In the near future, contracts will negotiate themselves
Clutch Group VPs J.B. Costilow and Varun Mehta recently wrote an article for Inside Counsel where they discuss steps businesses can take when managing their contracts. Check out the full text, or follow this link to the article.
Following only a few simple steps can help to ensure that you are protecting business interests without reinventing the wheel
Contracts get a bad rap. They can be a pain to negotiate. They represent a formality marked by bureaucracy and inefficiency. Their creation is complicated by miscommunication. And, when the redlining is over and the signatures are finally etched at the bottom of the page, into the depths of a filing cabinet they go.
This cannot stand. There has been some great progress in the contract management space — automation and online contract negotiation have certainly made things easier. But there’s still so much more that can be done.
With the amount of data residing in contracts growing at an exponential rate, we need to find ways to not only streamline the contract management lifecycle but also to fully harness the information residing in our contract data. Contracts aren’t just legal artifacts — they build real business relationships and need to be treated as the cornerstone of a robust risk mitigation program. Following only a few simple steps can help to ensure that you are protecting business interests without reinventing the wheel while also simplifying negotiations and allowing your contracts to work for you.
Find the right contract management tool
There’s a new generation of contract management platforms out there that can help manage the full contract and agreement lifecycle, and when it comes to choosing the appropriate platform for your business, it’s important to understand the functionalities behind each one.
Is your platform flexible enough to allow you to capture any necessary content, rather than specific metadata fields that are incapable of being edited? It should be. Equally important, a proper contract management platform should give you direct insight into your work product and workflow so that you can understand at all times where contracts currently sit in the overall process. Having trouble figuring out when you need to revisit contracts? Setting up automatic notifications, which can notify you when contracts are reaching certain thresholds (such expiry dates, renewal, or milestones), can be enormously useful.
As important as robust functionality and feature sets are to the selection of an ideal contract management system, don’t be mistaken. An understanding of the system itself, your businesses growth strategy, short-term and long-term business needs, and a plan for a cost effective integration are far more critical. No system is going to work properly unless it is paired with educated users. Almost all systems fail not because of the technology itself, but because the users aren’t properly educated on how to leverage the functionality of the system.
Get a bit more proactive
It’s not just about adopting smart tools. It’s about using them in a smart, efficient and proactive way. However you choose to position your CRM platform within your business, it’s important to develop a program that does not depend on retroactively managing risk.
Consider rating past contracts and clauses, for example, so that you can compare them with current or future contracts. For instance, although a vendor may always insert a certain clause into a contract, you do a little digging and realize you’ve never once agreed to it. Now you can leverage your CRM platform by looking at that specific clause from past contracts, see that it has always been rejected and redline it for the future.