Complexity is an unavoidable part of scaling businesses. Hence, organizations require a scalable contract management solution to deal with their expanding operations. They need transparency and a single source of truth to go through the contract cycle without constant bottlenecks.
The numerous divisions and sectors that make up an enterprise work in diverse capacities to achieve a single goal. Sales, HR, finance, and procurement departments need contracts to carry out their duties. When contract management progresses through an organization without a unified system or strategy, it can delay the processes and dampen the results.
What is enterprise contract management?
Enterprise contract management is a comprehensive approach aggregating all the legal agreements and contracting processes with a unified system and operation. It provides oversight into the contract lifecycle across the organization. Through contract management software, businesses may expand contract-related tasks beyond the legal department.
Delegating contract management responsibilities to other teams empowers organizations to benefit from their expertise. But when the contracting process is fragmented, it perpetuates miscommunication and inefficiency. Fortunately, enterprise contract management empowers the invested parties to stay on top of the contract lifecycle. It provides a centralized hub for businesses to create, negotiate, review, share, and store legal agreements.
Why is enterprise contract management necessary for businesses?
The legal department of any organization has the expertise and tools to carry the contracting process to fruition. However, burdening the legal counsel with all contract management duties may put too much strain on them. Moreover, they would not be able to give due attention to high-value tasks. Enterprise contract management enables the legal division to manage the contract lifecycle while passing over some responsibilities to other relevant teams.
Enterprise contract management incorporates shared responsibility and accountability into the contract process without giving way to bottlenecks or inefficiencies. It is also helpful for businesses with numerous deciding authorities with a stake in the contract management process. Here are some reasons to adopt enterprise contract management to expedite the contracting process.
- More time for high-value tasks
Enterprise contract management enables the entire business to participate in the contracting process. Consequently, the legal division does not have to spend endless hours on low-value and repetitive tasks. They can assign these administrative duties to other departments without compromising the credibility of the legal agreements. Thus, organizations can generate compliant contracts without constant intervention from the legal division. It enables the legal department and senior counsel to concentrate on assignments of high value.
- Improve collaboration among departments
Companies rely on legal agreements to move their business forward. The contracts vary from the sales agreement to the employment contract. Since the content and source differ from document to document, there is a lot that the legal division can gain by collaborating with other departments on contract generation. Thus, every department can bring its expertise to the table for efficient contract management. For instance, the sales department can provide insights and information for creating sales agreements. Enterprise contract management software empowers businesses to collaborate and communicate effectively during the contractual process.
- Reduce friction
When more than one department is working on a project, there are bound to be boundary issues and stepping on toes. In contract management, there’s always friction between the legal and other departments. The legal always takes rein during the contract lifecycle and sharing the responsibility with other teams can be challenging. Enterprise contract management enables multiple teams to work together on contracts without running afoul of one other. Businesses may utilize the knowledge of several departments without having to deal with the hassle of a complicated contractual procedure.
What are the rewards of enterprise contract management software?
As contracts are integral to the sustenance of a business, their credibility can make and break an organization. That is why, no matter what tool or strategy enterprises adopt to optimize the contracting process, the end goal is always to create competent legal agreements.
Enterprise contract management software is an opportunity to accelerate contract creation without losing credibility. It provides a contracting system that can cater to the unique needs of various departments. Sales, legal, finance, and so on can utilize the uniform procedure to create compliant and consistent legal agreements. There are numerous other reasons to adopt enterprise contract management software; here are 10 of them.
1. Legal stays in control
Enterprises call for legally viable and efficient contracts. The contractual agreements must stay true to federal laws, legal language, and organizational policies. Naturally, the legal department is the best person for the job. But when several departments are involved in the contracting process, it is challenging for the legal division to track the progress.
Fortunately, enterprise contract management software comes with cross-functional visibility and real-time updates. Moreover, the system offers customized review and approval workflows to ensure the credibility of the legal document. Therefore, the legal team can stay on top of the entire contract lifecycle. And the various departments can contribute to the contracting process, while the legal maintains the final level of ownership. It ensures that only legal-approved contracts make it to the signing stage. Thus, adopting enterprise contract management software means competency will never be an issue for businesses dealing with thousands of legal documents.
