How To Establish Collaborative Contract Management Efficiently

Due to the numerous parties and stakeholders involved, collaborative contract management is a top concern for growing businesses. There is always a possibility of misinterpretation, human error, data loss, and misunderstanding as the contractual agreement moves through the contract lifecycle. Therefore, the ongoing process of creating, executing, and managing contracts requires active contributions from all parties. 

At every phase of the contract management lifecycle, coordination and communication among parties are necessary to guarantee desirable results. Organizations can band together effortlessly to improve operational efficiency with the help of intuitive contract management software.  In today’s article, we'll discuss the advantages of developing a collaborative approach to contract management and how integrations support it. 

What is collaborative contract management?

Collaborative contract management involves all the parties working together to oversee the contract lifecycle effectively. It is a type of contract management where it is the joint responsibility of all invested stakeholders and experts to see that the contractual agreement proceeds without needless hiccups and obstacles. The process includes contract creation, negotiation, review, approval, execution, and management. 

Thus, organizations need a shared platform and real-time communication channels for efficient collaborative contract management. Contract management software provides the means necessary to share common goals without miscommunication and avoid disputes in the future. It enables enterprises to eliminate inefficiencies in the contracting process and improve the bottom line. 

Why is collaboration crucial for contract management?

Collaboration among teams and stakeholders is vital for an effective contract management lifecycle. It enables involved parties to align their goals and achieve them successfully. Moreover, collaborative contract management ensures that everyone is on the same page when there are numerous participants and contract versions.

When the legal department is entirely in charge of producing contracts, they struggle to find the time to concentrate on high-value work. With collaborative contract management, sales, procurement, and other departments can contribute to the contract lifecycle, taking off the pressure from the legal counsel. Also, when teams handle their contractual agreements, it considerably accelerates the contract lifecycle. 

How to drive effective collaborative contract management

Contract management software goes a long way in instilling cooperation and open communication among parties and stakeholders throughout the contract lifecycle. It provides a centralized platform for all the collaborators to work together effectively and facilitate collaborative contract management. 

• Centralized storage

Organizations can securely preserve completed contracts and contract data using the cloud-based repositories provided by contract management software. Thus, businesses don’t have to go through multiple folders or devices to track a contract. All the invested parties can easily find the necessary information and documents within a single platform. 

Consequently, the other departments can utilize their expertise to establish contract compliance and performance. It is especially beneficial for businesses that always have thousands of active contractual agreements. During collaborative contract management, contract repositories enable organizations to establish visibility and provide access to the entire contract portfolio from anywhere, at any time.

• Cross-departmental transparency

Cross-departmental transparency is necessary for all teams to contribute to the contracting process; contract management cannot occur in a vacuum. For effective collaborative contract management, all the invested parties require extensive access to the contract lifecycle, from creation to negotiation, approval, and management. 

It is made feasible by contract management software, which gives users the ability to manage all aspects of contracting from a single interface. As far as contract management is concerned, there are no information silos present to limit the involvement of other departments in the contract lifecycle. Because of its greater visibility, the relevant personnel can obtain the necessary information at the appropriate time to promote efficiency. 

• Advanced search

Merely archiving contractual agreements in a centralized location doesn’t promote collaborative contract management. All the contract data and documents must be searchable and retrievable anywhere, anytime. Fortunately, cutting-edge AI and OCR features are available in contract management software.

OCR feature in contract management enables organizations to transform contract documents and images into readable and searchable text formats. For collaborative contract management, OCR allows users to add, retrieve or edit essential details in the contractual agreements, such as renewal dates, terms, conditions, party names, etc. Contract management software also provides advanced filters to make it easier for the invested parties to organize and fetch relevant contract information within no time. 

• Automated alerts

The key to collaborative contract management is staying on top of the contract lifecycle to track significant events and milestones. When contract management processes are disconnected, the other departments do not get the opportunity to oversee deadlines and establish compliance. 

