Top 9 Challenges of Contract Management01/08/2019
Contract management is not a simple or straightforward task – that’s why dedicated professionals need to take on the role and why there are some excellent contract management software solutions to help make things move along more smoothly.
Without knowing it, many businesses could be extending their entire contract management timeline due to the challenges they are facing but not dealing with when it comes to contract management. Yet this can be easily solved; those problems can be removed when they are tackled. So just what are these major contract management challenges, and what can be done about them?
Lack of clarity and transparency can be a major issue and present many future difficulties in contract management. By not being clear – or not realising you haven’t been clear – and issuing goals and objectives that everyone involved can understand, you run the risk of the task not being completed to your satisfaction, if at all.
Clear objectives are required for agreements that parties are entering into as well – signing without being sure of what it is you’re agreeing to can cause a cloud to hover over the agreement from the very beginning. This can make the ongoing business relationship much more difficult to handle.
Using a contract management software, you can include all the summaries of each major element of the contract, spelling out what is required on both sides throughout. This makes longer contracts, or those that are a little more complex, much easier – and quicker – to understand. Not only does this help going forward, but it ensures that the contract is signed in good time as well, since there will be no delays in understand what it all means.
Another big pitfall in contract management is the level of involvement each party is expected (and expecting) to have. Using contract management software means that the contract can be internally edited and approved before it is sent across to the other party in the deal. The other party can then do the same, and that way everyone will be completely sure of what it is they are expected to do within the confines of the agreement before it is signed and becomes legally binding.
Any changes that need to be made can be done immediately until everyone is happy with the agreement. Clarification on involvement levels is instant, and there will be far less chance of any disputes arising.
Unless everyone involved in agreement is included at each stage, it can be difficult to ensure that everyone is aware of the ins and outs of each document, and that they even know such a document exists – a team creating contracts in one part or a business may not be successfully communicating with teams in other sectors, even if they should in fact be involved (the legal team is one that springs to mind!).
Using contract management software means that everyone who needs to be involved can be added to the system. Every individual who is involved in the approvals workflows for your department or the business as a whole is able to instantly be alerted to anything that needs doing. Approval happens more quickly, and the right departments are alerted to anything they need to know about. Overall, the contract will be better managed.
When negotiations are extended it can make the entire process is at risk of never completing. Plus, it means that there is a longer lead time between gaining the order and being able to begin work – the more quickly a contract can be negotiated and agreed upon, the more quickly work can begin, and the more quickly money can start to flow. And remember, before a contract is signed any competitive exposure that your client might come across could help them to change their mind – the sooner the contract is signed the better.
Contract management software means that you can have excellent negotiations in a seamless way that avoids any frustrations and missed opportunities. Everyone involved can track the other parties’ changes and ideas within the process, and progress is going to be evident to all, which will reduce risk for all involved.
Focusing on the wrong things
It is all too easy to look at the terms and risks of a contract and focus in on a narrow set that is of most concern to you. Easy and, of course, natural. However, by doing this, you might be missing out on the fact that there are other terms that also need to be negotiated. If you use an online contract management solution, more than one person is able to review the contract before signing, which means it is much more likely that everything that needs to be discussed is noticed.
This not only means that everyone is going to be happier with the content of the contract, but that the involvement level is kept high which, as mentioned above, can be another issue in contract negotiation.
When there is little or no flexibility in contract management, negotiations can stall, and this can even mean that potential agreements are abandoned altogether. That can be a big blow for your business. Even if a contract can be created, lack of flexibility means that it is often not what people really want, and it can take something to go wrong before anyone cares to change aspects of the contract that they don’t like.
Digital contract management software offers an easy, open, transparent platform that gives the ultimate flexibility to all involved. You can avoid lack of flexibility and increase communication since the platform allows you to adjust to any changes that need to be made quickly and seamlessly.
Move to “business as usual”
If often goes that the handoff from the team that managed the contract to the team that needs to implement it can be slow and difficult. Often there are gaps in communication that are only noticed later on, when it is too late to deal with them in a way that won’t disrupt the contract.
A contract management software platform will plug these gaps by ensuring that everyone is involved in the entire process and has access to the details of each negotiation. Questions can be raised ahead of time.
Poor Follow up
Contracts should, ideally, be checked over regularly and followed up to ensure that all parties are happy with the terms, and that the contract is still something that is working for all involved.
This rarely happens in practice. There are so many things going on within any business, in all departments, that once a contract has been created and signed off, it really is a case of out of sight out of mind.
Not so when a contract management software platform is employed. This platform will remove these struggles as everything that is required will be in one single, simple place. The technology will allow for follow ups and governance at all levels.
Contract management has had problems in the past because the technology surrounding it was limited. It meant that despite good intentions, contracts couldn’t be managed as effectively as they can now. It was all rather inefficient and unsatisfactory.
Contract management software is the difference between arduous contract management and good contract management that everyone – no matter what side of the negotiating table they might be on – can get behind.
intelligentcontract is a highly customizable solution that provides a hub to store all your important contract paperwork, plus you get loads of useful tools that make your contract management process a breeze. We don't have a limit to either the size of documents of the total amount of storage, so you don't have to worry about extra bills if your central store of documents gets big.
For more information, to get a free trial or to organize a demo visit www.intelligentcontract.comBack to Blog
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