When contract management is a vital part of the business, the importance of effective practices and tools becomes further emphasized. At best, contract management streamlines the business, and at worst, it causes unnecessary risks and even business losses.
Organisations still have risky information policies in place. Document versions can be found scattered on employees’ network drives and email applications. In these situations, in addition to a security risk, contract information is siloed in an unwanted way. It cannot be fully utilized in contract management, contract lifecycle management, or other business processes throughout the organisation.
Solutions for many needs
Various electronic systems offer solutions for contract lifecycle management. Typically, they support the preparation, submission, and archiving of documents, and the collection of signatures. Some organisations use systems specializing in contract management, into which processes can be created to support the overall contract management. On the other hand, some organisations use document management systems where contract management is implemented as an additional module. Alternatively, it is also possible for different project management software to define workflow-like practices for contract management documents. Also, there are solutions available as cloud services that can be deployed quickly and easily.
Thus, there are alternatives to the solutions. Finding the right one depends on the need for use and the amount of investment in terms of money and time an organisation is ready to put into the project. However, the implementation of a technical system may require infrastructures such as servers with their maintenance costs, the creation and management of user IDs, and staff training. A turnkey solution may be expected directly from the technical partner, and there is not always enough willingness to fit the solution within the framework of the organisation’s IT conditions to get the most out of the invested solution.
Cost-effectiveness with familiar technology
Whatever the solution, cost-effectiveness is good to keep in mind. Significant investments have their place and benefits, as do light cloud solutions. Did you know that if your organisation uses Office 365, then you already have contract management tools in use?
The contract management solution built into SharePoint is easy and straightforward. The operating environment, which is already familiar to employees, consolidates contracts into one centralized place, where version control of contracts is made easier and clearer. A centralized standard document management model will significantly improve the transparency, manageability, and security of the contract process, as well as the availability and accessibility of contract information. In this case, the view of the overall situation of contracts at the organisational level improves the business in risk management minimization, financial planning, and supplier relationship management, among other things.
Most Finnish medium and large organizations use Office 365 products, which are familiar and comfortable for employees to use. When the technical implementation already exists, deploying the new solution in the same operating environment will be faster and smoother. Users do not need to be extensively trained in the use and maintenance of the new system; familiarity with the contract management process is sufficient. The time and money invested with the technical partner do not increase beyond the pain threshold.
Enhanced contract management with automation
Controlling the follow-up of contracts, such as deadlines, their renewal or termination, and the alarms associated with these dates also plays a crucial role in contract management. For example, Microsoft Power Automate can create workflows for SharePoint for various reminders of due dates and tasks and approvals, and reporting. The SharePoint-based solution can be easily extended to cover the electronic signatures using products from third parties, such as, say, an excellent DocuSign.
For our real estate client, contract management has been implemented in SharePoint using different views. The main page categories for the latest, next, and most recently expired contracts give the user an immediate idea of the status of the contracts. One view shows the overall situation without a single click. By category, vendor, responsible person, and company, filtering contract documents makes it easy to find documents and create alerts for them as effortlessly as with just a few clicks away on the user’s device.
If an organisation needs a workspace to manage contract documents, Teams provides easy-to-use tools to streamline collaboration between different departments, for example.
Take advantage of the tools with metadata
When things are kept simple, utilization and user-friendliness are also guaranteed. The principle of document management metadata processing follows the same lines and applies to contract document management even more than anywhere else: document metadata management must be as comprehensive as possible, but automatic. If an IT solution requires a lot of metadata, rules, and dependencies, the result may not be the most user-friendly. The solution will not ultimately serve its purpose as usage becomes too complicated.
Functional practices to support the technical solution
Sometimes implementation projects of contract management systems have a tool-centric mindset, and organisations do not necessarily pay enough attention to the processes that support contract management. The technical solution should support the contract management process, whereas functional and integrated operating models should efficiently use the contract management system. For example, those working on contract matters need to know what will be done to the contract after it is signed. When purchasing a contract management system, it is essential to remember to define and, if necessary, develop processes, operating models, and a metadata management model from the very beginning of the project.
Are you looking for a quick, easy, and cost-effective solution to support your organisation’s contract management process? Contact us, and we will be happy to demonstrate our solution!
Henry Scheinin Vilma Lindell
Managing Consultant Consultant