In times of market uncertainty, economic upheaval and layoffs, a business continuity plan becomes the mainstay of survival. Disruptions in the political climate, wars and risks of insider security threats call for an automated system that digitizes contractual obligations within an environment of regulatory compliance. Legal professionals across a broad spectrum of businesses around the world are thus looking at ways to ensure that contract management remains operational through crisis and change.
An efficient end-to-end automated Contract Management System (CMS) fosters a strong business relationship with its customers, vendors, government agencies, and human capital, making way for greater profitability.
What are contract management systems?
Contract Management Systems are the automated process of contract creation, execution, collaboration, tracking and analysis to ensure compliance with the contractual terms, the laws of the land and timely renewals for minimizing exposure to financial risk. A centralized contract management system provides transparency, accountability and implementation of the terms of contracts for an efficient contract data management system for every project.
Some typical Contract Management System features include speed, seamless collaboration and sharing, security, scalability, searchability and a centralized contract repository.
The Need for Contract Management Systems
Contract Management Systems replace the traditional approach to contract management – lengthy contracts, endless paperwork, and physical file cabinet storage – using a software suite to digitize contracts and paper documents for easy collaboration and implementation across multiple offices.
In the post-coronavirus era of a remote work culture and video meetings, a legal Contract Management System is the go-to platform for simplifying contract management.
Virtual management of contractual processes does not require the physical presence of the parties to contract or signatories and makes collaboration between departments, Head Offices and Branch Offices easier. The need for a Cloud-Based Contract Management System is felt in these departments: HR, Legal, Sales, Finance and Operations.
How to select a CMS? What are the features to look for?
Contracts are a critical part of any business activities, including hiring. They set out the rates/salaries, service levels, terms and conditions to ensure that a business operates smoothly without disruptions.
A company’s Contract Management System incorporates important minutiae and takes control of a company’s risk exposure to vendors, third parties, and disgruntled employees. But for a contract document management system to perform successfully, companies must look at CMS software with some key features. Here’s a look at the top features you need to consider:
1. Reusable built-in templates
A contract editor allows contract managers and legal teams to pre-defined templates that participants can use for businesses. Built-in templates allow customization of the contract language on multiple topics for reuse by various departments.
2. Configurable workflows
Configurable workflows are critical features in a Contract Management System. They facilitate automated contract reviews and endorsements for faster approvals. A core workflow management system streamlines the method of drawing up and executing new contracts.
Such tools in place make contract implementation more seamless. By averting backlogs and delays, organizations can prevent loss of revenue from hold-ups due to permissions and recommendations.
Automated customized approval workflows also allow the selection of which contracts to approve and provide reminders to speed contract execution. Workflows ensure transparency to see that all steps execute with automated contract tracking throughout the pre or post-execution stages.
3. Centralized storage
As the volume of contracts handled grows, the storage feature of the Contract Management System matters. Smart centralized storage solutions enable easy access as contracts are stored post-signature in a central repository. The centralized storage feature of a Contract Management System offers higher security of documents.
4. AI/ML- Based Intelligence
The right Contract Management System for your business will include capabilities of analytics and reports, with integrated AI/ML for action intelligence on contracts handled, executed or renewed.
CMS software, with AI, can extract the right data and organize it for timely reminders and implementation. Thus businesses must look for systems that extract this information for effective contract management.
Contract Management Systems must have the flexibility to adapt to different business models, use cases and industries.
6. Multi-language support
This feature endears to all business users working in different offices, locations and countries. The automated language translation is fast becoming a sought-after feature.
7. Contract redlining
It enables teams to negotiate contracts in real time for centralized contract arbitration with contract redlining support, also helping contract tracking with detailed audit trails.
8. eSignature functionality
Companies must look for Contract Management Systems with functionality of native eSignatures. This feature allows teams to implement electronic signatures to contracts from any location, office or device. It does away with the wet ink or scanned signatures that are a part of traditional manual contract workflows. But the automation underpinning of a Contract Management Software with built-in eSignature makes the execution of contracts easy and seamless.
9. Real-time alerts
Contract Management Software with automated alerts and reminders for renewal helps contract tracking and adhering to deadlines for robust risk management. It ensures parties to the contract adhere to terms and deadlines without much human intervention or back-and-forth.
How the right CMS can make a difference?
CMS software which fulfils the business requirements of a company, significantly impacts the bottom lines.
Let’s take a quick look at how the right CMS can make a difference in your business:
- To begin with, an efficient CMS that onboards new employees and ensures hiring standards comply with the industry norms always attracts the best talent. Human resource is a valuable asset of an organization, and retaining the best talent is integral for the health of a company.
- Mitigates financial risks.
- A powerful CMS can help minimize risks associated with contracts with automated triggers on deviation from pre-defined terms and renewal dates.
- Makes workflows seamless and error-free.
- Centralized access to contracts and related data streamlines the business process.
Businesses may want to consider the following KPIs for optimal performance of their Contract Management Software.
- Consistency in quality and fulfilment of contractual obligations
- Reliability on contract tracking and reporting
- Timely implementations for automated obligations such as renewal alerts, dates of task completion, and milestone reports to avert contract oversight.
What is the Best Contract Management Software?
A good CMS software is an all-in-one contract automation platform that makes the creation, execution and tracking of contracts a seamless process. One such CMS platform that helps companies administer their contracts across the lifecycle is TrustHall. It is a plug-and-play solution for all your contractual needs, an offering from WNS-Vuram that powers companies from across different industries.
A contract data management system integrates legal and financial aspects of contracts in a single integrated platform. For companies implementing contractual agreements on a regular basis, a robust CMS can make a difference in brand image, bottom lines and shareholder confidence. Get started today!