That old cliché that says, “you get what you pay for” is just as relevant for contract management software. And while it can be easy to get caught up in the short-term costs of enterprise-level contract management software solutions, the truth is it is much more expensive to use low-cost contract management solutions.
If you find yourself in a situation where you’re trying to convince your bosses about getting good quality contract management software, you need to think about it from their point of view.
What tangible benefit does enterprise contract management software (CMS) offer? Why not get a free or low-cost version?
The answer is simple: enterprise level CMS offers tangible financial benefits that the low-cost alternatives simply cannot compete with.
The 5 reasons there’s a high price to pay for using cheap contract management solutions
We’ve already mentioned the main reason your company wants to invest in an enterprise level CMS. However, we thought we’d break it down into five areas that will demonstrate why the investment is well worth it.
1. Avoid sensitive contacts residing in low-security programs
Without a secure place to store your contacts, it’s hard to keep track of who has what information. It also makes it difficult to comply with regulatory rules, such as deleting personal information (in the form of, for example, resumes) when they are no longer required. Which is now mandatory for any business that has to comply with GDPR.
A CMS can house all your sensitive contacts in an organized and easy-to-find way. It will also ensure sensitive personal data can only be accessed by those who need to see the data, and then also make sure it’s deleted when no longer required.
2. Control who can access and use your business contracts
How do you manage your business contracts at the moment? Do you use the old-fashion paper filing system, a digital form, or both? Where and how do you store them? And who has access to this information?
Not having a centralized system in place can cause a lot of headaches for compliance reasons as well as research reasons. If your company has contracts across paper and digital, that can take a lot of time for staff to hunt down details.
By placing your contracts and their relevant data in a contact management solution you ensure the right people can find the information when they need it: and quickly. Not all contract management software offers this service; that’s why you want to find one that offers centralized and secure contracts as part of their solution.
3. Don’t miss renewal—or when to delete— contract dates
Not knowing when your contracts are up for renewal can absolutely hurt your business. If contracts auto-renew without your knowledge, it can be a costly experience, lead to less favorable terms, missed deadlines, loss of opportunity to renew business, as well as the potential for payment errors.
Instead of going through a PNL statement trying to figure out what accounts for money disappearing, use a CMS solution. Enterprise quality ones allow you to set notifications and alerts based on dates, data, and rules. This will mean you’ll never have to worry about missing or being unprepared when a contract is up for renewal.
4. Don’t get bogged down in the mundane processes
Low-cost contract management software solutions are often a misnomer, insomuch as they don’t often solve a great deal. They have limited functionality and capacity.
The ideal solution is to use a contract management software that allows you do to more with less. More than that, it should also decrease risks and human error; and increase efficiency, productivity and profitability.
5. Low-cost CMS solution cost you money
If you really want to reduce expenses you want a quality CMS that can provide unique analysis such as:
- The expense related to contracts with auto-renewal provisions.
- Expense related contracts with contingent pricing or terms.
- All contracts listed I order of annual spending rate.
At the very basic level contract management software—for it to be worthwhile—must at least provide secure repository, reporting, alerts, and searching. The obvious benefits to this are centralized records which lead to better organization. The other benefit is data protection.
Too often, low-quality, or low-cost contract management software doesn’t support the full contract lifecycle. Which, for larger organizations, doesn’t really help all that much. Especially, for organizations that are trying to grow and scale their business.
The advantage of an advanced contract management software
The upfront cost of advanced contract management software may give you pause. However, think about it like this: you can have the low-cost option which will invariably fail to support the whole contract lifecycle. And it more than likely will not be flexible enough to scale with your organization.
The return on investment of ContraxAware’s contract management software is that it helps to improve processes, minimize risks, save time and reduce costs. Our CMS solution is a mix of machine learning and artificial intelligence to help you and your team do more than just manage contracts.
It takes the basic stuff out of your teams’ hands so they can do the more creative, the more complex, and the more profitable work instead. So, yes, enterprise contract management software solutions involve a higher initial investment, but the payoff is a positive long-term impact for your organization.
If you would like to know more about ContraxAware can help you, please feel free to contact us today.
FAQs about low-cost CMS solutions
In this brief list of FAQs, we look at questions not answered directly in the above article. If you have questions not answered in the article or in the below FAQS, please feel free to get in touch.
What is the major disadvantage of low-cost contract management software?
The biggest disadvantage of a low-cost contract management software is that it doesn’t provide support for the whole contract lifecycle. Which leaves staff to still sift through information and make sure everything is on track.
The idea of a CMS is to minimize risk, and reduce the time staff spent on the menial and mundane tasks that can be successfully and effectively automated.
Why shouldn’t I use free contract management software?
The only time you should use a free contract management software is if it’s a trial for something you intend to integrate in to your business. Free CMS solutions don’t have the same level of security, flexibility, and functionality of an enterprise CMS.
The other reason you won’t want to use free contract management software is because quite often it’s not just one program but rather three or four different ones you have to try and use in concert. This can obviously be messy and lead to errors.
Why should I buy enterprise contract management software?
You really should only buy an enterprise level CMS solution if you want to invest in the success of your organization. An enterprise level CMS solution will streamline processes for faster and more efficient outcomes as well as help to improve productivity, profitability, and staff morale.
If you want a way to stay on top of your contracts—both internally and externally—and ensure all proper procedure, protocol and regulations are met every time.