The difference between contract management and effective\ncontract management are huge. If your organization implements the best practice\nof contract management, you can see an immediate increase in revenuesand a\ndecrease in both contract-related costs and employee costs. \n\n\n\nThere are eight components to effective contract management. When all eight of these are in place you will need fewer staff hours devotes to contract administration issues and you will be better positioned to take advantage of new opportunities. \n\n\n\nHere are the eight components of effective contract\nmanagement:\n\n\n\n1. Version Control\n\n\n\nYou have to have a system for managing the different\nversions of draft contracts. Simply creating new file names in a file on the\nnetwork isn\u2019t enough. You need a document control system so that everyone\ninvolved with the contract is working on the same version. \n\n\n\nThis will also prevent the file from becoming corrupted. \n\n\n\n2. Secure Access\n\n\n\nYour contracts have a lot of sensitive and confidential\ninformation. A data breach could also put you in a breach of contract situation\nwith your strategic partners. \n\n\n\nYou need a system that does two different things:\n\n\n\nStrictlylimiting access to contracts and\nsupporting documents to authorized personnelMakes it easy for authorized personnel to access\nexactly what they need when they need it\n\n\n\nToo many firms focus on security without also allowing for efficient access. If decisionmakers cannot get to the contracts when they need them, your contract management process has failed. \n\n\n\n3. Workflow Management\n\n\n\nKeeping contracts moving through the process is one the\nbiggest problems in contract management. Often the sales team brings in a\ncontract that needs approval, only to see the entire process slow down to a\ncrawl. Papers get lost, and it takes weeks to get all of the required\nsignatures and signoffs.\n\n\n\nIf you have a strong workflow management strategy, youwill\nbe able to have alerts that let everyone know when they need to take action and\nthat makes it easy for salespeople to track where the contract is in the\nprocess. \n\n\n\nThis will allow you to move contracts faster and start\nserving customers sooner. \n\n\n\n4. Lifecycle Alerts\n\n\n\nMost contracts hinge on a series of dates. Many contracts\nhave expiration dates and auto-renewal dates. If you fail to take action by a\ndate mentioned in the contract you could end up losing significant sums of\nmoney. \n\n\n\nIf you have a system of lifecycle alerts, you will never miss a critical date. \n\n\n\n5. Compliance Alerts\n\n\n\nMany contracts have different performance bonuses and\npenalties. Sometimes these different clauses are tied to specific dates and\nsometimes they are tied to specific actions. You already know how critical contract\ncompliance is. \n\n\n\nA system of compliance alerts customized to the specifics of your contracts can make the difference between your organization turning a profit or running a loss. \n\n\n\nNever lose a contract again! Work more effectively, increase your revenue, centralize & secure your contracts. Available anywhere, anytime & on any device.Get your Free Demo today! \n\n\n\n6. Template Management\n\n\n\nTemplates are great tools for increasing productivity and\nensuring that your contracts have consistent terms as far as possible. \n\n\n\nProper template management practices keep templates updated\nand make sure that templates are not accidentally being overwritten.\n\n\n\nHaving specific templates, instead of just reusing older\ncontracts, helps to avoid potentially costly mistakes in final legal documents.\n\n\n\n\n7. Automation\n\n\n\nThere are a lot of mundane, repetitive tasks involved in\ncontract management. Automating these tasks reduces your personnel costs and\nallows your skilled employees to use their time on more profitable tasks. \n\n\n\nSome things that can be automated include alerts, workflow\nmanagement, and even some basic contract drafting tasks. \n\n\n\n8. Data and Analytics \n\n\n\nData and analytics are more than just buzzwords. They are\nvaluable assets. Your contracts are loaded with data.\n\n\n\nAn effective contract management system can\nharness that data and allow you to get insights into where you are losing time\nand money and who your most profitable contracts are. \n\n\n\nYou need some system that allows you to generate easy to\nread reports and keeps your data organized. \n\n\n\nThe most efficient way to implement all eight of these\neffective contract management components is to use a cloud-based contract\nmanagement system where these components are already built in. This saves you\ntime and effort in trying to build a system from scratch, and gives you access\nto experts to help you implement the software.