The 8 Steps of Contract Creation
Based on the integral role that contracts play in defining business relationships, as well as establishing roles, responsibilities, and expectations between entities, it is essential that these legally binding documents are managed in a highly effective and accurate manner. While it is considered a part of the professional responsibility to ensure that business documents are accurate and absent of error, when it comes to legal documents, such as contracts, the need to be able to produce an error-free, accurate document is paramount to creating a lucid and binding agreement.
As the global economy moves into full swing, many companies are finding it to be a difficult task to effectively manage the rapid evolution of contract management, including the failure of an audit, missed contract deadlines and problems associated with version control. Contract lifecycle management has become a business priority that requires a systematic approach that is up to the task. The benefits of using a comprehensive contract management system are multitudinous, including, an increased financial value, controlled risk, improved revenue generation, reduced expenses and more.
The following report will reveal some key components that identify the importance of having the capacity to properly manage the lifecycle of every contract created for your business, as well as show why using a comprehensive contract management system, will consistently produce the efficacious results that you are looking for.
1. Content Capture
In order for any contract management system to be accurate and effective in the process of contract management, it must have the capacity to capture content through a multitude of media and content procurement channels. The system must be able to accommodate numerous types of existing documents, including emails, faxes, video, audio, paper and more. Additionally, the system should also have the capacity to handle high-volume processing, such as batching.
When converting general existing content into a digital format, there are several primary ways that this can be done.
- When it comes to image integration, the use of conversion software is the most effective method. A good contract management system will possess the ability to convert images into unalterable electronic documents.
- Integrating common paper files is generally accomplished through the simple process of scanning the documents into a specific file.
- When content is contained within specific types of content formatting and management systems, such as Microsoft Word, Excel or PowerPoint, the content can be imported directly into a mirror format through which it can be deciphered and properly distributed and stored. An effective contract management system will be able to easily capture existing content and organize it in a manner that will facilitate the efficient, effective and accurate management of the complete lifecycle of the contract.
2. Digital Content Transformation
From a traditional sense, a great deal of the focus of electronic document solutions was placed on the front office, and given challenges associated with extremely paper-intensive, clunky solutions, while back-end issues were given a less emphasized priority. However, the digital transformation process has created a substantial amount of pressure on the entire organization to improve all aspects of the contract management process.
The pressure to be more efficient has forced departments to introduce process automation as a part of the transformation and contract management process. For instance, one solution that aids in the process of content transformation is the use of an automatic content creation procedure in which contracts are propagated as they are drafted from an existing clause library. While documents can be authored by using compound documents, it has been determined that the use of a clause library produces documents that can be easily understood by the end user. This is important because while accuracy and the addressing of all possible contingencies are important, it will be of little use if the end-product is not understood by the person or persons who read it.
The evolution of the contract management system has introduced an ease of access to content and information that can produce documents that are easily understood by the business users that will review and sign them.
The right contract lifecycle management system will also provide the capacity to properly govern and protect sensitive information while remaining in compliance with all legal and ethical requirements.
3. Content Creation
A highly functional contract management system is an immensely valuable asset for a company when it comes to establishing the capacity to effectively create the content necessary to propagate a contract that will be lucid, direct and comprehensive, all at the same time. Many businesses operate under highly stringent laws and regulations that they remain compliant with immensely specific guidelines of operation, meaning that contract has to express and reflect these standards in a manner that ensures that the standard of performance is always met. Using a contract management system will help to ensure that the specifics of any regulations and ethical demands are met with each and every contract that is drafted.
Additionally, content creation can also be a problem when it comes to volume, value, and risk. Many companies draft a large number of contracts, on an ongoing basis, These high-volume documents will also impact the value and risk involved in business relationships and the overall performance of all parties involved. Using a contract management system will allow these companies to better manage the contacts throughout the entire negotiated period while assisting the company by providing it with easier and broader access to the necessary information.
4. The Content Review & Editing Processes
A considerable portion of the rapidly rising costs associated with effectively managing business contracts can be directly linked to the content review and editing process. This is a process that used to take days and use an exorbitant amount of manpower. Depending on the size of a particular contract, and the level of priority given to it, there can easily be 5 or more people assigned the tedious responsibility of reviewing the contract for errors and oversights. This also includes the editing process, which involves any correction or additions to the contract. With a contract management system, this process can literally be reduced to a matter of hours, and it will generally be managed by a single individual.
There is literally no limitations to the parameters, keywords and contingencies that can be entered into the system. The contract management system can monitor everything from spelling and grammar to standards, demands, and expectations associated with a particular type of contract. The system can also be prompted to identify specific errors or lapses not associated with a particular contract. The margin for error is reduced dramatically with a contract management system.
As with any business, time equals money, and when a business has the opportunity to reduce an operational process by days, it will equate to an efficiency value that improves the company’s bottom line.
Another thing to consider when evaluating the impressive contribution that contract management systems add to the contract review and contract editing process is the fact that many times businesses partnerships, and the specific needs and demands their service, can be immensely time-sensitive. The delay that has historically been created through the manual review and editing process could be the difference in getting the deal done and facing the reality that a client of business partner has moved on to someone else.
The specificity associated with the review and editing capabilities of a contract managing system also guards against the development of any compliance issues, which will also save the company money in potential fees and fines associated with non-compliance.
With a highly simplified approach to contract and clause management, contract management systems are proving to be the most effective and profitable method for responding to rapidly increasing demand for the timely creation of contracts that are accurate and easy to understand.
