With a spurt in the outsourcing business in today’s world, contract management has grown to be one of the key area for using this platform. Businesses from around the globe have been channelizing to manage solutions designed to provide end to end, critical yet unstructured, contract data into a structured form. Software systems have been built to bridge the geographical gaps and help clients sort contractual solutions.
What is Contract Management?
Contract management has been an efficient tool to normalize the process to transform contractual data into intelligence. This allows one to analyse the information needed regardless of how it appears in the contract. This is done in a systematic and efficient manner where managing contract creation, execution and analysis for maximising operational and financial performance, and minimum risks are the key focus areas.
No longer is contract management an administrative, manual task. It is, in fact, evolving into a sophisticated and scientific discipline based on data analytics. It now plays a dynamic role that orchestrates changes and makes sense of market volatility, driving performances and outcome-based agreements for results as it integrates the processes across the enterprise and beyond.
Why do you need an E-Contract Management System?
Contract management is no longer only about contracts, it is relevant to everything that touches contracts. Regardless of the size, industry, and geographical location, there are few things all businesses have in common. One being, they all operate on the foundation of contracts. Contract management lifecycle has been designed in such a way that it streamlines workflow and centralizes data accessibility.
Methods of e-contract lifecycle management have broken all territorial boundaries and provided the world a very handy tool. Offshoring businesses with the help of these Software has benefitted to get solutions to analyse and interpret contracts.
E-contract management has great benefits, some of which include:
Customised Procedures and Accessibility to Contracts – One of the key essentials of e-contract management is the customised procedure which helps reduce the amount of time and resources spent granting access to documents and searching for information manually. Having all the contract data in one centralised location helps people locate the right information at the right time. This is a useful method of accessibility and the fact that it is just a few clicks away makes it very user-friendly compared to the laborious task of dealing with piles of documents. There are solutions designed in software that helps bring the key data to the surface.
Meeting Timelines – The risk factor in this area increases when the deadlines are missed, and it happens mainly because the task is conducted manually. The reliability risk of manual search and managing increases if e-contract management is not an option. The possibility of human error increases with manual work and in return we increase the risk of compliance issues and potentially losing the contract altogether. Introduction of the e-contract management system will automate a lot of tasks like – continuous update of contract as per amendments within timelines, making all relevant changes, getting alerts for any contract which is about to expire, renew, terminate, etc.
Availability of All Files – There won’t be any possibility of losing files or mismanaging them as all the data will be loaded in the contract repository in an orderly manner. The legacy documents will be stored in archive folders, which enables client to go back and check if there is any requirement. Without a centralized location to store and manage contracts, the risk of misplacing a contract is very high. The possibility of losing the latest version of the contract becomes high and that could lead to potential damages to business practices.
Storing All Data in an Organised Form – Contract management tools provide sorting and searching functionality to efficiently locate the required documents. Having an easy to use e-book to store all the company’s agreements in one place is an essential first step to reducing off contract spending. With just a few clicks, one can get any specific information within the contract and he/she does not have to go through the entire contract to locate the same. All the documents are loaded on the tool in such a manner that it flows in a logical order which is a master document followed by towers and schedules. The master agreement is a parent document and all other agreements are child documents. All documents flow from master to child. So, in the contract repository which is also called the contract tree – the document flow starts with the master agreement followed by the child and other attachments.
Locate Key Data Quickly – The tool plays the role of a navigator. Most of us must have found ourselves scanning through contract clauses, looking for just a few key words. Besides storing soft copies of signed agreements, contract management system enables one to pull out the key contract term and clause for quick viewing. Along with that, the relevant portion of the clause is also highlighted for a better and exact view. Within the clause the documents are also referred, so one can easily know from where the information is updated.
Metadata – Metadata is created for every agreement as it acts as a cover page for the contract. This is helpful as it contains all the basic information regarding the contract. If one wants to get a snapshot of the contract, this is where one should go.
Deliverables & Obligations – Contract management tools let users navigate and view all deliverables, which is a very important aspect of contract management. All contracts have commitments that need to be met, and the tool helps keep track of such commitments. The absence of strong mechanism to document, track, and report commitments places the contractual parties at high risk of not being able to deliver on time. Contract management mechanism design solutions combine the use of technology, process, and client requirement designed to ensure the commitments are monitored.
Keep Track of Important Dates – It is very essential for businesses to keep track of all the important contract dates. All such dates are managed in the tool and that ensures that key dates in the contracts are never missed. Adequate handling of such dates is managed throughout the term of a contract. Using a proper tool to track and monitor contracts will impact management of supplier relationships better.
Contract Management is now considered an integral part of the procurement process to help stop leakage and aid in gaining compliance around finance, time, and visibility to suppliers. Despite prevalent usage of e-contract management systems, there is a strong requirement for dedicated analysis and interpretation of such contracts. The tool is a binding factor that consolidates all information within a contract and stores it in a safe and user-friendly zone.
A major part depends on the requirement of the client and our job at Neo Group is to meet those requirements flawlessly and provide our client with very accurate, timely, and hassle-free results. If you are looking for contract management solutions that keep a tab on your huge contractual data, Neo Group can help. Contact us for more information.
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