customers, suppliers), as well as generating significant financial losses; this is the case, for example, when automatic renewal dates are not known.
Contract management covers a wide range of functions:
- Administrative management of contracts.
- Management of the relationship with the parties, both prior to signature and throughout execution.
- Prevention of contract-related risks, which are essentially legal and financial.
- Analysis of contractperformance, i.e. costs and benefits, as well as quality and deadlines.
These functions can be carried out across departments, mainly by the Legal, Sales, Finance and Purchasing Departments.
However, to save time and reduce the risk of errors, some companies prefer to entrust all these tasks to a dedicated person, the contract manager. This is a relatively new function, requiring a wide range of legal, commercial, financial and technical skills.
Whether or not a dedicated position exists within the company, contract management always ends up posing a problem linked to the volume of documents to be managed. Indeed, most companies handle large volumes of contracts, between 20,000 and 40,000 according to PwC.
Under these conditions, it’s clear thatmanual contract management is impossible. Companies needdigital tools to automate the creation of contracts, provide rapid access to the information they contain, and analyze their performance without resorting to tedious manual calculations.
How can you automate your contract management?
Once a certain volume of contracts is reached, companies can no longer rely on tools such as Word or Excel for efficient, secure management. In fact, document digitization is not the only issue: the majority of contracts contain sensitive data that must be protected, and access to them must be simplified for all those who need to consult them.
To centralize and optimize contract management, the best choice is to opt for intelligent contract management, based on the use of a dedicated digital solution. Today’s contract management software is specifically designed to limit risks and improve contract management performance.
These tools take the form of platforms in which :
- Contract creation is standardized and simplified.
- An electronic signature module is integrated.
- Negotiations and all contract-related exchanges are accelerated and secured.
- Tracking their execution (orders, renewals, key dates) is optimized.
- Performance analysis is made easy, thanks to customizable reports and dashboards.
These solutions come under the heading ofintelligent contract management, because they save precious time on the inputting and filing of contractual information, and on other time-consuming and repetitive tasks. They provide companies with a veritable digital contract library, facilitating day-to-day contract-related tasks.
In addition, contract management tools bring real added value to the company, thanks to key information and indicators that can be used for decision-making. This enhanced control of contracts is based on functionalities such as :
- The intelligent search engine, which provides access to specific information (clauses or other legal elements) in a matter of seconds.
- Audit and reporting tools, which provide a global view of contract activity and performance in just a few clicks.
Contract management software is therefore designed to optimize contract management at all levels and throughout the entire life cycle of the agreement, from drafting to completion.
All departments gain greater control over contracts: the legal department, of course, but also sales, purchasing, finance and human resources.
???? Intelligent contract management enables professionals to easily handle large volumes of contracts without the risk of error or approximation, with an overview that facilitates decision-making.
Simplifying the drafting, negotiation and monitoring of agreements saves a considerable amount of time, which in turn improves productivity and growth throughout the company. Indeed, the faster a contract is signed, the more contracts can be signed per day, week or month. Added to this improvement are savings on hidden costs and missed opportunities linked to contracts, which are automatically detected by the software.
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