How can I streamline my company’s contract management process?

Are you spending more time chasing down contracts than actually leveraging them? Do you ever find yourself scrambling to remember key dates, struggling to locate the right version of an agreement, or worrying about potential compliance pitfalls?

For many businesses, managing contracts can feel like a complex and frustrating juggling act. From initial drafting to final expiration, the lifecycle of a contract involves numerous steps and stakeholders; and without a well-defined process, things can quickly become overwhelming.

However, effective contract management doesn’t have to be a source of stress and inefficiency. In fact, a streamlined approach can significantly impact your company’s operations, minimize risks, ensure compliance, and ultimately contribute to greater success. By taking a proactive and strategic look at your current methods, you can identify bottlenecks and implement improvements that will save you time, resources, and potential headaches down the line.

Identifying bottlenecks in your current process

Before you can effectively streamline your contract management, it’s crucial to understand where the current inefficiencies and pain points lie. Think of it like diagnosing a problem before prescribing a solution: implementing new tools or processes without first identifying the root causes of your challenges can lead to wasted effort, ultimately failing to deliver the desired improvements.

So, how do you pinpoint these bottlenecks? It often involves a bit of detective work and honest evaluation of your existing workflows. Consider the journey a contract takes within your organization – from its initial request to its eventual closure. At which points do things slow down, become confusing, or lead to errors?

Common bottlenecks include:

• Manual tracking and storage: Difficulty finding and managing paper or disorganized digital contracts.
• Lack of standard templates: Inconsistent drafting leading to errors and delays.
• Inefficient review and approval: Slow, manual routing and feedback processes.
• Poor communication: Lack of seamless information sharing between departments.
• Difficult access to information: The process of finding specific contract details is time-consuming.

By taking the time to talk to your team and thoroughly assess your current situation, you’ll gain a clear understanding of the specific challenges you need to address.

Key strategies to streamline contract management

Once you’ve identified the bottlenecks in your current contract management process, it’s time to implement practical strategies for improvement and bring clarity, efficiency, and control to every stage of the contract lifecycle.

Standardize contract templates

Imagine having a blueprint for every common type of agreement your company uses; that’s the power of standardized contract templates. Standardizing contract templates provides a foundational blueprint for your company’s agreements, meaning drafting becomes significantly faster and more efficient as pre-approved key clauses and legal language are readily available. This also minimizes the risk of errors and ensures consistency across similar contracts, simplifying both review and ongoing management.

With a solid, standardized starting point, negotiations can focus on specific deal terms, accelerating the often weeks-long process. Furthermore, templates can be designed to incorporate essential legal and regulatory requirements, enhancing compliance. To maintain their effectiveness, these templates should include standard clauses covering aspects like payment, termination, intellectual property, governing law, and data privacy, and they should be periodically reviewed and updated with legal counsel to reflect evolving laws and business practices.

Implement clear workflows and approval processes

By establishing a roadmap for each contract, you improve accountability by clearly assigning responsibilities for each step and reduce delays by eliminating ambiguity about required actions and timelines. Furthermore, well-defined workflows enhance visibility into the contract lifecycle and ensure consistent processing for all agreements.

This structured approach also creates better audit trails, recording who reviewed and approved the contract at each stage. Typical stages to consider include request/initiation, drafting (often leveraging templates), review by relevant departments, approval, execution, ongoing management of obligations and dates, and finally, renewal or termination. Leveraging workflow automation tools, including CLM systems, can further streamline this process by automating the routing of contracts for review and approval and sending timely notifications and reminders. Ultimately, contract approval time can be potentially reduced by a whopping 50%.

Centralize contract storage and access

Centralizing contract storage in a single, organized repository, often referred to as a ‘single source of truth‘, is crucial for avoiding lost opportunities and potential liabilities associated with scattered agreements. This approach offers the significant benefit of easy retrieval through robust search functionalities. It also ensures version control, guaranteeing that all stakeholders are working with the latest and correct document version.

Furthermore, a centralized repository improves security by allowing controlled access to sensitive contract information, enhances collaboration among authorized users, and reduces the risk of contracts being misplaced or accidentally deleted. Options for establishing such a repository include secure cloud storage, shared network drives with strict organizational protocols and access controls, and purpose-built Contract Lifecycle Management (CLM) systems, which offer even more advanced features.

Leverage Contract Lifecycle Management (CLM) software

CLM platforms are specialized software solutions designed to oversee the entire contract lifecycle, from initial creation to final termination. Acting as a central hub, CLM systems automate numerous manual tasks and provide valuable insights into contract-related activities.

Key benefits include increased efficiency and speed through workflow automation, streamlined approvals, and reduced manual data entry. They also contribute to reduced risk and improved compliance by enforcing standardized processes, tracking obligations, and providing alerts for critical dates. For example, did you know that organizations leveraging CLM report a 73% higher rate of contract compliance?

CLM platforms enhance visibility and control over all contracts, offering a comprehensive overview of their status and key terms. Furthermore, they automate reminders and notifications for renewals, expirations, and other important dates, improve collaboration by facilitating seamless communication and document sharing, and offer data-driven insights through analytics and reporting on contract performance.

Settle on what you need to track and select a CLM solution that offers the features and functionality needed to make things smoother.

Ready to streamline your contract management?

Taking the first step towards a more streamlined approach might seem daunting, but remember that even small, incremental changes can yield substantial results over time. Streamlining your company’s contract management process isn’t just about making things easier – it’s about building a stronger, more resilient, and ultimately more successful business.

By understanding your current bottlenecks and implementing strategic improvements, from standardizing templates and defining clear workflows to leveraging the power of CLM systems, you’ll transform contracts from potential liabilities into valuable assets.

Our customers know their businesses, and we know CLM. Listen as they explain in their own words how Agiloft has helped them save money, boost revenue, improve efficiency, and reduce risk.