Contract Management and COVID 19: Redefining the value of contract management software in the era of COVID
Generally speaking, contract management and COVID 19 are not two phrases that you commonly find in the same sentence – nor do they provide a headline which would elicit much interest. Not until today. While we, the contract management software vendors have been espousing the virtues of our digital platforms for years, present circumstances have brought many of these recommendations to the forefront.
“Why?”, you ask.
The obvious. We are not in our offices. For those with paper contracts, you do not have access to your filing cabinets. You can’t walk down the hallway and poke your head into Karen’s cubicle to ask where you can find a previously executed contract or when an in-process contract might be completed. And, you certainly can’t run down the hallway, hot on the heels of your General Counsel or CFO, asking them to add their John Hancock to an approved contract.
And, while we all initially appreciated not having to go to the office, many of us miss those days. I can’t imagine, however, that you miss the inefficiency present in your manual contracting processes. The scramble to find an approved form. “Did we do business with this organization before? What were the terms that we agreed to?”. And, then, following up and asking when you can expect to have your contract approved. And, simultaneously, updating your boss on where you are in the contracting process. Once finally approved, then needing to embark down the signature process.
A lot of “ands” in that paragraph - and a lot of waiting – and a lot of lost time and energy. If I were your CFO, a whole lot of unnecessary delays that negatively impact your ability to recognize revenue and collect cash.
If You Don’t Have a Contract Management Software Now Is the Time to Implement One
In this era of COVID and remote working, if you don’ have a contract lifecycle management solution, now is a great time to consider one. Given the remote nature of most companies, this may seem a challenging task, but when viewed closely, one which is readily achievable.
Many, if not all, of the contract management software vendors offer SaaS based applications so the installation and launch are much easier than they have ever been before. If you’ve already given thought to your metadata - the information that you want to collect on your contacts - your workflow, and your security paradigm, excellent. If you haven’t, not to worry. We’ve all become pretty adept at web meetings (e.g. Teams, Zoom, etc.), and many of the vendors have proven analysis and implementation processes to guide you through the implementation. For those who may not have time, most contract management software vendors offer “quick start” implementations where you simply start with their standard and build from there. Time savings aside, one can make the argument that this is a very viable way to get started as it allows you to familiarize yourself with the application. Once in productive use, you can then make changes.
Who, here, has completed a software implementation with in-depth planning and analysis, only to go live and wish you had approached it differently? As the saying goes, “you don’t know what you don’t know – until you know”.
Depending on the maturity of your organization, gaining approval from your Information Security or InfoSec Team may be just as challenging, if not more so, than doing the implementation, itself. In today’s cloud-based world, security has become top of mind for many organizations. While the content that you will store in this particular type of cloud – your contract management cloud - likely does not contain PII or sensitive information, it will store some of your company’s most important assets – your contracts.
For those who do have a rigorous Info Sec approval process, might I suggest a solution similar to our Contracts 365 product? While we intentionally do not self-promote in our blogs, given the subject matter, it would be remiss of me not to mention our contract management software product, Contracts 365. SaaS based, robust, intuitive and user friendly, it provides an end-to-end solution for your contract management challenges. It’s based on Microsoft 365 - formerly called Office 365 – which is one of the most secure platforms in the world. Assuming that you are one of the million plus organizations using Microsoft 365 – your InfoSec Team, and your internal users, are likely already comfortable with the platform.
If You Have a Contract Lifecycle Management Solution, But Are Not Fully Leveraging, Now is the Time to Embrace It
If you already have a contract management solution which your organization has not yet fully embraced, now is the time that dust off that URL, and start using. We would, of course, still recommend that you check us out.
On a more serious note, many of us don’t start to use or embrace new technologies until we are forced to, or the value of using the application outweighs the inefficiencies present in our prior or manual processes.
In these times of remote working, the value of a contract management application is significant.
First, all good contract lifecycle management vendors provide what is referred to as a “robust and secure repository”. What is this? Simply put, it is the virtual, centralized storage location for all of your contracts. It is searchable so you can find previously executed agreements, and you can report against them. It is secure in that you should only have access to the information that your organization has designated as accessible for your role. The best contract management solutions will also have Artificial Intelligence/Machine Learning (AI/ML) availability within this repository which can auto detect contract metadata, and analyze and compare different provisions within the contract for risk. This robust and secure repository allows you to easily locate that contract that you’ve been seeking.
