Businesses of all sizes create agreements but don't always think about what's involved in managing contracts. Managing contracts can quickly become overwhelming without adequate contract management principles. Ignoring key contract management principles can create unnecessary admin work, costs and cause contract negotiation delays which compound with complex contracts. This article provides the key stages and principles of effective contract management so that organisations of all sizes can service contracts faster and make contract data usable.
What is a contract management process?
A contract management process, also known as contract lifecycle management, details the stages a contract will go through from its creation, signature, performance, expiry and beyond. The challenge with most contract management processes is that different stakeholders and tools interact with the contract at each stage which makes it challenging for an organisation to track contracts and the data they contain.
A contract management process should explain who is responsible for the contract in each stage and how a contract should proceed from one stage to the other and the steps which need to be followed when a contract is blocked in one of them. For example, if a client requests an amendment to a contract term, the contract management process should explain which amendments should be escalated to the legal team and which ones can be acted on without their intervention. Clearly defining these contract process playbooks will ensure that new contracts are processed swiftly.
What are the principles of a successful contract management process?
The key principles of a successful contract management are transparency, communication and accessibility. If a contract is waiting for someone to move it to the next stage and the key stakeholders or person who is meant to move document is not aware of the document, where it is or how to access it, then it is likely that the contract negotiation time will be unnecessarily increased. The principles of effective contract management ensure that contracts can be tracked and tasks acted on quickly.
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How can contract management software create value for your organisation?
Contract management software helps ensure that the key principles of contract management are implemented effortlessly. Contract management software also allows companies to monitor the expected business benefits of managing contracts better. Contract management software helps manage risk and satisfy increasing compliance by providing visibility into contract data and making it accessible to key stakeholders. Finally, using a contract management solution can help reduce costs and unlock value for companies by helping them better understand their contract terms.
What are the obstacles to contract management software adoption?
Businesses trying to reduce costs will often minimise their investment in legal services as these are often expensive. However, not using a contract or using an out-of-date template can cause unnecessary risk and expenses for your business when the contract delivery does not go according to plan. This means the businesses which have experienced contract mishaps are more likely to appreciate the value of contract management solutions as they can help better manage the risks involved with creating and managing agreements. Businesses which do not generate a lot contracts are also less likely to appreciate the value of contract management even if their processes are not ideal.
How to create and manage contracts on no legal budget?
Legislate is a contract management platform which makes creating, signing and managing business contracts easy. Legislate provides lawyer-approved agreement templates which can be tailored to your business requirements by answering simple questions. Finally, Legislate provides visibility in the different stages of contract management so that your business can sign contracts quickly whilst meeting its contracting responsibilities and obligations.
About Legislate
Legislate is a contracting platform where business owners can create contracts to help grow and develop their business. Legislate's employment offer letters and contracts are key in protecting your IP and Legislate's NDAs are crucial to ensure you can have conversations and partnerships to help develop your business and brand. Book a demo or sign up today to put the confidence back into contracting.
The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.