Are you thinking about improving your contract management process?
At the heart of any commercial relationship between customers, suppliers or partners, contracts play a key role in the life of a company. Their proper management is a strategic lever. And yet, in 2019, it was still estimated that more than half of companies did not have a contract monitoring tool, according to a study conducted by Deloitte.
To prevent them from being an obstacle to productivity, here are the 4 steps to optimize contract management within your company.
How can you simplify your contract management?
Did you know? There are between 20,000 and 40,000 contracts on average in large companies. From drafting to signing, including simple consultation, their management is therefore a crucial task to ensure their efficiency and smooth operation internally.
Efficient contract management saves time and helps to control the risks associated with contracts. Contracts contain dozens and dozens of essential and potentially risky data, such as due dates, amounts, key dates and suppliers.
Thus, good management necessarily influences the good health and profitability of a company. Today, there are automated solutions to help professionals manage the life cycles of contracts in order to simplify their creation and ensure optimal monitoring, in complete security. These are called digital contract management solutions.
1. Document your current process 📚
Before opting for a contract management software, it is important to understand what works and what doesn't work in the current life cycle of contracts in your company. How do you do it on the procurement side? How about the legal department? Does the HR department also have a very specific way of managing its documents?
Start by reviewing all the ways of doing things internally. This documentation phase allows you to understand the needs and uses of all your teams.
Only once the habits and demands of your employees have been audited, it is possible to set objectives in order to find the CLM and its associated functionalities that will suit all your teams.
Adopting contract management software means unifying the contract management processes within your organization and improving the internal process from start to finish, regardless of the department. This requires a roadmap to ease the transition.
By setting up a documentation, you help your collaborators to identify the current state of a process, to follow its progress, to fix its objectives but especially to keep a trace.
In the case of a new contractual policy, it allows users to be informed of the change and thus avoid information asymmetries.
📝 According to a Goldman Sachs study, implementing a contract policy can help :
- Accelerate negotiation cycles by 50%.
- Reduce incorrect payments by 75-90%.
- Reduce contract management operating and processing costs by 10-30%.
👀 Worth reading (and getting your colleagues to read): 7 reasons to adopt SaaS-based CLM software 🐶
2. Automate contract creation and tracking ⚙️
Using a CLM means facilitating the contract process from its creation to its signature by automating all processes.
To help you do this, there is first of all the functionality called legal clausier. This allows you to gather in one place all the clauses models issued in your company's contracts, like a very large data library.
These sample clauses make it easy to create documents and ensure compliance. You ensure better risk management, while freeing up time for legal departments to focus on value-added tasks.
This automation is also found in the review and modification of contracts. These are automatically recorded in a modification history.
In addition, contract tracking is also automated and put into a loop called validation workflow. Thanks to this workflow, all stakeholders are informed of the contract's progress and notified when they have to revise and/or sign it.
3. Build your contract database 🗂️
Investing in a CLM also means creating a contractual database. It is a library where all your contracts are stored. No more going back and forth from one filing cabinet to another and no more lost contracts!
The use of a contractual database generates as many gains in terms of document management as it does operational benefits. Among its benefits, we note:
⏱️ Quick contract review and validation: all your documents are just a click away.
🗃️ Reliable and secure archiving of your documents: they are safely filed in an encrypted database.
📋 A management of contract versions, revisions and annotations.
👥 User access management: you have control over the solution's users and their permissions.
🏝️ Access to documents even when you're on the go or telecommuting: since all contracts are filed in a secure library in the cloud, you can find them anytime, anywhere. No need to be in the office.
👉 For an enterprise, digital contract management thus significantly promotes control over contractual commitments and improves operational efficiency returns.
4. Automate time-consuming tasks with artificial intelligence 🤖
Some contract management solutions such as Hyperlex are equipped with artificial intelligence that helps you streamline time-consuming and non-value-added tasks such as typing, searching or filing information.
Artificial intelligence can directly detect relevant information in contractual documents, such as clauses, key dates, amounts, durations, etc., and notify you of them.
In fact, you won't miss out on any information that could be detrimental to the health of your business and the proper execution of a contract!
AI therefore eliminates time-consuming research work by legal and operational teams, especially since we always know where our documents are located thanks to a CLM.
Good contract management makes collaboration between teams fluid, ensures compliance of your contracts and considerably limits human errors and unnecessary back and forth. Automating these tasks makes it easier to control risks and improve performance instantly.
Do you want to improve contract management in your company?
Ask for a Hyperlex demo !
Read also:
- 70% of lawyers want to invest in a CLM with electronic signature
- What is a Legal Operations Officer?
- IFRS 16: everything you need to know about the standard