Studies show that improving how you handle contracts can increase your company’s profits by nearly 10% each year. Handling contracts can hurt a company’s profits, relationships, and reputation when done poorly. Contract management software can help make the process smoother and more efficient, which is why many businesses use these advanced tools. However, many of these software installations don’t deliver the promised benefits.
This failure isn’t because the software is not robust enough. Though some programs are better, setting up the software is the main issue. In this article, we’ll look at some crucial tips for your business to set up and integrate contract management software successfully.
Integrate Contract Management Software: 9 Important Tips
Understand Your Needs and Set Clear Objectives
Before adding any new software, it’s important to understand your needs clearly. Begin by identifying the main problems in your company’s contracting processes. Common issues include:
- Difficult contract retrieval: Trouble quickly accessing contract details can slow decision-making and responses to others involved.
- Slow manual workflow management: Processes relying heavily on manual tasks are often slow and error-prone.
- Limited teamwork in contract negotiation and creation: Poor collaboration can slow negotiations and result in less favorable terms.
- Delays in the sales cycle: Inefficient contract processes can lengthen the sales cycle, impacting business growth and revenue.
- Noncompliance risks: Poor contract management can lead to legal and regulatory penalties.
- Key employees lacking contract visibility: If key people lack insight into contract details, this can impact compliance and strategic decisions.
- Slow and untrackable collaboration process: It’s hard to keep track of changes and updates without a streamlined collaboration process.
- Errors or inconsistent contract language: Mistakes in contract language can cause disputes and legal issues.
- Inefficient procurement contracting: Poorly managed procurement contracts can lead to cost overruns and missed savings opportunities.
- Poor contract version control: Managing multiple contract versions without clear control can cause confusion and the use of outdated agreements.
- Data security: Contracts often contain sensitive information that must be securely managed to prevent breaches and unauthorized access.
- Lack of visibility into contract performance: Without clear insights, assessing the effectiveness and impact of contracts on the business is difficult.
After identifying these problems, prioritize them. Consider which issues most affect your organization. When you start using the new software, focus first on features and processes that tackle these key problems. Also, set clear goals for what you want the software to achieve, like reducing contract approval times, improving document management, or enhancing audit capabilities.
Review Your Current Contract Management Processes
For contract management software to work well, it must fit with your existing business operations. Reviewing your current contract management processes carefully is crucial to see how new software can best support and improve these activities. Look at the different tasks involved in contract management and ask yourself questions such as:
- Collaboration: What tools and methods are currently used to work together on contracts, both internally and with outside parties?
- Negotiation: How are contract terms set, and who is responsible?
- Version control: How do you ensure everyone uses the latest contract version?
- Creation, approval, and signing: What are the steps for creating, approving, and signing contracts? Who handles each part?
- Monitoring key dates and deadlines: How are essential dates tracked, and who oversees them?
- Legal compliance: What measures are taken to ensure contracts follow the law and regulations?
- Internal compliance: What steps are in place to ensure everyone inside the company follows the contract terms?
- Contract performance analysis: How do you evaluate how well contracts are working?
- Verifying compliance of other parties: How do you check and enforce compliance from others involved in the contract?
- Sharing contract information: How is contract information distributed within the company?
- Workflow management: What systems manage the flow of tasks related to contracts?
Each company is different, so use the above points to think about how your company manages contracts from start to finish.
Pick the Right Software
When choosing contract management software, ensure it fits your business needs well. Focus on features important for your specific situation, like customizable workflows, the ability to work with other tools you use, and options for managing compliance. Don’t just look at the cost or how popular the brand is; think about how the software will integrate with how you do things.
Look into these essential features offered by contract management software:
- Automatic version tracking: Logs all changes made to a contract to ensure accurate version control.
- Centralized, searchable contract repository: Allows easy access to all contracts, making management and retrieval more efficient.
- Collaborative tools: Help with real-time stakeholder cooperation, improving negotiation and editing.
- Customizable contract templates: Make creating contracts faster by offering templates that can be adjusted to meet specific needs.
- Analytics and reporting: Offers insights into contract performance and compliance, aiding decision-making.
- Configurable automated workflows, alerts, and notifications: Streamlines routine tasks, sends reminders for key dates, and notifies relevant parties about needed actions, reducing oversight.
- E-signature: This allows contracts to be signed digitally, speeding up the approval process and supporting remote operations.
When evaluating these tools, consider how they could improve your operations and how much your employees will need to adjust to new working methods. Understanding this will help ensure a smoother transition and more successful implementation of the new software.
Get Buy-in From All Stakeholders
Implementing contract management software affects various parts of an organization, such as the legal, finance, procurement, and sales departments. Representatives from these areas should be involved early on to ensure the software integrates smoothly and everyone uses it effectively.
Bringing in stakeholders from the start helps address their specific needs and concerns, increasing the chances that the software will meet the different needs across the organization. Each department faces unique challenges and goals when it comes to managing contracts. For example, the legal department focuses on compliance and risk, finance on billing and revenue, procurement on optimizing supplier terms, and sales on speeding up contract processes to close deals quicker.
Start Small and Scale Gradually
Starting with a small test project when you bring in new contract management software can be helpful. This method lets your organization deal with problems on a small scale before using the software everywhere. First, you can adjust the software to suit your business’s specific needs by using it in one area or department.
