Agiloft explains the purpose of cloud-based contract management software SaaS applications, its main features, the types of businesses and organizations that use it, and the benefits of cloud-based contract automation and artificial intelligence.
What is Contract Management SaaS?
Cloud-based Contract Management Saas (software as a service) manages the entire organization’s contract creation, negotiation, signature, renewal, and contract data analysis of legal contracts. The best cloud-based contract management software SaaS applications enable organizations and top-level business sales teams to self-serve, agree, and handle quick routine contracts and agreements at scale from a single, unified workspace.
Introduction to Contract Management Saas
Contracts are pretty manageable to support. Two or more organizations or parties get together to designate the contract rights and obligations. Both organizations or parties consent and then abide by their entire agreement. If issues occur, every person within both organizations may find the contract agreement and reference it to determine who held the error. This is where a cloud-based contract lifecycle management platform is designed to support your entire business and each of its contract agreements.
The entire contract agreement creation and support process used to be simple. Two people with a piece of paper had to sign a document. Some organizations, companies, and business processes have hardly changed, while some have changed radically. For example, digital licensing agreements across multiple streaming platforms or complex financial derivatives contracts are a real challenge to contract agreement writers. The complexity of cloud-based contract lifecycle management (CLM) is ever increasing, keeping pace with these demands.
A large enterprise may manage thousands of contracts per month. The volume and frequency of contracts will continue, almost indefinitely. Like almost every other organization or business process, making a move to digital technology, rather than using a hard copy, is transformative for efficiency, speed, and operating costs. Many providers of cloud-based contract lifecycle management can create an easy-to-use contract management process via digital workflows and contracts that are easily tailored to the company’s unique needs.
A vast number of companies have yet to make contracts digital. However, more and more companies embrace digital contract management solutions via cloud-based contract management software SaaS applications. This lets them focus less on legal and more on supply chain management. Focusing on the supply chain helps businesses boost sales through more efficient legal operations and streamlined contract management.
First, it’s important to demystify the key dialect around cloud-based contract management software SaaS applications.
- Contract lifecycle. The time in which a contract agreement is relevant. For example, if a subscription contract runs for two years, it has reached the end of its lifecycle when that date arrives. Many cloud-based contract lifecycle management systems use alerts and updates to manage users’ contract renewals.
- Electronic Signature (eSignature). The ability to add an e-signature to multiple contracts digitally within third-party contract management systems.
- Integration. When multiple standard software packages work in conjunction with the third-party contract management software applications.
- Negotiation. When different parties within a contract make changes to a document within contract management systems in real-time. If cloud-based contract management software applications are not used, both parties may negotiate and then make written changes to the contract.
- Obligation management platform. Once contracts are signed in contract management systems, obligations come into effect. They have deadlines that arise during the lifecycle of the contract. Managing contract responsibilities is a key task for every stakeholder who uses contract management systems.
- Contract templates. Contract management software SaaS applications allow users to create better contract templates for common documents on their standard terms. For example, suppose an organization employs all new starters on the same terms, with only changes to salary, name, start date, and so on. The employer may use a contract management system template to create a better document from an existing contract quickly, rather than building from scratch every time.
- Version control system. Version control systems can find previous versions of a document using a contract management system before both parties accept the primary one.
- Contract repository. A contract repository is the term for the post-e-signature storage area that houses multiple business contracts. It should be a structured and easily searchable solution.
What is the Contract Management SaaS Process?
A standard workflow for a contract management software application contains creating, collaborating, negotiating, signing, tracking, and renewing. This covers every stage for which a legal document is relevant to keep track of for the business. More and more these stages are managed using a contract software application to keep track of contracts, instead of manual contracting processes that were used for centuries.
Whether a company implements a contract lifecycle management (CLM) system or manages documents manually, the contract lifecycle stages and features are typically the same.
Create Better Contracts
Even though handwritten contracts are primarily nonexistent, many people still use word processing software applications to create better contracts. They find an old Word document, copy and paste, and change a couple of essential details to get a brand new contract. Here is the risk for error–it is easy for a user to copy across a detail such as a date, address, or ID that needs to be changed from a legacy contract. A new contract management platform changes the contract creation process.
A contract management software application allows users to create better document management templates from existing contracts for the most common contracts that their business needs, whether it’s an employment contract, a non-disclosure agreement, a sales contract, or more. The document management template effectively sets rules that the software application follows when instructed to create a better and brand new contract. With leading solutions, these templates can be created and modified using a clause library without exiting Microsoft Word.
