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Digital contract management is quickly becoming an essential part of the modern business world. It helps companies streamline their processes, save time and money, and ensure compliance with legal requirements. With digital contract management, organizations can manage agreements from start to finish in a secure online repository.
This article will explore the key benefits of managing agreements digitally and provide best practices for its implementation. We’ll discuss how it simplifies document storage and retrieval, automates workflows, reduces the risk associated with manual processes, increases transparency, and much more.
6 Benefits of Digital Contract Management
Managing agreements online offers a great variety of benefits to businesses. Below, we will explore the key advantages that apply to most companies, regardless of their size or industry.
1. Efficiency and Time Savings
Managing agreements digitally streamlines the contract lifecycle by automating repetitive tasks such as contract creation, approvals, deadline notifications, and contract renewals. In a study by WorkMarket, 54% of surveyed employees stated they could save 2 hours per day thanks to automation. This amounts to 240 hours per year.
2. Financial Savings
Managing contracts online can help companies save money in a variety of ways. Automation reduces the costs associated with manual errors and process delays, and it lowers manpower requirements. It also reduced printing costs and minimizes penalties due to missed deadlines or non-compliance. Managing agreements digitally also allows for greater visibility into spending, which can help identify areas where savings can be made.
3. Enhanced Contract Compliance
Digital contract management software helps organizations ensure all agreements comply with internal and external regulations. Companies managing their agreements digitally tend to have fewer contract audit issues. This results in fewer penalties, reduced litigation risk, and improved reputation.
4. Improved Accuracy
Managing agreements online can help lower contract risk and reduce the number of errors. This is because it eliminates the risks associated with manual data entry and tracking. Cloud contract management systems also include useful features to improve contract accuracies, such as contract templates and clause libraries.
5. Centralized and Secure Data Management
Contract lifecycle management software provides a centralized contract repository for all agreement-related data, making it easy to find, access, and manage documents. Additionally, cloud-based CLM tools offer enhanced data security, mitigating the risks of data breaches.
6. Better Decision Making
Data-driven insights generated from contract analytics help organizations understand performance and trends, aiding in more informed strategic decisions. This can help improve overall business performance and processes.
It’s undeniable that digital contract management is essential for many businesses, as it provides a great range of benefits. By utilizing the features of CLM tools, companies can improve their overall business performance and remain competitive.
6 Steps for Implementing Digital Contract Management
If digital contract management implementation is not part of your business strategy, you may be missing out on the numerous advantages it has to offer. At first, it may seem overwhelming, but with the right guidance and tools, setting up this process is easier than ever. And, in the long run, it can help provide more efficient and cost-effective contract management.
To realize this vision, here are 6 steps to making this digital contract future a reality.
1. Analyze Your Current CLM Process
First, it’s important to understand the difficulties and benefits of the current process. You can start by asking yourself these questions:
- What works and what are the major pain points?
- Who is involved, and what is the standard process?
- Are there company guidelines for contract language, storage, and usage?
- What is the current rate of agreements that get signatures versus those that go unfulfilled?
- Is the storage and retrieval process efficient after a contract is finalized?
Answering these questions shows where there is room to grow in the process, and what a CLM system should deliver. However, it’s important to focus this analysis not just on one department, but throughout the whole company.
Of course, this is especially true among the departments that heavily rely on the use of agreements. Each individual should be able to determine what their weaknesses and strengths are before implementation begins.
2. Identify a Power-User Department
Carefully monitoring contract KPIs in one department of power users – likely Legal, Sales, or Procurement – leads to defined success metrics and ROI. An organization-wide rollout is key to getting the full benefit of the CLM tool. However, focusing on the behavior of power users will allow for quickly scaling up gains in efficiency.
A team of executives, key stakeholders, and internal experts can take note of these power users to assess the needs of each department as they roll out the platform. This expert team can also serve as advocates for the digital contract management system to ensure the full adoption of online contracts throughout the organization.
3. Implement the CLM Platform Universally
Alongside the power-user department, the platform should be implemented throughout the entire company. All relevant employees should be trained on how to use the software and what the best practices are.
Some CLM software companies, such as Concord, offer free onboarding. This means that a dedicated customer success manager should be able to perform personalized demos for the team and answer all questions during the implementation.
Ideally, throughout this training, stakeholders should observe compliance and any other issues that may arise, and adjust implementation accordingly.
4. Increase Awareness and Compliance
As implementation continues and teams are in training, an important part of adoption is ensuring that each employee understands why the platform is being implemented, the overall goals, how to best use it, and what the protocol is.
For employees to be fully compliant with company contracting protocol, they need to have a comprehensive understanding of what company standards are. Naturally, these guidelines help avoid ambiguity and the risk of non-compliance.
By using standardized language, clauses, and procurement practices, the company is at less risk. A CLM platform should provide a repository for Legal-approved templates and teams should have certain permissions based on their teams or roles. Maintaining compliance will streamline processes and result in faster contracts, and as a result, a higher ROI.
5. Measure the Impact of the Digital Process
Going digital will greatly increase your efficiency and access to information, but it’s important to track metrics throughout the implementation. Has the ability to capture, store, monitor, and access information increased speed and results?
Obviously, a CLM platform should streamline processes, not make them more difficult. While there may be an initial learning curve, a good contract management system should have teams working smarter and faster in a matter of weeks or months, not years. In addition to speed, aspects such as compliance, agreement language, collaboration, and the number of contracts processed should improve as you continue to use the platform.
6. Evolve and Adapt the Digital Contract Process
A digital CLM process should be one that grows with an organization, not one that limits growth. Implementing a CLM platform only to find that it’s outdated and unusable for your needs in a few years is frustrating and pointless.
Tools should be evolving alongside a company to advance it into the future. Part of implementation is noting what works and doesn’t, and how a team adapts and works with the platform. Recording these adjustments provides visibility into the team and which methods work.
Following these steps will not only help implementation go smoother, but will also increase the overall benefits of a CLM platform, driving growth, revenue, and visibility throughout an entire organization. It is also good to know and adhere to contract management best practices, as they can even further streamline your contract management performance.
A digital contract management system should be an integral part of any organization’s operations. Implementing such a platform requires some consideration and planning in order to get the most out of it, but it doesn’t have to be difficult. By following these steps and adhering to best practices, organizations can reap the benefits that come with having a CLM platform, such as efficiency, saved costs, improved compliance, and better collaboration on agreements. With the right implementation plan in place, teams will soon find themselves working smarter and faster than ever before.