Having strategic risk mitigation measures and contract risk management tools in place is essential for the security and protection of any business. By adopting specific risk management strategies, you can be sure that your contract management system is compliant within the constraints of various policies.
The Importance of Contract Risk Management Tools and Strategic Risk Mitigation
Contracts are legally-binding, so actions taken in your contract management process must be deliberate and intentional to ensure that contract lifecycle management is both accurate and compliant. The structure provided by contracts gives your organization guidance on which steps to take next. Today’s technological advancements have created efficiency, increased accuracy, and enhanced management in the risks associated with the complexities of contract management.
There are specific contract risk management tools your organization can leverage to ensure that contractual risks are being accounted for and managed. While contract terms and conditions themselves are substantial, they are not sufficient alone for risk mitigation. To protect your business, it is imperative that you have a specified protocol for risk mitigation and management so that you reduce the potential for breaking policies and compliance in your contract management system.
6 Ways to Mitigate Risk in Contract Management
- Automated Contract Lifecycle Workflows
Without proper knowledge of where a contract is within its lifecycle or what changes have been made to the contract, you increase the chance of inaccuracies and discrepancies greatly. Minor errors add up substantially and can potentially hurt your business and reputation. With awareness of all contract processes at all times, you can deliver a superior product and service to your clients.
Gone are the days of low visibility in contract management. Gain transparency, visibility, and control of every detail with automated contract lifecycle workflows. Keep all parties in the know with the help of contract risk management tools via workflow automation – making handoffs, action steps, and collaboration easy.
A Centralized Contract Repository
Our contract management system is based on the SharePoint platform, creating a single location for you to store, manage, and sort through all contracts, clauses, and related documents. The SharePoint-based contract repository serves as a phenomenal contract risk management tool. You never have to stress about losing critical documents and information again with cloud storage and SharePoint Restore and SharePoint Backup.
Need to check on a specific contract condition or term? Use customizable filtered searches to find exactly what you need instantly in the contract repository. Having all the details within reach allows you to reduce risks.
Customizable and Filtered Search Features
Having an organized and searchable contract repository is essential to reducing risk. A functional search tool can help you locate specific information when needed so you can ensure your organization is in compliance with every contract. In this way, staying aware helps to reduce and mitigate contractual risk.
In your contract repository, you can refer to previous contracts to help draft and choose specific terms when building new contracts. With an easy-to-use search tool, you can conduct filtered searches to find similar types of contracts and documents that can help you when drafting new ones that have some relevance. By having additional resources when building contracts, you can reduce risk.
Reminders, Alerts, and Notifications
A contract management system with automated reminders, alerts, and notifications is optimal for risk mitigation and reduction. By being well-prepared for deadlines and obligations, you can stay on track and proactive with all of your contract management needs and tasks. Obligations, deadlines, renewal dates, expiration dates, and more can all be monitored and prepared for with the help of these various contract risk management tools.
These specific dates have associated penalties if they are not met in a timely manner. With effective monitoring and tracking, you can ensure that contract management performance stays high and that dates are met flawlessly. This will inevitably manage risk because you are working proactively and addressing issues before they become too overbearing.
Automated reminders, alerts, and notifications mitigate risk by keeping the most important dates and tasks top of mind. Your contract management team will never have to worry about missing a deadline ever again. Track critical dates and tasks ahead of time, execute necessary actions, then submit appropriate work by planned deadlines to ensure success. this way, you will prevent against being susceptible to various penalties and accidental automatic renewals.
Increased Security Measures and Access Control
It is necessary to have a broad understanding of the legal implications within your company’s contract management processes.
How might confidentiality come into play?
What is the impact of privacy within your operations?
What contract risk management tools can be implemented to optimize security, protection, and privacy?
By asking yourself various questions regarding security, access control, and legal measures, you can see where improvements might need to be made, and then take steps accordingly.
To reduce risks and noncompliance, legal obligations and obligations to clients and vendors are items that should be taken under great consideration. In addition, attaining appropriate security measures and access controls within your organization’s contract management processes is crucial to risk mitigation and management.
With cloud security, you can be safeguarded against data breaches by storing, managing, and sending contracts with a safe and secure approach. When a data breach occurs, you may incur compliance penalties as well as risk leaking confidential client information. Data breaches create several risks in contract management. The breach causes you to incur penalties due to inadequate security. However, SharePoint encrypts sensitive data to ensure its protection. Cloud storage, SharePoint Backup, and SharePoint restore can offer additional protections to your contract management system.
On SharePoint, you can enable and disable access to specific data and documents for select individuals. Use our efficient permissions management features to authorize employees easily. Now, you never have to worry about contracts being in the wrong hands.
Increasing Collaboration While Managing Risk is Possible
During both the negotiation and approval steps, you can improve communication via workflow automation. Integrating various features like redlining, “@” mentions, email integration, and several others into a centralized place can create an easy and efficient platform for multiple people or parties to collaborate.
In this way, navigating through these parts of the contract lifecycle can be significantly streamlined and much faster. Cross-department communication and collaboration is much improved during the contract management process with automated workflows. When considering risk mitigation, risk decreases due to the technology’s ability to offer real-time versions of the document, including its latest changes and iterations.
Mitigate risk with effective contract risk management tools and take your contract management process to the next level so that every step of the contract lifecycle is as efficient, productive, and as collaboration friendly as possible.
Ready to get started today? Reach out to us to learn more about our Dock 365 Contract Management System.
Written by Lindsey Paulk
Lindsey Paulk is a Content Writer in Jacksonville, Florida that specializes in digitally communicating all-things contract management.