Digital contract management simply is a software alternative to your contract management strategies. Digital contract management brings together all of an organization's contracts into a single platform, making contract management an easy task. Good contract management is the catalyst for a successful and growing business.
Digital Contract Management Process
Digital contract management begins during the lead generation component of the sales process. Enter each lead into the digital contract management system as a unique entity. Then, as contracts are created from those leads, link all contracts from the same lead through the use of associated contracts. This is a feature within a digital contract management system.
Choosing a digital contract management helps to organize all vendor and customer relationships in the supply chain. Being organized improves the reputation of an organization. Having good business relationships sure will pay off for your company.
Digital contract management includes an electronic signature feature and automated workflows to make the contract processes fast and streamlined.
Contract Management Risks
- Contract non-compliance
- Regulatory compliance
- Lost contracts
Digital contract management systems should be able to overcome these risks, as they maintain contract contents seamlessly.
The ongoing Covid pandemic has produced new risks in contract management, such as employees creating contracts from remote workspaces. Contract managers may not be able to identify and rectify these risks using the conventional contract management method. If the number of contracts is low, then it might be possible but in the case of an enterprise organizations which deal with hundreds of contracts monthly it would be impossible. Yet, when employees work in remote settings, this is all the more reason to use a digital contract management system, to keep all employees using the same system.
A report published on Corporate Compliance Insights shows that a robust contract management software would allow you to identify the affected contracts easily and take necessary steps. The conventional contract management methods are decades old and not equipped to tackle the challenges of a pandemic. A digital contract management is the alternative in this situation.
In this blog we discuss how digital contract management can help your business achieve its goals during this pandemic.
About Digital Contract Management Tools
Digital contract management tools are a software solution that provide a centralized storage repository for contracts. This centralized storage method allows you to locate, track, and analyze contracts in an accurate, reliable, documented, and cost-effective way.
Digital contract management tools leverage artificial intelligence to perform advanced search and analytics on your contracts that are stored in the repository. This capability allows you to identify contracts that might be vulnerable to risks, identify a particular agreement from a large data set, identify contracts that possess non-standard provisions, and assist you and your team in making necessary changes to those contracts.
A task such as searching through a filing cabinet for a single paper-printed contract would take hours to complete using only manual labor, going through boxes of contracts. But the digitization of contract management can locate a contracts in 1-2 seconds.
How Can Digital Contract Help?
There are three critical components of contract management that employ digital contract management software as a best practice.
1. Contract Classifications
For contract management team to operate smoothly they should be able to access the documents quickly. Although this is not the case in most organizations. Contracts might be stored as hard copies in file cabinets, or they could be stored in hard drive or cloud locations, and sometimes both. Digital contract management solution centralizes the contract documents on a single platform. Organized and safely stored means retrieval and analysis became a lot easier now.
2. Contract Document Analysis
Digital contract management software allows contract management teams to locate and analyze contracts not only based on common keywords, but it leverages on the AI features to study the content of the documents and retrieve results based on contract clauses, renewal dates, etc. The system uses these AI analytical capabilities to automatically generate intelligent reports and summaries about the active contracts in the repository.
3. Renewal/Renegotiation of Contracts
When a contract expires, or some external forces like the pandemic happens, you might be forced to identify and renegotiate provisions in contracts. This sudden renewal and renegotiation could be done on a small number of contracts simply, but in the case of a large portfolio it might be impossible to do it manually. The automated workflows and e-signature capabilities in digital contract management platforms allow you to carry out this process seamlessly.
Applications of Digital Contract
Online contract management software has been in the market for a while now. But the truth is many companies are still using conventional methods to manage their contracts. Separately but still relevant, the Covid pandemic changed how businesses operate, including requirements changes. These are all reasons to invest in a digital contract management solution. A digital contract management solution will assist you in organizing the contracts affected by the Covid-19 pandemic and analyze the risks it creates. You can rethink, renegotiate, and if need be, recreate/print the provisions and clauses in these contracts easily using a digital contract management solution.
The business economics landscape has changed, and businesses can brace for these changes using a contract management software tools. You might need to change clauses or provisions in contracts, change deadlines, payments might be delayed, etc. For enterprise companies these changes need to be made on a larger scale and a contract management tool is the right solution for that.
Even after the pandemic the contract management tools can help you in growing your business. A best online contract management software that is integrated with efficient electronic signature features and automated workflows are certainly intelligent and effective, and an improvement over the conventional emails and paper-based file cabinets.
Written by Adarsh Dorai
Adarsh is a SharePoint expert with hands-on experience developing various SharePoint and Office 365 solutions.