With numerous e-signature tools and contract management platforms currently on the market, it can be difficult to discern any distinguishing features between them. Yet this is a big decision for a company—handling all of their most sensitive documents that make up who they are, from the people hired to the key partnerships formed. This is why it’s paramount to assess all options. When evaluating platforms, it’s important to find a tool that works well and can accomplish goals, turning contract management into contract success.
Contract success means a holistic, all-in-one system for working with contracts from the beginning stages of drafting, through negotiation and e-signature, and onto contract follow-up, all within a single, accessible platform. Many typical contract management or e-signature tools have aspects within this lifecycle, yet having all the necessary tools in one place is essential to have visibility into every type of contract through all stages of the contract lifecycle. Ultimately the goal of a contract lifecycle management platform should be to better facilitate the creation and development of profitable and lasting contractual relationships.
To better understand what contract success really looks like, these are the key stages and features a platform should encompass, in 3 simple phases.
Phase 1: Creation
Drafting a good contract is one of the most crucial parts of the contract management lifecycle. It provides the foundation upon which the rest of the contract is built. Clarity and precision in contract drafting are critical for making sure both parties’ needs are met. Terms and conditions need to be spelled out in exact detail. Ambiguity and mistakes in contract drafting can lead to confusion or miscommunication, or at worst, disaster, non-compliance, and lawsuits.
Though this stage of the contract lifecycle is critical, it is largely neglected by the contract management software industry as a whole. With 95% of people still managing contracts manually, this means documents are created from scratch with a program like Microsoft Word and collaborated on via e-mail. This creates difficulty in version control, identifying mistakes, inconsistent wording, and lack of continuity. Offline creation or even online creation that requires a document to go through a series of tools makes it more likely documents and changes will be lost.
A true contract success platform should allow for a contract to be drafted, templatized, and stored directly within its system. This avoids the back and forth of different versions through email, followed by importing data into another program for managing the contract long term. Creating templates substantially reduces errors and the time needed for drafting the contract.
Phase 2: Pre-Signature
The negotiation process typically involves several iterations of the contract as both parties make compromises based on possible risks, projected revenue, and many other factors. This can be a very simple stage requiring only a few edits, or it can be a drawn-out endeavor that takes weeks. The length required can be heavily based on what tool is used to handle the negotiations. Many organizations rely solely on track changes, email, and documents saved on their desktops. Email can take weeks, and with numerous stakeholders, messages often get lost or disregarded. Aside from that, with multiple people sending the contract back and forth, version control can become impossible. Not having a tool to facilitate contract negotiation further enlarges problems of errors, security, and lengthy timeliness in moving the contract through its lifecycle.
A successful contract lifecycle platform has negotiating tools, notes, audit trails, email notifications, messaging features, and more. Having these all built into a single platform makes contract negotiation straightforward, quick, and accurate. Every time an edit is made to a document, a new version is saved and displayed in chronological order in a panel next to the document being worked on. This cannot be tampered with after the fact to ensure legal compliance and makes all changes made throughout negotiations clear for all parties involved.
In today’s digital world, e-signatures have long been accepted as an authoritative tool with the same legal weight as a normal signature. They have the additional benefit of being a huge time-saving tool, allowing individuals to sign a document at any time of day and from virtually any location.
When it comes to contract management, e-signature tools are sometimes integrated into the software, but many stand alone or have integrations. To e-sign a contract that is managed with many contract management tools, contracts need to be moved in and out of different platforms. This may entail drafting a contract in Word, then moving it into an e-signature platform for signing, and then finally into the contract management software for follow up. This tedious process creates the unnecessary need to pay for and use two separate programs that should be united into one. A good contract lifecycle management platform should ensure a contract never has to be moved between programs again.
Phase 3: Lifecycle
Contract management has traditionally been designed around maintaining compliance. It entails the proper execution and storage of contracts in such a way as to protect from risk and breaches in compliance. Over time as companies realized they needed a way to track, report, and follow up on deadlines, contract management software has become much more accessible. Now, a successful platform should provide a way to increase efficiency and revenue, while empowering people all across the business to be able to manage their own contracts with full compliance.
Deadline alerts will increase the visibility into expiring or renewing contracts, and all past changes can be seen in an audit trail. Both these tools increase compliance and allow all teams, not just Legal, to maintain control of their own documents and follow up where appropriate.
By automating the long or difficult parts of the contract process, a platform allows companies to focus on what is truly important: growing revenue and increasing the speed at which they are able to sign and close deals, while maintaining full compliance. With an all-in-one, holistic solution, contract management can truly transform into contract success.