Managing contracts can come with a variety of challenges. The good news is, many of these are avoidable with the right processes and technology. Here is part 2 of the top 10 pitfalls of contract management.
6. Lack of Flexibility
In contract management, the lack of flexibility and efficient mechanisms for performance management can be a major roadblock. Rather than deal proactively with alterations to a contract, the parties involved often wait until something goes wrong. Shifting to digital contract management provides an open, transparent, and easy-to-use platform which helps facilitate a way to avoid this lack of flexibility and communication. The ability to adjust and adapt to any situation, time, or mode of communication is much simpler when all parts of the process are managed in the Cloud.
Another common issue with contracts is the misunderstanding of elements within the documents themselves. Contracts typically start with the legal team drafting them, which means that once handed off, they can be difficult for anyone without that legal knowledge to understand. With a platform, documents can be easily and compliantly created through the use of templates, and drafting, editing, and changes to a contract are much easier for the legal team to manage. Additionally, other teams are able to have quicker and easier access to the legal team’s knowledge through the instantaneous nature of the platform. By working so closely with the contracts, each party can execute a drafting style and structure that makes sense to them, ensuring a proper understanding of the agreements each party is entering into before the documents are signed.
8. Handoff Gaps
Once a contract is signed, the handoff from the team who manages the deal to the implementation team can be difficult and full of communication gaps. The party that receives the contract often has no association with it prior to its application, which can lead to a poor experience for the third party and confusion within an organization. The transparency provided by a digital contract management platform enhances the ease with which information can be shared, allowing for an easy way to keep the implementation team involved from the beginning. This helps to guarantee the commitments and obligations being made are understood prior to implementation.
9. Limited Technology Resources
In the past, a major hurdle for contract management has been the limited use of technology, resulting in the loss of efficiency and quality in both performance and analysis. Using a contract lifecycle management platform completely eliminates this inefficiency by connecting all people, processes, and documents in a single location. From the rise of e-signature tools to the current full lifecycle platforms that are available, managing contracts in a connected way that matches the pace of the rest of the business is much easier.
10. Poor Governance and Post-Award Process
Finally, another issue with many current contract management processes is poor governance and post-award processes. Often there are inadequate resources within an organization to properly maintain and follow up on specific terms and requirements of a contract. To ensure that agreements are met and both parties collaborate effectively, implementing technology to help manage the terms throughout the entire lifecycle will help each party involved to be fully connected and receive updates on the status, deadlines, and renewals for a contract.
Using a contract lifecycle management platforms eliminates these pitfalls as it offers a single place in which one can draft, negotiate, sign and execute their contracts. Contract technology should be simple to use, promoting effective communication by all parties involved and inhibiting chance for risk or error.
Miss part 1? Read the first part of this series here.