This smoother the transition and helps set up custom fields and automated workflows to match your business’s operations. For instance, putting all contracts in one place can make managing them much easier by giving everyone who needs it easy access to contract information. This saves time for contract managers, as they won’t have to keep answering requests for contract details because employees can just look it up themselves. It also helps people who negotiate and write contracts by showing them approved language and key terms, which helps keep contracts consistent.
Make a clear plan for setting up the software and stick to that timeline. Getting caught up in tweaking the software to handle complicated tasks is easy. Avoid endless adjustments that can delay your schedule and focus on what will help. Also, starting small means you can give users focused training, which makes it easier for them to get used to the new system and keeps your business running smoothly.
Using Reporting Tools to Improve and Assess Return on Investment (ROI)
Modern contract management software includes powerful analytics and reporting features that provide detailed insights into contract data. These tools help improve operations and show the software’s return on investment (ROI). You can customize reports, alerts, and dashboards to meet the specific needs of different users, making their jobs easier.
For example, the software can automatically alert employees about important dates, deadlines, and tasks. This helps ensure that key milestones are met, greatly improving contract compliance and reducing the risks of missing important deadlines. The system can also create detailed reports that track and display contract performance. You can tailor these reports to show Key Performance Indicators (KPIs) that matter to your business goals, giving leaders useful information for making decisions.
These reporting features allow leaders to directly compare the results of different strategies, helping them make choices based on solid data. Over time, this data can help measure improvements and refine methods, boosting the efficiency of contract management.
Integrating with Existing Systems
To improve your business’s efficiency, your new contract management software must integrate well with your existing systems, such as Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), and Document Management Systems (DMS). Good integration means data can move smoothly between systems, making workflows more efficient and reducing mistakes.
Integration automates data transfer between systems, so updates made in one system appear automatically in others. This reduces the need for manual data entry, which can be slow and error-prone. For example, connecting contract management software with a CRM system means sales teams can see the latest contract terms in the CRM, which helps them track sales and better manage customer service. Similarly, linking with an ERP system can streamline procurement and financial tasks like invoicing and tracking payments based on the contract terms.
Additionally, linking with document management systems means all contract documents are kept in one secure, easy-to-access place. This helps control versions and provides a record for compliance.
When choosing contract management software, consider how well it integrates with your existing systems. Many software providers offer APIs (Application Programming Interfaces) or ready-made connectors for popular platforms to facilitate this process. You might find working with IT experts or consultants who can integrate your company’s systems helpful during the setup phase.
Invest in Training and Support
Investing in good training and support is key to ensuring everyone uses new contract management software effectively. It’s essential to train all relevant staff when you first start using the software and continuously to keep them updated on new features and best practices. Training should begin by determining what specific skills and knowledge different groups in your organization need. Use a mix of training tools designed to meet these needs, such as interactive modules, step-by-step guides, video tutorials, and FAQs.
Also, hands-on training sessions are important. These can include live demos and workshops based on real scenarios, which help reinforce the training and ensure that staff can manage actual tasks using the software.
Successful software use requires ongoing support and ensuring users accept the new system. Continuous support, such as refresher courses and help desks, can help users adjust to the new system over time.
Monitor, Measure, and Improve Performance
To keep an eye on and enhance the performance of your contract management software, it’s important to follow a structured method:
- Create a Detailed Monitoring Plan: Begin by setting up a thorough plan showing how to track performance and compliance across your contracts’ lifecycle. Decide which measurements are crucial for your business goals and outline how you will monitor these using specific methods and tools.
- Define Clear Metrics and KPIs: Choose clear Key Performance Indicators (KPIs) to gauge important aspects like how long processes take, how well rules are followed, and how satisfied users are. For example, you might look at how often deliveries are on time, compliance rates with contracts, error rates, and how quickly vendors respond. These KPIs should be measurable and achievable and match your organization’s objectives.
- Use Contract Management Software Effectively: Use software features that aid efficient monitoring. This includes automatic reminders for important dates, renewal alerts, and tools for tracking risks, which all help you manage contract performance better.
- Regularly Review and Update Metrics: It’s crucial to check if your KPIs are still relevant. Adjust these measurements based on any changes in your business operations or team members’ feedback to ensure they match your business goals and address current challenges.
- Involve Relevant Team Members: Ensure that everyone involved in the monitoring process knows what they need to do. Assign specific monitoring tasks to the right team members and ensure they understand their roles and responsibilities.
- Analyze Data and Make Decisions: Regularly look over the data you’ve collected to pinpoint areas that need improvement. Use this information to decide where to change your contract management practices or software settings.
- Gather and Use Feedback: Continue collecting feedback from users and stakeholders to understand better their experiences and any issues they face. Use this feedback to improve your methods and adjust the software or processes.
Conclusion
Integrating contract management software into your business can transform contract handling, offering greater efficiency, accuracy, and control. However, success depends on careful planning and implementation. By thoroughly assessing your needs, reviewing current processes, choosing the right software, and ensuring stakeholder buy-in, you can create a solid foundation for a successful rollout.
Starting small, providing targeted training, and prioritizing integration with existing systems will help ease the transition. Ongoing monitoring and feedback are key to maintaining performance and making continuous improvements. When implemented thoughtfully, contract management software becomes a powerful tool for driving operational efficiency, reducing risks, and enhancing collaboration across your organization.