A contract management solution also readily facilitates your ability to both request a contract and to check the status of your contract. This provides immeasurable efficiencies for all involved in the process. For those requesting, you need only complete a wizard like template for your agreement. Depending upon the details of the transaction, your company may have an approval process which needs to be completed prior to sending out the agreement to the counterparty. All of this can now be automated, and accomplished within your CLM system. By leveraging this CLM system - as opposed to manual or email processes - you can also readily check the status of your agreement. Has your CFO approved it? Has it been signed? Check your contract management software application.
Equally liberating, your contract managers need not manually prepare an agreement or provide an ongoing status regarding its whereabouts. And, by using templates, your organization will benefit from reduced risk as only pre-approved, current terms and conditions are contained within the templates. There is no longer the possibility that an old or outdated version of an agreement was used, or that someone repurposed a version with very specific terms and conditions.
From a management perspective, embracing your contract management lifecycle application also allows bottlenecks to be readily identified. Are we losing time in Legal? In Finance? Do we not have enough resources or are there other issues in flight which are slowing down our contracting process? Most contract management software applications have dashboards which readily provide this information to your management team so that the appropriate steps can be taken to ensure your contract management process is as efficient as possible.
And, one of my personal favorite benefits of our contract management software application is the ability to electronically sign the agreement. While it was fun to sprint down the hallway after our CFO, signing our agreements electronically removes all of the unnecessary manual steps in executing an agreement including the signing process, itself, as well as scanning the fully executed agreement and storing it in the appropriate location. The best contract management software applications will support auto tagging of signature fields so you need not manually tag these each time. They will also support preapproved emails and reminders to the counterparty to sign the agreement, and the ability to automatically save the fully executed agreement to the correct location within your repository - with the correct metadata.
And, If You’re Fully Embracing Your Contract Management Software, Now is the Time to Maximize Its Value
The meat and potatoes of most contract management software applications are the request, approval, signature and filing process. Automating only these activities more than substantiates an ROI for a contract management solution. As an active user of your contract management application, you are likely already benefiting from many of these efficiencies.
So, why not take it to the next level?
The more sophisticated systems can support a variety of additional post execution activities which will introduce value and efficiencies not only to your Contract Management Team, but also your Executive Team and Business Users. This functionality includes robust, automated and manual reporting, metrics on a variety of different elements of your contract lifecycle, the ability to manage and evidence obligations both singularly and on a recurring schedule, and integrations into a variety of other systems including your Customer Relationship Management (CRM) system including Microsoft Dynamics or Salesforce.
Automated and manual reporting can take place on any metadata element which has been captured – through manual entry or by the system. These reports can be scheduled to be sent on a predetermined or ad- hoc basis to designated individuals within your organization. Your Contract Managers, Business Users and Executive Management Team can have all of the data at their fingertips necessary to do their jobs.
Metrics, or workflow metrics, measure the amount of time that it takes to complete the various stages of your contracting process. This information can be presented in a variety of different ways to include contract types and contract resources. Armed with this information, your organization can make informed decisions about potential efficiencies which can be introduced into your contracting process.
Managing and evidencing obligations singularly and on a recurring basis ensures that you are delivering to your customers – and that your vendors are delivering to you – what has been promised in your contracts. This is important, of course, from a customer relationship perspective. It is more important, however, for risk mitigation and compliance as your failure to deliver on your obligations can result in a variety of fines and penalties to your organization.
Last, integrating your contract management software application with other back-end systems including your CRM system provides numerous benefits to your organization. Not only can your end users “live” in the environment or system where they feel most comfortable, various efficiencies are introduced including improved visibility and communication, increased productivity, shorter sales cycles, improved compliance, data accuracy and standardization.
Now Really is the Time to Embrace Contract Management Software
While COVID has slowed us all down – in some good and not so good ways – business will continue to move forward. As contracts are at the heart of every business transaction, now is the time to implement, embrace and maximize the value of your contract lifecycle management solution.