Contract management software makes the job easier with automated workflows and notifications. Businesses can set up alerts for contract reviews, renewals, and expiries. Therefore, invested parties across the organization are notified of contract milestones and deadlines. Thus, every department can collaborate and rely on automated reminders to keep track of their contracts. As a result, the legal department can operate at peak efficiency to expedite the contract management lifecycle with whatever assistance they can acquire.

• Contract redlining

Negotiation is one of the most complex phases of the contract lifecycle. Multiple parties have to discuss and agree upon a mutually beneficial contractual agreement. It’s hard for any organization to keep track of all the changes, comments, and contract versions during the negotiation.

Contract management software makes the whole process simpler by automating the entire contract lifecycle. Digital redlining enables all the relevant parties to negotiate and comment on the contract in real time. They can easily track the history and receive timely document status to ensure that everyone is always on the same page. Moreover, it guarantees that only the approved and finalized contract makes it to the final stage. 

• Assign roles 

Organizations must adopt a systematic approach to collaborative contract management to derive favorable results. It is challenging to manually keep track of all the processes and approvers involved in the contract lifecycle. Organizations must assign and delegate duties to the appropriate personnel to avoid misunderstandings and miscommunications throughout the contract management lifecycle.

Collaborative contact management is as efficient as possible when the roles and responsibilities are clearly defined. It guarantees that each phase of the contracting procedure is carefully considered and taken into account. Thus, there’s accountability for every action, even if numerous parties and stakeholders are involved in the process. Also, the configurable dashboards and user-based permission make it easier for scaling organizations to collaborate without compromising efficiency or security.

• Integrations

Teams in charge of sales, finances, or procurement can be more suited to handle contracts pertaining to their expertise. In such cases, the legal team might need to involve them in the contracting process for significant departmental input. Contract management software integrated with popular business apps like Microsoft Business Central, Salesforce CRM, and Microsoft Dynamics CRM enables enterprises to include the entire organization in contract lifecycle management. 

For instance, CMS-integrated Salesforce empowers the sales team to self-serve contracts within the CRM platform. Because they are already familiar with the system, they can work together with the legal team to manage the whole contract lifecycle from within it. Moreover, businesses can auto-populate data to instill accuracy in the collaborative contract management process. 

What are the benefits of collaborative contract management?

Businesses need to uphold a multitude of standards when managing contracts, including compliance, performance, and competence. But when everyone in the organization can contribute without stepping on each other's toes, the entire contracting process becomes a little bit simpler. That’s where collaborative contract management comes in. It enables teams, stakeholders, and parties to work together to improve every stage of the contract lifecycle.

• Improve relationships

The cross-functional relationship significantly improves when the entire organization is capable of working together on contract management in a productive manner. Through the organized approach of collaborative contract management, individual departments can contribute to the contracting process without impinging on legal’s authority. 

• Establish compliance

It is simpler to accomplish a goal when several fractions are working towards it. Collaborative contract management ropes in all the impacted departments and stakeholders to contribute to the contract management lifecycle. Thus, it's easier to establish accuracy, compliance, and performance during each phase of the contracting process. 

• Reduce legal dependency 

Other departments can participate actively in the contract lifecycle thanks to collaborative contract management. They can self-serve contracts, track milestones, and manage obligations without compromising efficiency or performance. Moreover, it frees up the legal counsel to focus on high-value tasks. 

• Mitigate roadblocks

Every contract lifecycle deals with roadblocks and bottlenecks from time to time, but by working together to mitigate them as much as possible through collaborative contract management, an organization will have a much better balancing of contractual risks and returns.

Conclusion

When negotiating, reviewing, or approving the terms of certain contracts, the legal department may require significant input from the impacted departments within the company. The legal department will be in a better position to make the most of contractual agreements, streamline processes, and forge deeper ties across the organization when other teams like sales, finance, or procurement start to take part in contract management efforts.

Schedule a live demo today to explore the possibilities of contract management software.