Contract Management is an integral part of the effective management of companies looking to maximize operational and financial performance while reducing financial risk. Successful contract implementation is especially important for companies that don’t have a huge window to sail past potential losses due to sub-par contract implementation processes.
It isn’t enough that an organization has professionals in place to handle contract management. Employees must be augmented with the presence of processes and software companions to satisfy increasing compliance and analytical needs.
– Business News Daily
The effectiveness of your new Contract Management system to achieve your goals mostly depends upon its effective implementation. Let’s take a look at some of the strategies to go ahead with the same:
1. Planning An Implementation Roadmap
First things first, even before any Contract Management process can move forward from the negotiation and signing stage, it is essential to create and develop a contract management implementation plan. This ensures that all parties are aware of all the elements and terms involved in the contract and what is required and needs to be delivered.
- Everyone involved in the CLM process should understand their roles and responsibilities to ensure all parties have knowledge of what is required from them at all the key stages
- Measuring and evaluating performance, efficiency, and standards are also key to every Contract Management process to negotiate and set the agreed KPIs
- Setting timelines that are agreed upon by all the parties involved, allows the teams to have complete control over contracts
2. Team Building & Executive Buy-In
All executives must be on board with the implementation of a new contract lifecycle management system. It includes planning a budget to support the funding of the key projects and dedicated resources, as well as assigning time for suitable training.
Now the next key step is the team building – who will run the CLM system, choosing a well-versed project manager and QA team. This helps you bridge the knowledge gap between your business and your contract management system vendor. Choosing the right governance committee including business partners from different areas of the organization makes it easier to implement your project with strong alignment on the rules, practices, and processes across the enterprise.
3. Bringing In Existing Contracts
Don’t forget about your old contract documents now that you’re planning to implement a new CLM tool. Without the active legacy contracts, the rate of the CLM system adoption can drop significantly causing the failure of the implementation plan. Migrating your legacy contracts into the new CLM system can substantially improve the contract visibility across your organization.
Thoroughly documenting the current state of your contract processes, and having a comprehensive understanding of what is currently being done are essential to managing relationships effectively. This analysis and documentation help identify process inefficiencies, gaps and other opportunities for improvement.
4. Thorough Risk Management
The teams involved in the Contract Management processes should be proficient at risk management as there could be risks involved in contract documents. Although Contract Management processes don’t directly aim for Risk Management, it still should be prioritized when it comes to the continued risk assessment of third parties as it assists in minimizing risks and hefty contract disputes.
Both risk analysis and cost benefit evaluation need to be important elements of effective CLM. To ensure successful Contract Management implementation, an all-inclusive relationship across departments enables the team in charge to work in sync. with the contract, legal and financial teams are needed. It shields you from the possible financial or legal risks.
5. Optimum Communication
Building relationships with clients and service providers necessitates communication for all the parties involved. Real-time contract document information must be readily accessible and conveyed to all the relevant parties and persons.
When it comes to communication and managing expectations, a framework for tracking and reporting performance and progress is one of the most effective tools. This allows all parties involved to keep track of KPIs, contract reviews, and deadlines, resulting in a positive working relationship with all parties and making the contract management process go as smoothly as possible.
6. Smart Record Management
Keeping a detailed and comprehensive record of all the data associated with a contract provides an audit trail that aids in risk mitigation and protects the organization from future litigation. To successfully deploy a Contract Management system, a framework must be in place in order to have a successful system of record, such as contract management software.
A central repository consolidates all of your contract data, accelerates the documentation process, and allows for easy data access as well as document, contract, and legal agreement management. Due to its comprehensive search functions and tagging tools, contract administration and associated administrative processes can be eased using the existing software. Information can be identified quickly and readily by using metadata to search contracts for important phrases and clauses, making the overall contract management experience much more efficient.
7. Timely Auditing & Reporting
It is essential to continually audit your contracts and the third-parties involved, for both the success of your business and to reduce the risk of litigation and fines which can have devastating financial consequences. Regular auditing and reviews protect you from non-compliance and minimize risk.
Having a framework in place to continually manage your contracts and outcome, you can avoid missing the end of contracts, renewals and by using the KPIs and analyzing operational data and workflows, you can have a complete overview of where improvements can be made. Having all your data from processes in one place can help your business plan for future agreements by either predicting any possible third-party risks, or solving issues quickly such as bottlenecks in the system or missed deadlines for example.
8. Accessible IT Infrastructure
Going digital will substantially enhance your efficiency and access to information, provided you have an accessible IT infrastructure where you can track key metrics throughout implementation. An efficient CLM platform as a part of an accessible IT system should have teams working quickly in collaboration.
Besides the speed of the process, areas such as compliance, contract language, collaboration, and the number of contracts processed should improve as you continue to use the platform. Part of the implementation is being aware of what works and what doesn’t, and how your teams work with the platform.
With the help of a digital, automated Contract Management system in place, businesses can utilize technology and automation to streamline all the contract procedures and processes and improve their efficiency and revenue. A robust Contract Management system provides a consistent and automated process and tools for the management of contracts and the associated responsibilities.
It’s important to consider the needs of your organization as thoroughly as you would examine the features and benefits of Contract Management tools. It helps you reduce operational costs, increase productivity, and exceed your client’s expectations, and that’s exactly what we help you with.
So, are you ready to take control of your contract processes?
