As technology evolves and enterprises work to adapt, business process changes should increase your productivity rather than hamper it.  Contract managers who primarily use manual methods may encounter difficulties in efficiently managing contracts.  Contract mismanagement can decrease productivity, hinder communication regarding task responsibility, and increase avoidable inefficiencies.  As contract administration changes for the future, you can attain greater control over your contract management processes by avoiding the following pitfalls associated with contract mismanagement.

Pitfall one – disorganised contract storage

Relying on a manual system for storing contracts – which may include filing cabinets and disorganised digital processes – proves difficult in keeping contracts secure, organised and accessible.  Manual contract storage systems can make it nearly impossible to maintain version control, track key dates and milestones, and enforce contract security preferences.  Storing contracts without a secure contract repository can increase contract risk, weaken contract performance and reduce overall control.  Additionally, retrieving documents in a manual system can be a time-consuming challenge without the help of a quick search tool.

Pitfall two – inefficient contract workflow

Unlike contract management processes – which use advanced contract management artificial intelligence (AI) – manual, low-cost contract management processes require contract managers to superintend each stage of the contract lifecycle.  Discrepancies along the way – that could have been avoided with the help of technology – delay contract lifecycle processes until they can be resolved.  Leading contract lifecycle management software can reduce contract management costs, increase productivity, and help contract managers mitigate risk. 

Intelligent, automated contract workflow can transform contract management with user-defined fields, reporting and analytics tools, audit trails and process management etc.  Trading inefficient contracting processes for intelligent contract workflow enables contract managers to remain abreast of their contract lifecycles with key date and milestone notifications, audit trail history, contract tracking and improved negotiations.

Pitfall three – lack of approved contract and clause templates

Unlike the use of user-friendly contract management software with pre-approved standard contract templates for contract writing, reliance on manual contract writing processes requires contract managers to create new contracts from scratch.  This laborious process includes downloading various templates, manually inputting a plethora of data, and finding relevant information.  When templates are not stored in a dynamic clause library, drafting new contracts and renewing contracts can prove difficult for contract managers.  This form of drafting can lead to compliance issues because clauses, templates, and approved language are obsolete or incongruous with contractual standards.

Pitfall four – manually tracking contracts

Contract tracking methods may vary, based on contract volume and complexity.  While manually tracking contracts may temporarily prove adequate for a smaller organisation, this method becomes ineffectual as the organisation grows.  Manual contract tracking can hinder your financial goals, weaken contract security and increase contract risk.  If your systems relying upon MS Word documents and spreadsheets, this can impede efficient contract lifecycle management because these programmes are not designed for contract management.  Spreadsheets and documents lack the intelligence provided by AI-based contract management that can alert contract administrators of risk variables, vague contractual or ‘fuzzy’ language, upcoming contract renewals and increased opportunities. Without automated tracking tools, managing contracts can be unnecessarily cumbersome and stressful.

Pitfall five – wet signatures

Manually signing contracts can delay processes, as contract managers must wait on the cooperation of involved stakeholders.  Attaining wet signatures drastically slows contract managers and other parties who need hundreds or thousands of contracts to be signed by various people in various locations.  This paper-based system wastes office supplies, postage, energy, time and money.  Meanwhile, electronic signatures and digital signatures can allow contracts to be sent and signed in virtually minutes. E-signatures can also empower contract managers and their teams to work better remotely, to obtain necessary signatures by signing from practically any device with an internet connection.

Pitfall six – remote work challenges

Overall, these contract management pitfalls can create a recipe for extreme difficulty when working remotely.  Contract managers attempting to manually store, draft, track and sign contracts while relaying all the information to their teams working outside of an office can be tremendously stressful.  While it may be possible to work remotely with manual processes, a contract management software solution with full contract lifecycle management offers a more viable alternative in the long run.  User-friendly contract management software can make your contract managers’ work-life much more productive by providing a reliable system that can make pre-award to post-award contract management a breeze through improved collaboration, negotiations, approvals and contract automation. 

Avoid these pitfalls with leading contract management software

Now that you know how to steer clear of contract mismanagement pitfalls – rather than inadvertently mismanaging contracts – it’s time to switch to contract management software. 

Contract Insight from Four

Contract Insight is a cloud-hosted (SaaS) or deployed (on-premise) contract management solution.  The acclaimed platform is trusted by thousands of professionals for their contract management, legal document managementprocurement and sourcing needs.  Used by many Fortune 500 companies, Contract Insight gives you real time visibility into your contracts. It doesn’t just shore up your security; it will help you meet contract compliance regulations, centralise your contract management and improve your overall contract administration process.

For more information, contact John O’Brien, CEO at Four Business Solutions, global business consultants and software integrators providing business processes improvements in FinanceSupply Chain and Operations, across a broad range of industries.