5 Signs You Need a Contract Management System
While we’ve touched on what kind of benefits an organization can get out of contract management software in previous posts, but another thing many companies may not know is how to figure out if they actually need contract management.
We talked to two contract management software vendors from opposite ends of the industry to get their perspectives on the industry and tips on how to recognize the signs that your company needs a contract management system.
Ariba, a subsidiary of SAP ever since its acquisition in 2012, ties contract management up into a larger set of solutions designed to facilitate what Sundar Kamakshisundaram, Ariba’s director of solutions marketing, describes as “collaborative commerce,” a new dynamic in which enterprises leverage new technologies typically associated with consumer-level usage like cloud computing, social media and mobility apps. Said technologies are leveraged as a means of managing their overall business processes.
“Companies communicate and collaborative via mobile devices,” Kamakshisundaram said. “They leverage cloud-based apps like Salesforce.com to manage their customer relationships. They tap LinkedIn to find talent. Why? Because they realize they can no longer be competitive on their own. They can’t achieve all of their costs, revenue and cash flow goals without being able to efficiently engage and collaborate with their entire universe of trading partners. And this is particularly true when it comes to negotiating and managing contracts.”
Contract management fits into that equation as the “glue” that binds together the disparate means companies use to unify strategic-level functions like sourcing, procurement and managing capital across the entire breadth of the organization.
Ariba separates the contract management segment into two distinct areas, according to Kamakshisundaram:
- Contract Management: Contract requests, authoring, workflows for addressing contracting process, electronic signatures and negotiations and approvals.
- Commitment Management: Management of all compliance and performance management issues by way of task reminders, search functions and reports in addition to contract renewal reminders.
Ariba’s 5 Signs
- Lack of visibility on contract details
- Challenges with price compliance
- Missing contract expiration deadlines
- Extended delays or downtime in getting a contract signed
- Compliance challenges that result in additional risks up and down the supply chain
The Blueridge approach to contract management software seeks to provide a feature-rich, easy-to-use interface tied to an affordable price point. The company emphasizes flexibility–in the kinds of features offered to differently sized organizations (its product, Contract Assistant, sports three versions based on business size) as well as the kinds of use cases for its core features.
According to Bruce Tucker of Blueridge, Contract Assistant has customers whose use cases apply to virtually every kind of negotiated agreement in various industries including credit unions, government bureaus, health care, pharmaceuticals and education.
In regards to what constitutes a successful contract management system, Tucker said, “in some ways, it’s business 101. A company has to define its target market, identify the needs of that market and provide a product that meets those needs and is priced appropriately. The software itself has to offer an interface that a normal human being who is not highly technical can use, understand and like, while still being powerful enough to do the job. In designing contract management software, it’s important to find the right balance of capability and complexity. In terms of what it takes for a company in our industry to be successful, it starts with dependability, responsiveness and excellent customer service. They’re the basics, but they’re crucial.”
Tucker added that contract management is becoming a higher priority for many organizations. This partially to do with a greater amount of regulatory oversight in several industries, but also because of a general increase in the importance of contractual agreements in almost every type of business.
Blueridge’s 5 Signs
- No master list of major agreements
- Lost contracts–or the inability to find or identify the final approved version of a business agreement.
- Receiving an unexpected bill because of a forgotten auto-renewal clause
- Excess expenses owing to duplication and/or overlap of contractual services
- Missing critical contract milestones
Hopefully with these observations an organization can start to have a better sense of whether its internal frictions are indicative of a need for this kind of software. Have you deployed a contract management system at your business or are you in the market for one? Let us know about your experience in the comments section below.
Want more on Contract Management Software? Browse additional articles and reviews on best contract creation tools and contract management software with our CLM resource page. Also check out our free Top 10 Contract Management report which compares pricing, features and more to select the best CLM solution for your business.