With the fresh start of a new year, you may be taking the opportunity to evaluate many of the processes you use in your business on a daily basis — including your contract management. Do you have a clear view of how your contract management system works? What about how you’re ensuring that your contracts meet your goals? Also, do you know what problems exist with your contract management software and how to fix them? Perform a comprehensive evaluation every year, and run these smaller, more frequent tests every quarter. Start by trying these steps to get a better look at your contract management in 2020 and how it impacts your business.
1. Consider Your Current Requirements
As you evaluate your contract management processes, start by considering your current contract management requirements. If you already have contract management software in place, consider how well you’re utilizing it — and if it’s a good fit for the new year. As your business grows and changes, your contract management needs may change along with it. For example, a filing system works fine when you need only handle a few dozen contracts a year. But that will change drastically when you suddenly need to deal with hundreds.
Consider your current requirements for contract management as you move into 2020. This is a great time to evaluate the overall health of your contract management system — a process you should undertake regularly. Ask:
How many users does your contract management software need to support?
As your business grows, your staff grows with it. So you may also need to increase the number of people who can access your contract management solutions. You may also need to change how you grant permissions and access since you may have a more diverse group of people accessing your contracts.
Are your current processes for contract management in 2020 working for everyone who uses them?
Connect with each department that uses your contract management software, from the sales and negotiation team that puts together your contracts to the team that ensures compliance and execution of the contracts. Take a look at your contract approval process. Make sure that the system works effectively for every member of the team, and consider what changes you might need to make if it doesn’t.
Once you’ve taken a hard look at your real needs, you can better determine whether your existing contract management solutions are meeting those needs. You can also see where you may need to make changes as you move into the new year. If you’re not sure exactly what you need, consider the criteria for an ideal contract management system and how having that system can help improve your ability to manage your contracts, free up your employees’ time, and ensure customer satisfaction.
2. Evaluate Your Contract Management from the Customer’s or Vendor’s Perspective
Effective contract management solutions don’t just work for your company. They also work for your customers and vendors. There are several common problems that many customers have with visibility into specific contract management processes as well as the contract management process as a whole. Take a look at how your customers may view the system. You can even create a false account that will allow you to move through the contract process as a customer, so walk through the whole process.
How long does it take for you to approve contracts on your end?
The longer it takes to approve your contracts, the harder it may be on your customers. While you want to be sure that you create rock-solid contracts that cover both your needs and your customers’, you also want to streamline the contract approval process as much as possible. An automatic contract scoring process and contract templates can both help streamline the contract approval process, improving overall customer satisfaction with the process.
How do customers view the contract?
Do you have an effective file-sharing system that will allow customers to view contracts as easily as you can? That may not be enough. It also needs to integrate with the programs that your customers are already using.
How do customers interact with the contracts?
Many customers prefer to complete as many tasks as they can virtually. It’s more convenient, and it allows them to easily share documents or permissions with the correct individuals at their workplace. If your contract management in 2020 doesn’t allow for online viewing, storage, and signing of contracts, including requesting alterations when needed, you may be adding steps to the process that frustrate and slow down your customers.
Great customer experience is paramount, both when it comes to your customer service and to your contract management processes. By evaluating your contract management needs from your customers’ perspective, you can streamline your processes to deliver a better experience for all your customers.
3. Evaluate and Solve Problems with Your Current Contract Management System
It’s easy to assume that contract management is something that just happens for your business. You’ve taken the time to put together the contracts, and the process moves smoothly enough. In order to make your contract management processes more effective and gain more insight into those processes in the coming year, however, take the time to evaluate and solve problems with your contract management system. First, read this brief analysis of what an ideal contract management system looks like. Then, consider:
Who can access contracts?
Ideally, you want a contract management system that allows access to all the individuals who might need access to it, but that closes down access to people who don’t need to access contracts at any given moment. A cloud contract management system, for example, may make it easier for all members of your team to access necessary contracts wherever they go. At the same time, you want a secure platform that will allow you to assign user permissions based on the specific role the user fills.
Do you have a high level of security in place?
The more private customer information you have in your contracts, the more you may need to make sure that you provide a high level of security for all your users. Secure contract management in 2020 can help prevent the theft of customer data, preventing your business from facing costly fines and fees. Without adequate cybersecurity standards, on the other hand, your contract management system could create a number of problems for your business.
Are you able to maintain a high level of visibility throughout the contract cycle?