5. Content Linking
While the functionality of content linking is rather straight forward, it can become a significantly convoluted process, especially with highly complex documents. The idea of content linking is to improve the navigation experience for the end user. As the use of digital documents has skyrocketed, the benefit of having access to many of the inherent benefits of using digital tools has become increasingly evident. One such benefit is to create hyperlinks with the document that allows the reader to move effortlessly throughout the document. Because contacts may not always flow in a linear order, at least as far as the reader is concerned, allowing the reader to simply click a link to arrive at another portion of the document that may have relevance to what is being currently read is a remarkably powerful asset.
In additional to internal linking, contract management systems also offer the option to link to information that is outside of the document, including existing documents. The website, and other forms of digital information that may make it easier to understand the document as a whole. Businesses often link to such information as associated warranties, support center information, step by step explanations of specific points that are addressed in the primary contract.
While it might seem expedient to simply include all of the pertinent information associated with any business agreement within the contract itself, the extraneous content can prove to be so exorbitant in volume that it con volutes the intent and focus of the contract. This does not mean that the extraneous information does not have significance, just that it better received as an outside source.
The value that linking adds to any business contract cannot be overstated. Depending on the device being used to read the document, having strategic links throughout the contract can simplify the task of navigating through the contract with ease and purpose. The contract management system can even help identify the most effective linking strategy. When it comes to process automation, the use of a contract management system provides the capacity to be very precise in what is created and how it is presented. The internal and external linking mechanisms that are available with a contract management system provide value to the process and functionality of the end product — a winning combination.
6. Content Versioning
Because of the complex nature of drafting contracts, along with the ever-evolving need to provide unique and highly specific content to contracts, the ability to use a content versioning model is huge. In simple, content versioning allows a business to track all changes that are made to a contract over time, creating versions that vary along the line of those changes.
Some of the changes that can be tracked and modified include:
- Page changes
- Data item alterations
- Changes to media files
- The capacity to compare existing versions
- Merging and integration of existing versions
- To restore items that have been previously deleted (partially or in-full)
- Roll back to a previous version
The contract management system will have a content management log that will keep track of changes made to the content associated with a particular contract. With a simple click of the mouse, businesses can access any particular version of a contract they desire, from which they can manage the data and content with the contract — adding, changing or deleting text, images or media.
You can also pull a versioning report, and gain access to a full versioning history of the document, which will highlight all of the changes made to the document — simplifying any restoration or integration efforts.
7. Content Translation
No matter what part of the business process and relationship a company may be focused on, communication remains key. On the front end of the communication is an effective expression, and on the back end of the communication is effective interpretation. What brings all of this together is the capacity to effectively translate content so that it can be understood by the reader. The expanse of content translation can be very broad. In a very subtle way, the content translation tool available with contract management systems can be used to translate simple problematic phrases that might make it difficult for a party to read and comprehend. This is good for simplifying highly technical terminology that may be necessary to solidify a point, but proving problematic in creating lucidity throughout the contract. The use of content translation can simplify and elucidate these terms for easier understanding.
In a more conspicuous manner of translation, the contract management system can help businesses bridge the language gap that has become more of a dynamic issue within the new global economy. The contract management system has the capacity to completely translate documents into other languages, which is essential to services international business relationships. Whether a business is creating a contract for one of its international clients, or it is reviewing a contract created by one of its international clients, it will be able to translate the contract into a language that will ensure that the terms of the agreement set forth in the contract are lucidly understood.
8. Content Formatting
For individuals and companies that are not familiar with formatting when it comes to creating digital content, the formatting process can be a frustrating endeavor; however, the capacity to be almost infinitely creative in formatting process allows for the ability to create contracts that are easy to navigate and read, while providing a unique opportunity to intensify brand awareness. While a certain amount of uniformity is expected when drafting contracts, there is always a certain amount of latitude afforded when dealing with digital documentation.
While uniformity is important, there are a number of different formatting styles that are currently considered acceptable for legal contracts. The contract management system will allow the user to choose which format will best serve the purpose of the contract draft that is currently on deck.
One of the most useful tools available, as far as formatting is concerned, is the ability to create and save templates that can simply be filled in and edited. As with all other types of business documents, the type of contract that is being drafted will heavily impact the type of formatting that will be required. Using templates that are present will reduce the time required to create the right formatting.
When not handled correctly, digital formatting can become a significant headache when attempting to draft a contract; however, a highly functional contract management system can simply the process — saving time and money.
Contract management is an integral part of managing and sustaining healthy business relationships that perform well as far as achieving the desired expectations. In a business world that evolved into an open international market, the need to generate business contracts in reasonably fast times has created a need for an automated process that can reduce mistakes, increase efficiency and optimize accuracy. The advanced technology used in quality contract management systems ensure that businesses can keep up with this rising demand.
Contact management systems provide easy and immediate access to contract agreements that have already been signed while providing the capacity to identify keep elements within the contract that may be of immediate importance to a standard issue. Therefore, content management systems provide the ability to effectively manage contracts throughout their entire lifecycle, which is essential for sustaining value, compliance, and performance.
Additionally, contract management systems allow businesses to keep up with important dates, such as certification dates, dates for performance reviews and contact end-dates — minimizing the risk of something falling through the cracks.
This type of system also increasing the capacity to effectively communicate the terms within the contract in a manner that they are easily understood. Without effective communication, a contract becomes useless.
Yes, the global business world has produced a need for the more effective management of contract documents on a grand scale, but contract management systems are more than up to the task.
Originally published on CoContract