Businesses will not feel the pain of managing contracts until they’re growing rapidly. The moment they do, that problem has already become a bottleneck, blocking their operations.
The case of a growing investment bank proves this.
The inefficient paperwork caused their customer acquisition cost (CAC) to go up and their closed deals to go down. When they used a contract workflow management tool, they were able to grow their client base without additional internal overheads.
That’s exactly why you need enterprise contract management, especially when you have the ambition to scale and expand in the future.
In this article, we discuss the benefits of using enterprise contract management, who should take advantage of it, and what to look for when picking out a solution.
Let’s get right to it!
What is enterprise contract management?
Enterprise contract management (ECM) refers to how companies handle contracts in an efficient and streamlined manner through contract automation software.
Enterprise contract management software is designed to simplify the process of managing enterprise contracts.
This process involves an automated, end-to-end optimization of contract workflows, avoiding the manual procedures that cause costly mistakes. It also includes monitoring important contract milestones like renewals, expiration, and payment schedules so you don’t miss any of them.
The purpose of using such a contract management solution is to maximize contract-related operations so you can fully harness its financial value.
How does an enterprise contract management software work?
Contract management systems use a central database to store contracts and related data in an organized, easily searchable format. The software helps:
- standardize the draft creation of different documents using templates and clause libraries,
- top management and stakeholders oversee the contract lifecycle — they get automated alert notifications, and
- involved parties seal deals and start execution faster using an integrated digital signature tool.
These capabilities of an enterprise CLM make it easy to keep track of all contractual activities, ensuring that every archived document is always accurate and up-to-date.
Who needs enterprise contract management software?
Just about any department that has to deal with contracts can benefit from a contract management solution. Generally, we could group the software users into:
- People who are responsible for creating and managing contracts. This group includes contract managers, lawyers, and legal counsel who work with contracts on a daily basis.
- People who must sign contracts. This group includes CEOs, company presidents, stakeholders, and other high-level executives.
- People who must comply with the terms of contracts. This group includes employees, suppliers, and customers.
Let’s look at some specific cases of how different specialists can benefit from automated contract workflow:.
Contract management for HR
Suppose you’re an HR manager who regularly onboard new employees — both local and international candidates. You’d need to keep the contracts moving smoothly to sustain the operations, fill in the demand, and enable the company to achieve goals faster.
Having a reliable HR contract management software can help with that. The pre-lawyered templates from the software let you process the contract alone without bothering the otherwise swamped in-house lawyers. Not only that, a great employee onboarding will improve retention by 82%.
Here’s a case study of how an HR department streamlined employment processes and managed to save the hiring budget.
Contract management for Legal Counsel
As a Legal Counsel, it’s your job to make sure that all of the contracts your company enters into are fair and legal. That’s why most deals go through you before they’re executed.
The contract automation software can give a clear overview of the contracts’ status with automated reminders/notifications and help fasten negotiations. Thus, contracts don’t become bottlenecks of a sales process. That also makes keeping track of important terms for negotiation and dates like expiration or renewal a lot easier.
Contract management for Sales director
If there’s a possible deal, sales directors and managers need to act fast. The software simply lets them draft independently without bothering in-house lawyers ― cutting down the time spent on contract drafting.
When signing comes, it becomes fast with the tool’s native integration to eSignature providers.
Contract management for IT manager
For an IT manager, contract lifecycle management software can make sure that the company’s contract systems are compliant with industry standards.
The enterprise CLM automates the tracking and managing of contracts. Even during the procurement process, they can help document management.
Contract management for top management
CEOs, managers, and stakeholders use this kind of software for tracking and managing the company’s contractual obligations. It gives an overview of the signed vs lost contracts ― potential opportunities vs risks for the business.
When the performance of the contract is easily seen, it’s easier for the management to make informed decisions about the continuation of a contract or the renegotiation of its terms.
Benefits of enterprise contract management software
If you’re still on the fence about investing in enterprise contract management software, consider reading these benefits. They might change your mind. We highlight 7 of them below.
They have centralized, searchable repositories
You know how traditional contracting goes. According to McKinsey, employees spend 1.8 hours every day searching for documents and looking for information. However, with ECM you can get rid of this wasted employee time. All of your important files are stored in one place and are easy to find with a quick search.