Many businesses struggle with contract visibility throughout the cycle. You may not maintain full awareness of your contracts, including important compliance requirements, renewal dates, and more. If you don’t have that high level of visibility, it could pose significant problems for your contract execution. We recommend you regularly run these five reports to maintain that visibility and protect your system’s data integrity.
Is your team mistakenly using the wrong contracts?
Over time, the needs of your business change. You may need to add more details to your contracts because legal requirements in your industry have changed. Alternatively, you might find yourself needing to alter your existing contracts to accommodate changes in customer needs. If you have outdated templates in your contract management system, now is the time to remove or update those contracts to ensure a more successful contract creation and approval process for 2020.
Is your current contract management system allowing you to accept an excessive amount of risk?
Effective contract management in 2020 should score the risks associated with each of your contracts, preventing you from mistakenly accepting too much risk when you take on a new contract. Whether working with your vendors or your customers, you want to protect your business at every step in the process. Protect your company from the dangers of an opaque vendor contract management system by looking for these five pain points.
Does your contract management system work effectively, with minimal intervention?
Technology is a wonderful thing. Cloud-based contract management software makes it easier than ever to keep up with your important contracts and track their implementation. If that technology poses more difficulties than usefulness, however, it can leave you struggling. Choosing a proprietary contract management system — rather than an open-source one — is a solid investment. Proprietary software can go a long way toward helping you combat any problems with your contract management in 2020 by providing access to tech support.
Identify potentially invisible problems.
In many cases, you may not clearly notice problems with your contract management software or processes. You may assume that everything is moving smoothly. But, in reality, there are small problems that could prevent you from negotiating, approving, and executing contracts as effectively as possible. Identify the potentially invisible problems in your contract management system, including:
- Contracts that fall through the cracks. Both vendor contracts and customer contracts should remain highly visible. Initiate reminders that let you know when a deadline is approaching or the contract has sat for too long. Then contracts will stop disappearing from your radar.
- Employees who struggle to use the system effectively. You may have employees who don’t know how to use your system or who aren’t taking advantage of its features. They’ll substitute with manual steps, which may make you may miss out on important goals and deadlines.
- Contracts slipping through the approval process with too-high risks. Each year, you need to reevaluate your risk-scoring system to ensure that you don’t approve contracts that carry too high a risk for your company.
4. Implement an Effective Training Program
If your employees are going to make the most of your contract management in 2020, they need to know how to use it. Poor user training can turn even the best workflows and software into dead weight. With good training, on the other hand, you can take advantage of all the features offered by your contract management program. You can also make sure that all of your employees can access the data they need. This may include:
- Allowing your sales team to access contract templates.
- Letting negotiators know the details that go into scoring your contracts.
- Providing your employees with access to exactly the information they need.
Evaluate what your employees already know.
Talk with each team that will take part in your company’s contract management in 2020. Also, consider whether those team members are using it to full advantage. Do they know what features the contract management software offers for each type of contract? Do they know how to effectively utilize your existing software? Start with a full evaluation of how your employees are currently using that software and where they could use improvements. Ask them where they’re struggling. If you do not have a staff member who can answer those questions, contact technical support to ask.
Institute regular training.
If you notice that your employees are struggling to use the software and workflows that back you contract management in 2020, catch it early. Institute a training program that will help give them a better idea of all its features and how it works. An employee who understands the basics might need more assistance, for example, to better understand effective contract scoring. You may also want to design a training program or protocol for new employees or for employees who move into new positions. Make sure your training systems are robust and you have plenty of software support. If you’re looking for new contract management software in 2020, choose enterprise contract management software that brings these four key areas of support to the table.
5. Check for Any Holdups in Your System
If your internal processes aren’t in line with what it offers, that’s a problem. You can bog down your contract management processes and make it difficult to get contracts approved and executed effectively. Evaluate potential snags and holdups in your contract management in 2020. For example, are you:
- Requiring too many people to approve each contract as it moves through your system?
- Allowing a contract to sit for too long before moving forward in the system?
- Tracking your contracts as they move through the system? Then, you’ll always know what stage they’re in and what is needed next.
- Using processes that move the contract from the negotiation phase to the execution phase smoothly?
If you identify potential bottlenecks that could prevent contracts from moving smoothly through your system, 2020 is an excellent time to change your processes. Review your contact management system now to help move contracts through faster all year long. Ultimately, this can increase your revenue and decrease your overall costs.
Your contract management system is an important part of maintaining your business. This year, make sure you handle it more effectively and have a higher level of visibility into your business by following these key steps. Contact us to learn more about our contract management solutions and how they may improve contract management processes for your business. Also, you can try out our software with a 7-day free trial.