There are many reasons why a contract may need many people to work on it. It may be a complicated set of terms and conditions. While a junior lawyer can handle quick and essential contract management, a more experienced lawyer must create a high-value contract’s jargon.
Document management is essential because organizations can use multiple contracts to affect several business parts. Those top-level teams and individuals may be in different offices across the country, making it hard to get them all in the same room to discuss proper document management.
Today, the best contract management software SaaS applications allow organizations to work on document management at the same time, just like in a Google Doc or Microsoft Outlook. These have different features that are specifically designed for a contract management platform. The features allow a business to use tools that send work-in-progress links to top-level teams within multiple locations by email. The features of approval workflows will enable users to specify the people who need to sign a document before it is used.
Here, negotiation is key. The first draft of a contract is rarely where it ends up. More contentious terms like purchase price, or the wording of an exclusivity or non-disclosure agreement, will probably be modified many times with software application features before every person agrees.
Contract management software features will let your team do this during their workflow in real-time online. It is often done with change tracking rather than editing documents, printing, scanning, and sending them around town. Gathering every person around a table to discuss an agreement is no longer a necessary workflow process.
Picking up a pen and scratching on an old tree is unnecessary when doing business. Digital contract management platforms allow technology to replicate a physical signature’s binary, permanent character. Some programs let you paste a scanned version of a written signature; some need you to type your name; others allow you to draw it with a mouse.
Many providers integrate with third-party contract management tools and e-signature tools, even facilitating mobile-responsive e-signing on handheld devices.
An e-signature is potentially a game-changing workflow process for the people who sit on the receiving end of most contracts. Signing your contract for a new job with your finger on a phone or agreeing on a sale contract from home instead of a lawyer’s office is transformative when it comes to user satisfaction.
Suppose your contract sits within a filing cabinet. In that case, it may be challenging to know how long it took to negotiate, which clauses in the clause library were changed, how many people read it, and how many people use it as the basis of multiple contracts, the key enforcement dates, and who’s seen it.
If your contract was created and managed as structured electronic contract data information and analytics, then this information is available at your fingertips. It can allow users to make intelligent contract decisions about which clauses to accept or which contract clauses to review. It can also be determined when to renew, how much to charge, and which notice period to define. These decisions can be improved with additional contract data, information, and analytics. Tracking abilities also have the potential to mitigate huge risks.
Monitoring data, information, and analytics via a contract review is designed to help modernize in-house legal departments and within the field of legal operations. Most innovative businesses can build contract data, information, and analytics dashboards from a contract review to monitor legal performance in different areas each day.
Contract management software features also give you the ability to take a holistic view of contracts, enabled by data, information, and analytics. Signatures don’t represent the end of the contracting approval process in contract management systems. They represent the beginning – additional obligations will follow for the people involved. Therefore, a contract management system should be in one place to monitor contracts as they progress throughout their lifecycle, with delivered alerts for every key stakeholder as a way to keep them updated. Users can jump back to contract creation in their contract management systems and begin all over again at the end of the life cycle. They may also need to add amendments to the contract. Again, contract management SaaS is designed to help.
Contract lifecycle management systems handle the creation, editing, and collaboration of contracts in one place using a post-signature management platform. A post-signature management platform features tracking dates and contract renewal deadlines.
Who will use contract management software?
Teams such as legal, sales, human resources, procurement, and finance are the primary users of contract management solutions. However, each business will have its own department or particular needs.
Contracts and lawyers often keep close contact. Law firms and top-level legal teams use contract management software features to manage their templates and daily documents and complete contract generation. Learn more about Saas contract management for legal teams here.
Large companies’ human resources departments usually produce a high volume of contracts, as they hire new employees on an ongoing basis. As non-lawyers, HR often relies on a contract management platform to generate lawyer-approved contracts for new hires. Some contract management solutions have integrations with HR’s every day tools.
Sales dislikes anything that gets in the way of closing deals, so they’ll often use a contract management solution for quick contract generation rather than needing to ask legal to create better contracts for them. Sales users will typically find management solutions that integrate with the software application they work in every day, like Salesforce. Learn more about Saas contract management for sales teams here.
Any large organization likely has a dedicated top-level team that uses a contact management solution focused on vendors procuring goods and services. This service involves processing supplier terms and – once documents are signed – keeping track of their contract renewal dates. Procurement teams also often require their contract management software include features that allow for seeking approval from multiple stakeholders elsewhere in the business. Learn more about Saas contract management for procurement here.
