What is Enterprise Contract Management?
Enterprise contract management is solution for legal professionals that enables better negotiations, faster contract creation, minimizing costs and time associated with contract completion. It allows handling contracts more effectively with its collaborative capabilities that include authorship, search, and administration.
Why is Enterprise Contract Management important for contract operations?
Businesses today strive to maximize performance while keeping expenses under control, which is difficult given the current difficult market conditions. The use of cutting-edge Artificial Intelligence (AI) led Contract Lifecycle Management software to streamline enterprise contract management processes is one of the key ways that businesses can achieve strict cost control targets. Best-in-class businesses who use this technology find opportunities for cost reduction and avoid inefficiencies.
Large datasets, repetitive activities, and administrative efforts are all part of contract management. While many businesses now use contract automation to handle these, some are still lagging behind. With the first phase, automation, they can advance the maturity of enterprise contract management swiftly. AI is just now catching up to automation in terms of reaping the technology’s positive effects.
Contracts are essential legal contracts that are very important in business. Contracts are typically used to secure and govern 60 to 80 percent of all B2B transactions (Gartner). While small businesses only manage a few thousand contracts, large businesses deal with tens of thousands. Regardless, there are far too many contracts to maintain manually, and monitoring compliance can be dangerous and difficult.
Contract administration becomes increasingly challenging as firms grow and more transactions are made. Exactly for this reason, legal technologies like contract automation are becoming more and more common.
While contract automation is the fundamental technological advancement, many businesses have gone beyond it with AI and machine learning. But the zero to one increase that results from using contract automation makes its application obvious.
What are the challenges with Enterprise Contract Management?
Today’s in-house legal teams handle increasingly complex and multi-layered agreements. A moderately complex contract can have numerous intricate terms and conditions, veiled obligations, and complex service levels and regulatory requirements.
On the other side, there is a perpetual pressure to “do more with less”. Although these responsibilities lead the in-house legal teams to focus their energies on more strategic and transformational activities, they are spending a lot of time on operational tasks — leading to unmanageable backlogs and inefficient operations.
Businesses maintain a total of 20,000-40,000 contracts (PwC). Despite that, up to 85% of companies still use manual methods or partially automated methods to manage them.
Inconvenient Storage Method
Storing contracts in a set of folders or flash drives makes it difficult to find them quickly and efficiently as and when needed. Moreover, Aberdeen Group’s research reveals 12-15% of all contracts are lost due to rudimentary processes.
Tracking Contract Progress
Manually tracking hundreds of contracts is cumbersome. Automated contract management workflows provide visibility into contract progress and enable quick closures by sending alerts and reminders to stakeholders if the contracts are stuck at any stage.
Absence of Version Control
Manual processes or basic document management can’t record all the changes made to contracts. With no detailed history, you might face a hard time meeting audit demands. Automation maintains an accurate audit trail and ensures that the latest versions are accessible to the stakeholders in real-time.
Unwanted Auto-Renewals
It is possible that even though you intended to cancel or renegotiate a contract, you missed the deadline and it was renewed. Here, the automated alerts and notifications regarding renewals, expiry, and other important deadlines can be extremely helpful.
Inability to Track Compliance
According to Aberdeen Group, 60% of corporate litigation takes place over contracts. So, it is clear that companies struggle to stay compliant, and it roots in the inability to track compliance. Contract automation continually keeps an eye on your contracts and alerts you in case of any discrepancies — helping you save time and money.
Risk of human errors
To Err is Human. But every error has a price, whether it be in terms of money, time, or energy. By removing the possibility of human error, contract automation technologies make sure that your company is protected against such undesirable situations.
How Automation Helps Different Phases of Contract Lifecycle Management
Contract Request
Enterprise contract management software enables legal teams to use RPA (Robot Process Automation) to standardize the contract request process, assuring the capture of all necessary data straight away. The requester fills out the request form; if the data is acceptable, the request moves ahead; otherwise, it is refused and returned to the requester. There is no need to find the parties to get the information you need.
