Contract Management: How to Improve Your Processes
Contract management is an essential part of most businesses, responsible for helping companies draft arrangements, form partnerships, and more. However, you could lose money without the right tools and processes in your contract management strategy or, worse, face legal trouble. So how do you improve your approach to contract management?
Decide On Your Goals
Before you do anything else, you need to decide your goals. What are you trying to improve when you improve your contract management? Here are a few examples.
Do you need to upgrade the security of your contract software? Likewise, do you feel confident that you can exchange information on your current platforms securely and privately? Look at your security similar to how the military looks at military DEFCON levels. Have a scale of 1 to 5 and depending on the importance of contract, complexity, and needed security you can give it a rating that certain actions are required. This can help prioritize important contracts, but also make sure that there’s a high level of security on ones that require it.
Are you more interested in saving time? If your employees are wasting time on inefficient contract management processes, they may not be able to lend their full attention to other, more pressing projects. As a result, streamlining your contract management could give your entire team more time to focus on new developments and higher responsibilities.
Some businesses are most interested in cutting costs. More competent contract management could save you money in a variety of ways. Likewise, it could lead to fewer legal disputes in the long term and improve productivity and efficiency in the short term. If this is the case, you’ll need to watch your budget carefully as you execute new contract management strategies.
Storage and Accessibility
How easily can you store and access previous contracts? Similarly, can you easily search for what you’re looking for?
From a customer’s perspective, what is it like to interact with your contracts? Is it relatively easy to review paperwork, sign contracts, and check your signatures? Consequently, the more streamlined this process is for customers, the better it is for your business.
You may also be interested in process consistency. As a result, you hope that your customers get the same experience. Likewise, you want to ensure that your company is always adhering to rules and regulations.
Which of these areas are you interested in improving? Which of them are your highest priorities? Once you have a better understanding of your goals, you’ll have a much more solid direction for how to reshape your contract management approach. As a result, this framework can also help you make better decisions and provide you with a way to measure whether you were successful objectively.
Audit Your Current Process
How are you currently approaching contracts? The first and most important step you’ll have to take after outlining your goals is auditing your current process:
- What is your current approach to contract management, and what don’t you like about it?
- What types of software are you currently using?
- How many people on your team are involved in contract management?
- How much are you spending?
- What are the documented workflows for contract creation?
- How do you share and collaborate on contracts?
- What are the most significant pain points for your employees?
There’s a lot of information to consider here, so document your findings thoroughly.
Start With the Right Software
The improvement process starts with the right contract creation software. Your contract management platform will be at the center of all your contract management activities, so it needs to serve your business well. If your contract management software isn’t up to the task, your only real option is to upgrade to a better product. Pay attention to the following:
Contract Creation Tools
What features and tools are available to assist in contract creation? Is it easy for a newcomer to create and review a contract? Can you create templates to use for future contracts? Is it easy to find and call up those contract templates?
Storage and Organization
How easy is it for people to store and organize different contracts? Is there a system of organization and a navigation system that both make sense? Can you set up an internal system of organization that all your employees will be responsible for following?
Overall User Interface
Overall, what is the user interface like? What kind of experience do users have when they try to take advantage of this software? For example, if a person has never seen or used this software before, would they be able to use it effectively after only one or two training sessions? Would they consistently enjoy their experience, or would they become frustrated with repeatedly encountered obstacles?
How much security does this platform offer? Are you worried that your documents could be leaked or stolen?
Sharing and Collaborating
Which tools are available for sharing and collaboration? For example, if you’re writing a contract with another party, is it easy to send changes back and forth and conduct mutual reviews? When it comes time to collect signatures, is it easy for all parties to participate?
You’ll also need to think about the price. A contract management platform may offer all the bells and whistles you need and more, but if you’re paying too much for it, the costs may outweigh the benefits. There are many types of contract management software available, so make sure to shop around for the best fit for your business.
Rely On Templates — But Not Too Much
When improving your contract management approach, consider increasing your reliance on templates. Templates are relatively easy to create and easy to follow, even if you don’t have much experience in contract creation yourself. Once created, they can significantly improve consistency and improve productivity on your team. Just don’t become so reliant on templates that you lock yourself into a losing strategy.
Educate and Train Your Staff
Educated, trained staff will always be more productive and more consistent. That’s why it’s so important to educate and train your staff on your new contract management approach.
1. Provide training in multiple environments.
Consider experimenting with different educational environments. For example, work with employees one on one, teach them as a group, and let them learn independently.
2. Document and provide resources.
Always provide documentation to your employees. This way, if they forget a lesson or need a refresher in the future, they can refer to the documentation you provided them.
3. Get feedback.
Ask your employees if they feel sufficiently educated and trained in contract management. You can revisit your employee education/training program if they don’t.
Automate What You Can
Take advantage of automation. Most modern contract management platforms offer many automation features, from automated reminders to automated contract generation. Automation saves time and improves consistency, so make use of it where you can.
Work with a Consultant
If you’re struggling to improve your contract management system, you could consider working with an outside professional. A contract management consultant will be able to review your current systems and approaches and provide you with direction on how you can further improve them. They may also be able to connect you to the resources you need to be successful.
Employ a System of Continuous Review
Finally, employ a system of continuous review. Contract management improvements shouldn’t be a one-time effort; instead, you should constantly be working to improve your contract management. Here are some ways you can do it:
1. Set a time frame for auditing and reviewing.
Establish a time frame for your business to review its contract management systems. For example, do you want to audit your management approach on a quarterly basis? What about annually? Stick to regular time intervals if you want to be effective.
2. Designate a point person.
Choose one person to be in charge of contract management review. This way, you’ll have someone accountable for organizing reviews and improvements.
3. Collect feedback.
Always get feedback from employees and customers to learn more about your system’s current weak points.
With better contract management habits in place, your business will save time save, money, and improve consistency. Similarly, the sooner you address the inefficiencies and hiccups in your current processes, the faster you can see these improvements.
Image Credit: Andrea Piacquadio; Pexels; Thank you!
Contract Management: How to Improve Your Processes was originally published on ReadWrite on May 20, 2022 by Deanna Ritchie.