5 Essential Contract Management Tools for 2021
The world of contract management software is a constantly evolving mix of technology, trends, and best practices. Unfortunately, it’s not always clear what tools are most valuable which is why we’ve created a list of 5 essential contract management tools of 2021.
Self Service Contract Management Portal for Business Users
While its benefits are most often associated with contract managers and legal professionals, contract management software has the potential to make every employee in the company operate faster and with more accuracy and efficiency. Our solution Contracts 365 for example, provides a dedicated self-service portal for employees across the company to leverage for contract related tasks.
Many self-service use cases can be fully automated by the CLM system. Requested contracts, for example, can be automatically assembled from a template and sent back to the requester in a matter minutes or seconds. Contract approvals, another time-consuming task, are ideal candidates for self-service workflow automation since the process can be triggered and tracked by the requestor.
True to the term ‘self-service’, employees can be granted security rights to search for existing contracts or relationships, allowing them to answer questions on their own without distracting the legal team from focusing on potentially higher value work.
Enabling users to upload 3rd party agreements such as vendor agreements is a popular request from our customers. Modern CLM solutions can be set to automatically notify the contact with proper authority and subject matter expertise, that they need to review the contract. This is another popular example of business level self-service that promotes efficiency and productivity for both business users and the legal team supporting them.
Automated Document Assembly for Contract Management
Certain CLM software, such as our own Contracts 365, have capabilities known as automated document assembly, contract authoring, and/or or contract creation. This feature enables the solution to automatically create a completely formatted contract once its requested. A template must first be set up in the contract management solution which usually involves establishing business rules and conditionality that alter the final contract based on the data submitted in the request form.
For example, imagine an internal business requester is in need of a nondisclosure agreement. He or she declares on the request form that they expect company financial information will be disclosed to the counterparty noted in the agreement. In such a case, an established business rule can be set to insert a clause specific to this pre-defined occurrence, into the contract as it is created by the system.
This may have once been described as a one-off request, requiring a lot of human effort and attention. Contract management software with contract creation capabilities can be continually expanded to support an endless number of these conditional rules. Ultimately, your legal team can stay focused on their most important work while business folks receive contract support needed for them to perform their roles to the best of their abilities.
Contract Obligation Management
A common problem we hear from prospects considering investing in a contract management solution is that once a contract has been executed, it gets filed away and the team moves on to the next contract. A major issue is that the terms and obligations buried in the language of the document are forgotten in large part because there is no easy, manual way to memorialize them and automatically assign them to responsible parties to ensure compliance.
Modern CLM software provides users the opportunity to carve out business terms and obligations, and automatically track and report on compliance. There are many examples where this capability benefits our customers. Specific to vendor and supplier contracts its often valuable to track vendor performance against SLA’s or purchase history for purposes of achieving rebates or volume discounts. For customer agreements, tracking commitments made during the sales cycle can help increase customer satisfaction levels and help avoid situations leading up to a breach of contract. And, last but not least, companies that are required to adhere to government regulations and are subject to periodic audits appreciate the ability not only to document and track obligations, but also produce audit reports at a moment’s notice.
For many years now, we have found that contract management systems that are integrated with other corporate applications deliver much more value to the company than a standalone, siloed application.
For example, Corridor Company produces a packaged Microsoft Dynamics CRM contract management integration. For those not familiar, a CRM or Customer Relationship Management application is often the primary tool used by sales reps to manage their deals. Our real-time integration allows sales reps to request and receive a contract back in minutes or seconds without ever leaving Microsoft Dynamics. The time it takes for the sales rep to receive the contract and get it into the hands of their customer is drastically reduced and, so is the time it takes to close the deal and recognize the revenue from the sale. Enabling sales reps to access all the contract management-related data, documents, and tools while remaining in Dynamics, improves their productivity and allows more time for selling and therefore more sales. Realizing these gains across an entire sales team is significant for most companies.
There are plenty more examples to share, here are just a few:
- Integrating with a financial application can speed the process of invoicing and receiving payments.
- Integrating with a supply chain management application can ensure raw materials are ordered when purchase contracts are executed.
- Integrating with a project management application can reduce the time required for new customer onboarding.
In summary, connected systems provide value in the way of increased revenue, savings, productivity, focus, and informed decision-making.
Workflow Automation for Contract Management
Workflow automation capabilities exist in a lot of enterprise applications and its presence in contract management is extremely valuable. We’ve observed that Contract Management and Legal Teams are consistently understaffed. The heightened need to continually complete more quality work, in less time, and with the same or less headcount is why workflow automation is so valuable for contract managers.
Workflow automation can be applied to a wide range of use cases, but it really shines when used for contract approvals, which tend to be tedious and time-consuming. Automated contract approvals, by comparison, can utilize automated reminders to keep approvers on track and your process on time. Escalations can also be built into the process to address approvers that fall way behind and jeopardize your project goals.
Workflow automation is an important tool to help you focus on your most important work.