The companies of all sizes and across industries are realizing the importance of a Contract Management System. A contract management system helps the companies maintain a complete control over their contracts that represent critical business relationships and also impact their top and bottom line.
While evaluating a Software solution for Contract Management, the companies typically focus on three areas, which also define the three stages of Contract Management System adoption in companies.
In this stage, companies feel the need to have on-time, easy and secured access to their contracts. They look for a system that can provide a central repository for contracts. A system that allows them to categorize contracts, and make them easy to find through advanced searches. The confidentiality being a critical aspect of the contracts, companies want a system with a robust and role based security framework.
Once the contract visibility problem is solved, the companies try to streamline their Contract creation processes. They want to make sure that there is a standardized process for drafting, negotiation and approval of contracts.
In this stage, companies look for a system with features to store templates, to create standard clause libraries and integration with MS Word or other commonly used authoring tools. They want a centralized way for the employees and departments to submit a request for a new contract and then track the progress on such requests. They also require a rule based workflow engines to control the approval processes.
Contract Performance Management
In this stage, companies are looking for tools to ensure Contract compliance and performance management. They want to capture Contract specifics eg. Pricing, Payment Terms, Milestones etc in a structured way and then use them against transactional system to evaluate Contract performance. They expect the system to generate alerts when there is a deviation from the agree-upon terms in the contracts.
Depending upon the immediate pain points, a company’s Contract Management initiative maybe focused on Visibility, Authoring or Performance but it is always good to be familiar with the complete Contract Lifecycle and the typical adoption stages. It will help a company choose a solution that can meet the growing needs as the company matures in its Contract Management efforts.