What is Contract Data and How Can You Use It?
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If you’re only thinking of a contract as proof that an agreement took place, you’re missing out on most of its value. The truth is that contracts contain invaluable business data, which you can leverage to negotiate better terms, drive revenue, and forecast risk.
Here we’ll explore what contract data is, why it’s important, and how you can unlock it from your agreement documents.
What is contract data?
Contract data is all the information found within a legal document. This can include names, dates, dollar amounts — any detail that goes into building a contract.
Why is contract data important?
Whose name is on the contract? When did they sign? What type of contract is it? How many of that type of contract does your company currently manage? Far from simply telling you the parties involved, contract data is a wealth of information just waiting to be unlocked and leveraged to drive stronger financial performance. Let’s see how.
How can you use your contract data?
If you’ve ever had to search for a single expiration date in a specific contract, think about how long that took. What about how long it takes to find dates for hundreds of contracts? Now imagine if you could use software that would automatically analyze that data, along with other critical details from the contract, in seconds.
Here are some examples of how contract management software can extract key data from your agreements — giving you enhanced visibility into costs, and helping you forecast budgets and manage risk more effectively.
Quickly review agreement details
When you upload a contract into the contract management software, you can extract key information with just a click. You can extract the parties to the contract, effective dates, and a short description of what the contract entails — saving you time and helping you avoid missing key details.
Reduce compliance risks
Contract management software does more than just extract contract metadata. It helps you get more out of that metadata, so you can stay ahead of potential compliance issues. With a contract management platform, you can:
See tracked changes to documents in real time
Know what’s happening with your contracts at the moment it’s happening — so nothing slips through the cracks.
Improve version control
Quickly compare different versions of a contract, and toggle between versions with just a click. No more accidentally using the wrong version and having to go back to fix costly mistakes.
Standardize contract review with approval workflows
Use approval workflows to set automated approval chains for contracts in review. By making sure each person or team reviews each contract in the proper order, you can automatically standardize review processes across your organization.
Automatically get alerts about key dates
With automated alerts on every contract, you’ll automatically get notified about upcoming renewals, cancellations, and opportunities to renegotiate — so you can take action and capture more value from every agreement.
Keep your agreements organized and easy to find
Instead of spending valuable time searching through multiple drives and folders to find the right contract, you’ll be able to find any text in any agreement simply by typing it into the search.
When you don’t have to spend as much time manually searching for contract data, the entire contract management lifecycle (CLM) is smoother and more efficient. Reviews are faster, documents are easier to find, approval workflows mitigate future compliance issues, and turnaround time is reduced.
Collect new insights
Because contract management software is analyzing multiple contracts across your company, it can see things that a single person or team might miss. These seemingly small details can make a big difference when it comes to organization, negotiation, and even budgeting. For instance:
Document retrieval
If you have many contracts with different vendors, contract management software makes it easy to retrieve the ones you’re looking for with just a few keystrokes. You can search the full text of Word docs, PDFs, and even scanned documents — so you can zero in on the data you need, faster.
Negotiation
By being able to see all contracts with the same vendor, you can more effectively see how your contracts’ terms have changed over time. When you’re able to clearly see any changes to a contract’s duration, costs, or conditions, you’ll be better equipped to negotiate more favorable terms going forward
Budgeting
The more contracts you can analyze, the more insights you’ll gain into your vendor relationships. Contract management software can extract and organize contract terms in far less time than it would take a human, so you can get to insights faster.
Compliance
With audit trails, you can see who on your team is doing what with each contract. That means you’ll always have objective documentation in case of an audit or compliance review.
Since you’re probably managing many different vendor relationships in parallel, contract data can help you understand how much you’re spending on each vendor, and when. Then you can compare actual spend against projected spend, and zero in on vendors who aren’t cost-effective, so you can cancel those agreements or renegotiate for better terms.
Contract management software takes every piece of data within your contracts, and helps you leverage that data for better contract management. All the information is there. It’s time to make it work for you.
