Any business looking to modernize its processes, embrace important new technologies, or make any kind of digital transformation needs to consider contract lifecycle management. Contracts are often foundational for your business and crucial to maintaining your customer and vendor relationships. Without proper contract management, you could risk incurring penalties, wasting time, becoming liable, not fulfilling obligations, and more.
Contract lifecycle management is a vital component of your overall growth strategy. There are many ways to implement a strong contract lifecycle management system. Below, we dive into the top seven contract lifecycle management best practices you’ll need to consider.
1. Digitize Your Contract Processes
Manual ways of managing your portfolio of contracts can often result in errors making their way into documents, slower approval processes, and wasted money and time overall. As with any paper-based operation, manual contract management means people must search for files and locate them before physically transferring them to the next phase in the process. Even if you have already brought your contracts into an electronic format, a legacy management solution might mean they are in disparate folders, on different devices, and not readily accessible or secure.
True contract lifecycle management should involve centralizing all your contracts into an electronic repository designed specifically to house your contracts. This repository means your contracts are easily located, tracked, retrieved, and managed. They’ll also remain secure in a digital contract lifecycle management solution — ensuring only the right people have access to the correct documents.
2. Integrate Contract Management with Other Processes and Technologies
Look for a contract lifecycle management solution that will integrate with your other business applications, such as enterprise resource planning (ERP) systems and customer relationship management (CRM) portals. The solution should also integrate every aspect of contract management so you don’t have to bounce among tools to get work done efficiently. The right contract management solution will be designed for contracts so you can easily create, track, and report on contracts.
3. Introduce Automation
Contract lifecycle management needs to involve a level of automation to truly streamline workflows. The right solution will use automation to eliminate bottlenecks throughout a contract’s lifecycle. This might work in the form of automated email reminders sent to approvers, using e-signatures to speed up contract execution, and filing documents in automated ways to ensure you create an audit trail.
4. Consider Security
Contract management solutions must incorporate security features, so the confidential, sensitive data in your contracts stays protected. Look for aspects like role- and feature-based permissions to guarantee secure access. Tools like multi-factor authentication (MFA) and some form of encryption are ideal.
5. Leverage Compliance-Ready Tools
Your digital repository allows you to prepare for audits as you process contracts. You don’t have to spend days or weeks gathering the right materials in a rushed way. Automated alerts about contract expiration and other processes enable you to review key contract data as soon as possible to stay compliant. You won’t play catch up only to realize you didn’t renew a contract when you should have.
6. Improve Reporting
Contract lifecycle management solutions enable you to report on contract progress to see where workflows support your business and where you might be experiencing bottlenecks. The right contract lifecycle management solution will have a user-friendly, real-time, and interactive dashboard from which you can get insight into all your contracts.
7. Save Time Using Templates
Creating contracts from scratch can be immensely time-consuming, so leveraging the template and clause library aspect of contract lifecycle management solutions helps cut down on draft time. With clause and template libraries, your solution will allow you to use pre-approved language to speed up contract drafting and skip language that might delay the approval process or run you into legal snafus.
Modernize Your Contract Management Today
If you’re curious about how contract lifecycle management best practices can improve your business and set the stage for growth, contact All Star to speak to an expert.