They let you use templates and clause libraries during document generation
Contracting nightmare ― spending hours copying and pasting text from one document to another. Simple contracts like NDAs and Power of Attorney can be drafted with pre-built templates stored in the software’s library. Or if you need to insert clauses you used previously, it lets you insert them from a library into your draft.
They allow you to create flexible and configurable contract workflows
If you’re still hunting down the right person just to get approvals from all the necessary people, that’s inefficient. You can instead make sure that everyone is on the same page using contract automation solutions. They let you set up custom contract workflows that fit your specific needs like routing approvals and signing.
They automate every contract workflow stage
Manual contract management is a tedious process, thus it’s error-prone. In fact, poor contract management costs companies 9% of their annual revenues.
Workflows for finding the right contract, negotiating the terms, getting signatures, and making sure that everyone is abiding by the contract are complex. Automating the process will save you time and money while reducing the risk of errors.
Their audit trails give 360-degree visibility
This means that all stakeholders and contract owners can see every step of the process, from negotiation to execution. This level of transparency lets you see the complete history of user activity, including which files were accessed, by whom, and when. Audit trails also make it easy to identify bottlenecks.
They give increased contract security
Here’s one of the sworn benefits of a contract management system ― they have rigorous authentication procedures to make sure your contract data is safe and secure. That involves password-protected files and integrations with reliable, trusted service providers like digital signatures.
Convinced, yet? So if you’re now on your way to purchasing the software, here are some features to look for.
Picking the right enterprise contract management software
With so many options available, it can be overwhelming to find the one that is right for your business. Here are some criteria to consider when choosing a software solution.
Ease of use
To begin with, you should look for enterprise contract management software that is easy to use with an intuitive interface. You’ll want to find a new partner that will reduce the burden of your current status. Not one with a steep learning curve and requires you to spend hours figuring out how everything works.
A good enterprise CLM should be user-friendly, with an easy-to-navigate layout and simple, straightforward workflows.
Look for a platform that is highly configurable and can be customized to fit your unique business requirements.
Suppose you deal with a large number of contracts regularly, you will need software that can handle a high volume of data. Same thing if you have a lot of different types of contracts, you’ll need software that allows you to configure custom workflows.
Automatic notifications and alerts
One important factor to consider is whether the enterprise contract lifecycle management software offers auto-notifications and alerts. This feature ensures that contracts are renewed on time and that any revisions are promptly communicated to all parties involved.
User management & collaboration
A good contract management software should make it easy for users to collaborate and manage their documents. It should offer easy collaboration between coworkers and external parties. Let your colleagues review, approve, or reject your contracts before you send them out.
Contract management software should help your business stay compliant. Here are some certain functions to look for.
- Offers role-based access control so that only authorized users can access sensitive contract data.
- Has an audit trail so you have a complete record of all the changes that have been made on a contract ― who made what changes and when.
- Has workflow management that automates most of the contract-related processes to be compliant with industry regulations.
Security should be one of your key considerations since you let the software handle sensitive information. These features can include password protection, data encryption, and access control. Also, mind a reliable enterprise CLM that makes signing contracts as secure as possible.
One of the most important features to look for when choosing enterprise contract management software is customer support. Ideally, you should receive support from the software company if you have any questions or run into any problems. Good customer support makes a huge difference in whether you’re able to use the software successfully.
Manage business contracts better with modern enterprise CLM
Don’t let paper contracts and manual processes bog you down. Your high-growing business needs a tool that will streamline your contract lifecycle management (CLM).
When you have an enterprise contract lifecycle management like Avokaado in place, you can transform your contract processes completely ― reducing processing times, improving compliance across the board, and driving your company to hyper-growth.
What features are we proud of? Here are some.
- Centralized contract repository. This is your template library where you can keep all your templates, update them, and re-use them to draft contracts in minutes. Here you can break contracts into clauses so they’re kept in a clause library.
- Automation. Simplify and speed up the editing, approval, and signing workflows to ensure that contracts are processed efficiently. Automate the tasks, such as sending reminders/alerts, and collecting eSignatures.
- Secure user collaboration. Share documents with colleagues and clients for external collaboration and negotiations via a public link. Assign different right levels and user groups for your team and external collaborators too.
If you’re looking for an easy-to-use, cloud-based contract management solution that will help organize your business and automate your contract processes so you can scale faster ― we suggest you try Avokaado CLM.