Four Business Solutions CEO John O’Brien mulls over the issues that matter.
I often come across people who are thinking about investing in Contract Management Software (CMS), but get put off by what I can only describe as misleading myths.
It’s a shame, because when you get it right, CMS makes the whole contract management lifecycle more sophisticated. It will boost security, protect you from frivolous litigation and generate a true return on investment. And who wouldn’t want that suite of excellent benefits?
Myth 1: “My contracts and documents won’t be secure. They could be accessed by inappropriate people.”
It goes without saying that security is a priority when it comes to contract management. Whatever system you’ve got, it must safeguard appropriate levels of access, confidentiality, integrity and availability of data.
Take the software we recommend, which is called Contract Insight. It provides security at individual document level, with access control allowed by person, group, location, business unit or companywide.
Hosting the software can sometimes raise security flags, but that’s easily handled with some on-site help from our team, or by allowing Four Business Solutions to manage the solution via our cloud deployment.
Either way, the result is an extremely high level of security, suitable for most organisations. Our cloud solution fully complies with ISO 27001 certification (Information Security Management Standard), and we keep our standards bang up to date, every year.
MYTH 2: “Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) solutions provide all the contract management capabilities a firm needs.”
This myth is like saying Word or Excel are all a person needs to work in an office. Most emerging businesses need to deal with all sorts of nuances in their contracts, and they want something more capable than a digital (or even a real) filing cabinet. For that, you need purpose-designed CMS.
One example of the potential benefits – Contract Insight software keeps a check on the legal robustness of every contract a company signs. This requires clever workflow to streamline the whole process, from before a supplier is selected through contract award, negotiation and renewal. Contract Insight also handles ancillary activities, so the organisation is not legally exposed. Plus, the supplier (employee or client) is monitored to make sure they provide the service promised, in line with expectations, the contract and any regulations.
A full contract management system can also create a list of actions due, such as warranties, renewals and services, for an added confidence. Other systems like CRM and ERP will only allow simple tasks to be completed, such as make payments and store an electronic copy of the document.
MYTH 3: “Contract management only impacts a few people within the organisation.”
It’s true that some contracts only affect a few people. However, if we think about the modern age and the complexities of stakeholder interests, a business could still be left exposed.
For example, a contract with an employee for a company car will have knock-on liabilities, and companies need to protect themselves from frivolous mitigation. Contract Insight Software can ensure internal motor policies are shared with employees. All staff who drive can be asked to sign the company motor policy. And through an electronic audit trail, managers can ensure they’ve read the policy and agreed to it with an e-signature. This type of contract extends company-wide, but also externally to legal firms and car vendors.
So, if an employee is involved in a serious car accident whilst on company business, this linking of consequential loss could prevent the company’s directors being sued and held accountable for a driving accident in court.
MYTH 4: “I’m going to invest more time and money setting this up without a return on my investment (ROI) for me and my business.”
What is ROI? It can be time or money, but both can be inaccurate. Or, in my view, the third kind of ROI is a situation where something goes wrong and you avoid costly litigation. The complexities of employing people, dealing with suppliers and meeting consumer demands leave every business open to contractual disputes.
In terms of setting up, an initial ‘cost’ is inevitable to implement smart IT systems, but for Contract Insight Software and our clients the value is really there before you’ve even invested.
Let me explain how. Four Business Solutions provides a pilot environment for clients before they commit to the software and implements a customised, easy-to-manage system from inception to ‘Go-Live.’
A typical deployment for a small business is approximately 5-6 days, or, for a SME business, 10-15 days which includes training and data migrations. And Contract Insight has a concurrent licensing structure for the software, which is the most economical and efficient way to invest.
In summary, we prove that our solutions work before a client invests, and then offer an efficient licencing model so they get the most from their investment. Finally, the solution is delivered quickly and efficiently, to keep total costs very low.
John O’Brien is the CEO at Four Business Solutions, global business consultants and software integrators providing business processes improvements in Finance, Supply Chain & Operations, across a broad range of industries.