Contract Creation
After receiving contract requests, enterprise contract management software makes contract creation simple, saving you from having to enter data manually. It expedites authorship and prevents the use of inappropriate contract forms or non-standard language by using customized contract templates and pre-approved provisions. Utilizing the integration of NLP (Natural Language Processing) and OCR (Optical Character Recognition), third-party contracts are also incorporated into common contract templates.
Tracking Reviews and Approvals
Before being signed, a contract must be carefully examined by the legal staff. When a request is overdue, automated workflows notify the requester and forward the request to the designated reviewers. It must go through several layers of paralegal approval after the review stage before being executed and brought to life by the GC or CFO.
The most recent versions of the contracts are kept up to date, and CLM automation tracks all modifications, providing insight into every aspect of what was changed, when it was changed, by whom, etc.
Contract Execution
A contract must be carefully reviewed by the legal team before being signed. Automated workflows send notifications when a request has been outstanding for too long and route the requests to the appointed reviewers. After the review phase, it must pass through multiple levels of paralegal approvals before being executed and brought to life by the GC or CFO.
The newest versions of the contracts are maintained and all changes are tracked by CLM automation, ensuring visibility into every detail such as what was changed, when it was changed, who modified it, etc.
Contract Repository
Documents kept in a contract repository software may be easily searched for and accessed by users from anywhere in the world. There is no need for back-and-forth emails for approvals because all the agreements are in one location, which results in quicker approvals. Users can also configure notifications depending on variables like contract expiration, contract utilization, and changes in market pricing.
Post-award Contracting
Your legal team won’t have to expend too much time or effort tracking contracts once they have been executed thanks to contemporary contract analytics software like Zycus. By monitoring milestones and KPIs, they automatically assess contract performance. Important deadlines, renewal or expiration dates, and other information are also communicated to users, reducing the possibility of unauthorized auto-renewals.
Watch an interesting video on Post-award Contract Management
Benefits of Enterprise Contract Management Automation
Saves Time and Improves Accuracy
With legal contract management software, your legal team will be able to get rid of many administrative tasks like manually intaking contract requests, tracking renewals and approvals, collecting all the required signatures, and so on. This will not only save time but also eliminate the risk of human error and ensure accuracy.
Faster Contract Turnaround
Automation speeds up the contracting process by taking up tedious tasks such as tagging agreements, sorting large volumes of contracts and identifying risky clauses, etc. This allows your legal team to complete more work in less time, increasing their productivity.
Improved Compliance
For every $1 that is contract-compliant, businesses save on average 22 cents. By tracking performance against obligations and entitlements, Zycus contract compliance software enables you to maximize contract value while controlling risk with proactive insights and compliance.
Increased Visibility into Contract Data
A sophisticated CLM solution automatically tracks all the contracts and offers deep visibility into the contracts. It notifies the users regarding important milestones such as renewal and expiry dates, deadlines, and so on.
Always Audit-Ready
your legal team will always be ready to face an audit with detailed history of contracts revisions during review and approval stages — what was changed, when it was changed, who changed it, etc., How Zycus iContract helps in Enterprise Contract Management
Why choose Zycus iContract for Enterprise Contract Management Automation
Ease of use
Through constant product innovation, we have designed a CLM that is remarkably easy to use. We realize that you are busy, and CLM that you need to use everyday needs to be easy to use, with quick notifications, interactive dashboards, all designed to help you create and manage contracts better.
Efficiency
Whether you are searching for historical data for contracts or for impending contract obligations, our muti-parameter search, dynamic reporting, and configurable dashboards all ensure that you get the fastest, most accurate results for your critical workflows.
Experience
Our icon led communication, easy creation and authorship workflows and enriched call to actions all ensure that you look forward to working on contracts with Zycus iContract CLM.
To know more about contract management software features, connect with an expert.
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