Why should your organization be using an enterprise contract management solution? If you are a contract manager or a lawyer or even a compliance officer at your organization and you have discovered that the paper-based system that you have been using for the past many years is proving to be inadequate for your contract management needs, you might want to start thinking about implementing an automated contract management solution at your organization. Of course, you might need to get the executives and your managers on board for implementing the solution in your organization. How would you prove your point to your managers? How would you persuade the management that the proposed automatic contract management solution, is in fact profitable and essential investment for both the productivity and growth of the organization?
Well, we have put together 7 reasons as to why you should consider a Contract management solution for your organization. The management might not be very passionate about the minute details as you would be, you will need to base your statements on solid arguments, like how would this proposed system contribute to the financial growth of the organization? How does it cope with the risks associated with the contract management system? Your arguments should contemplate on solutions rather than the problems. Learn why contract management is necessary.
1. What is at stake?
Contract Management is a sophisticated process, it requires close supervision, we cannot afford any blunder in the process, one slip-up could inevitably lead to a drop in revenue, increased expenses, non-compliance with contractual terms or even worse you can find yourself in litigation with one of your contractual parties.
This is where an automated contract management system comes in handy, it helps you in a risk- and hassle-free management of your contracts, all in one place. With a SharePoint Contract Management System, you know your data is secure and SharePoint as you might know already brings together all your files. Risks in this process also include:
- Failure to meet deadlines
- Failure in Compliances
- Unproductive workflows
- Unsuccessful Reporting
An automated CMS is in effect eliminating the possibilities these failures occurring. An investment in an automated Contract management system would only benefit your organization. You might be wondering how this investment affects the revenue and financial value of your organization, we have an explanation for that as well.
2. What is the effect of an automated CMS on your organization’s financial values?
How does a contract management system affect your organization’s financial value? Well, these automated systems are programmed to send out alerts and notifications before the contracts are ready for renewal or expiry. This effectively avoids any surprises from vendors who might walk in with new agreements and threaten to shut down services because a contract is about to expire. When your organization has multiple suppliers working with an automated contract management tool, along with an organized certificate of insurance, it offers you an extra measure of safety and mitigates liability.
The system supports early payment discounts and improves cash flow by capturing payment terms. Spend Visibility is also a high-value benefit. Dock 365’s Contract Management System comes with excellent budget management capabilities that help you handle money to spend on each department well. Also, the management wants to know what the ROI on the contract management system you are proposing, it is important that you focus the discussion on quantitative, financial benefits of the contract management.
3. How does CMS affect organizations Revenue?
When it comes to revenue, it is much easier to cut expenses than to grow revenue for most of the organizations. A contract management system will allow you to earn more income from your contracts. According to a study conducted by The Faculty Roundtable, more than 50 percent of contracted savings for several of Australia’s leading organizations, as negotiated by both parties to contracts, are not making their way to the bottom line. One of the core reasons behind this is a poorly managed contract system. An automated CMS will tackle these issues by clearly and concisely displaying the value that your company should be receiving from an agreement.
4. How does CMS reduce Expenses?
In addition to the increased income, a CMS will help you in reducing expenses at your organization. The automatic solution enables you to quickly examine your organization’s responsibilities and obligations under a particular contract and only deliver what is necessary.
5. How does CMS increase Productivity and Operational Effectiveness?
By Implementing an automated CMS, you are eliminating manual processes and centralizing your document repository, thereby gaining control and improving efficiency in your system. Forecasting functions have improved, with the automated reminders and tools users can schedule as per their convenience.
6. What is the Role of CMS in Managing Relationships?
In addition to building relationships between colleagues, the system also helps improve relationships between your organization and the contracting party. You may ask how this is done. Since you and the counterparty are working off the same software, negotiating a contract and once the contract is signed ensuring compliance with that contract, etc. can be made easy. Furthermore, the CMS minimizes the chances of any miscommunication between both parties and ensures that everyone is on the same page. All these contribute towards building trust between both organizations and odds are, you will do business together in the foreseeable future.
7. How CMS reduces the chances of errors?
Think about it, what could be a critical mistake that could occur in managing contracts? Yes! you thought it right. The worst thing that could go wrong while manually managing contracts is, missing a deadline. Such a blunder will effectively jeopardize the performance of your organization in a contract or renewing a lucrative contract. But, in a contract management system, you are very unlikely to make such a trivial mistake. With the automated notifications on important milestones like renewal or expiry, you can be sure that the organization is not missing any important updates. In contrast to the paper-based system that you might be using, you are likely miss an update in the paper works anytime. With a user-friendly CMS, you can ensure that the organization is following its obligations under the contract. There are very few chances of you and your team miss a deadline or fail to comply with contractual terms in a contract management system.
Along with reasons to get one, hope you now know the most important Contract Management System Requirements.
Written by Adarsh Dorai
Adarsh is a SharePoint expert with hands-on experience developing various SharePoint and Office 365 solutions.