2. Access to current information
One of the challenges of contract management for enterprises is keeping track of all the different versions of legal agreements. It might be challenging to ensure that everyone participating in the contracting process has access to real-time information when too many stakeholders and teams are involved.
Enterprise contract management software offers organizations a means to keep tabs on the legal agreement as it progresses through the contract life cycle. Users can set document status notifications to stay updated about any contract modifications. The holistic view of the contract lifecycle and version history ensures that everyone receives current and accurate contractual agreements. Thus, even with hundreds of contracts and stakeholders, there is no scope for document developments to slip away.
3. Centralized contract data
For legal and other teams to successfully collaborate on contract generation, they need a single source of truth. Conflicting information and processes can lead to human error, inefficiency, and duplicate content. Adopting enterprise contract management software empowers organizations to bring consistency to the contracting process.
Users can store all the active and inactive contracts in a centralized repository. When all the stakeholders can easily access and search contract data, they do not have to depend on the legal for every bit of information. Consequently, it increases data transparency and consistency in the contract management process.
4. User permission
Involving too many stakeholders can get out of hand for scaling organizations. One minor error in the contractual agreement can mean financial liability, sore customers, or even litigation. That is why organizations must take utmost care while handling legal documents.
With enterprise contract management software, organizations can restrict access to the contracting process. Therefore, only authorized personnel can create, edit, review, and share contractual agreements. Customizable dashboards and user permissions help enterprises with numerous approvers to incorporate accountability into contract management. Enterprise contract management software also helps to ascertain the security of sensitive contract data.
5. Guidelines for contract generation
When numerous departments contribute to contract creation and management, organizations find it challenging to establish compliance. For instance, self-serve contracts by the sales team may not follow the guidelines laid down by the legal department.
Standardizing the contracting process helps organizations to guarantee competent contracts even with multiple creators. Pre-approved templates, clause libraries, and customizable workflows available with enterprise contract management software enable users to create compliant legal documents. Thus, legal can ensure all the contractual agreements coming out of the enterprise stick to the same language, stipulations, and policy.
6. Contract reports
Customizable contract reports are the best way for enterprises to stay ahead of significant dates, workflows, and milestones. When the legal department is working with other teams to manage the contract lifecycle, it is quite easy to lose track of key events.
Thankfully, enterprise contract management software comes with automated reminders for contract review, renewal, and expiry dates. Therefore, all the invested parties will receive timely notification and take prompt action. And the stakeholders across the enterprise can follow the progression of a contract agreement.
7. Bulk actions
In scaling businesses, the legal department spends endless hours on repetitive administrative tasks. These manual contracting chores are a waste of legal counsel’s time and expertise. Enterprise contract management system empowers the organization to perform bulk activities, where they can carry out contractual tasks en masse in just a few clicks.
Users can create, share, review, sign, and edit an enormous number of contractual documents within minutes. Thus, it eliminates the need for legal counsel to go through each contractual document individually to perform any action. It also helps to avoid human error and inconsistencies that come with manually carrying out the process.
8. Integrations
Enterprise contract management software is an efficient approach for organizations to optimize their contract lifecycle. But businesses often have varying challenges when it comes to contract management. For instance, the needs of a non-profit organization may differ from those of a healthcare company.
That is why the enterprise contract management system offers the possibility of integrating with other advanced software to improve its efficiency. Organizations can integrate their contract lifecycle management software with Salesforce CRM (Customer Relationship Management), e-signature solutions, Microsoft Dynamics CRM, and more to suit their demands and challenges.
Takeaway
For businesses dealing with contracts at scale and diverse departments, enterprise contract management software is the perfect solution to create compliant legal agreements. They can adopt the contract templates, bulk actions, integrations, and centralized location offered by the software to ensure that the whole organization is on the same page when it comes to contract management. Thus, there is no misconception or inconsistency with the contracting process. When every invested party can successfully collaborate on contract generation, it means greater contract value, returns, and relationships.
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