Finance teams typically need visibility to manage contracts for various reasons. They need to reconcile and manage contracts and billing and generate accurate revenue expectations for their business. Contract management software features facilitate this kind of transparency in their services. Learn more about Saas contract management for finance here.
Do I need a contract management system?
Legal and business teams often invest in contract collaboration when their volumes increase to a point where managing them in Word and shared Google drives is impractical. If you are signing a significant amount of contracts per month, you may benefit from trying contract automation software with artificial intelligence. It is also designed to help scale contracts with the team you have and avoid hiring a contract specialist.
Why is a contract management platform important?
Poorly managed contract processes may result in exposure to severe legal risk: contracts govern 80% of B2B revenue. Similarly, vast amounts of time is wasted due to inefficient manual contracting – World Commerce and Contracting found that 92% of the time spent on contracts goes toward the process.
Poor contract management creates friction between teams. A lack of velocity can hurt a company’s ability to close important deals. Poor management of the contract lifecycle can result in missed key dates, leading to expensive renewal costs. One of the contract management platform’s key aims is to establish a new record system to mitigate this risk.
Benefits to Contract Management SaaS?
Businesses often invest in contract management when they reach a specific size or stage of growth that is beginning to expand out of control. Risk increases rapidly, so it’s an excellent time to take control of the process.
Below are some key benefits to implementing digital contracting.
- Speed. Collaboration, negotiation, and signature can happen faster without the manual business processes that physical contracting involves.
- Collaboration. With cloud-based contract management software features, parties can immediately change the live document.
- Shareability. Once a contract is ready, email a link to the relevant parties – whether that’s a colleague who needs to do a contract review or the counterparty who needs to sign.
- Searchability. Managing contracts digitally means that there is a level of searchability that saves a significant amount of time over natural business processes. Finding concrete results digitally in milliseconds is preferable to wading through filing cabinets.
- Backups. Physical contracts are vulnerable to loss or destruction due to unforeseen events that leave both parties unsure of their rights and obligations. Cloud-based contract management SaaS solutions keep documents indefinitely and back them up regularly to eliminate the risk of loss.
- Scalability. Many rely on cloud-based contract management SaaS because they can increase the volume of contracts they create. Management solutions need to be easy to use and scale successfully.
- Global use. Sending a contract around town is a cost that companies no longer have to bear. Sending a services supplier agreement to a client on multiple sides of the world is virtually instant, as users can share and collaborate on legal documents regardless of their location.
- Limitless. Cloud-based contract management software features mean that storage issues are eliminated with single-cloud storage, not warehouse storage. Accessing contracts with cloud-based contract management software features is much easier without unearthing a physical copy from a basement filing cabinet.
Having employees adopt a contract management system and new software can always be challenging. A software solution will need to integrate with multiple standard software packages to make it more likely that contract management software features are adopted and used. This will ensure that your company gets a notable return on its investment.
Contract management software, also known as contract lifecycle management (CLM) software, provides legal, procurement, financial, sales, and contract administration teams an integrated set of tools to manage their entire contract management process more effectively. These departments benefit from these set tools by accelerating and automating their contract creation, negotiation, and approval process. Additionally, contract management software features set a secure repository where all contracts and contract-related data, information, and analytics are stored and organized for easy access, approval, and reporting. To store contracts using an implemented contract management software will aim to mitigate contract risks while increasing contract velocity and efficiency in a secure and compliant manner.
Those who deal with contracts regularly understand that the entire contract is not just an administrative part of their business, it is also a strategic one. Contracts are a critical element to ensure that any organization is minimizing legal, financial, and brand risk.
Without a contract management system, there is potential for missed renewal and expiration dates, lack of compliance and governance, broken obligations, unauthorized data, information and analytics access, unhappy customers, partners, and suppliers, and lost revenue when managed poorly.
Contract Management SaaS from Agiloft
Contract lifecycle management is software that manages all aspects of a contract or legal agreement from creation to negotiation through execution. Contract lifecycle management software from Agiloft automates workflows associated with initiating, executing, and monitoring contractual agreements. Implementing a contract management system offers your business significant savings, enabling more efficient sales cycles and lower compliance risk.
To explore how a SaaS contract management system can benefit your organization, schedule your free custom demo here or contact us at +1 650 459 5637 or firstname.lastname@example.org.