updated - September 20, 2020 Sunday EDT
If the question 'what is contract management?' is pertinent to your business operations, the chances are you'll benefit from automation.
Contracts are a crucial component of any successful business. Whether it's a contract with a customer, supplier, or other important parties, the chances are your contract portfolio is the lifeblood of your business.
After all, without contracts, it would be difficult to function as a business. As a big organization, you'll have a huge volume of contracts to manage, and this volume increases as operations grow. Managing thousands of contracts is a difficult task, a complex situation that can get out of hand when dealt with manually.
Human error is magnified at scale. However, by automating your contract management you can minimize many of the associated risks your business faces. Doing so makes life considerably easier while freeing up time for staff to focus on other activities.
With this being said, how exactly can big businesses benefit from automated contract management? Let's take a look at some of the leading advantages:
Contracts are rarely easily accessible when using a conventional contract management approach. Imagine the prospect of sifting through countless contracts to discover a small piece of information, especially when contracts are scattered across various locations.
When contracts are managed in a central location, utilizing a digital system, accessing whatever information you need becomes incredibly easy. An automated contract management system will represent a repository of all of your contracts and relevant documents, from which you can easily search for what you need within a matter of seconds.
This enables you to regain control over your contract lifecycle management process.
With an automated approach to contract management, where contracts and other documents are stored within a central repository, the security of your company's sensitive information is greatly improved.
Though cybersecurity is an emerging issue, most digital systems use encryption to sufficiently protect information. This safeguards against concerns like the leakage of data to external contractors, where breaches are a genuine possibility.
Rather than leaving information susceptible to hackers, you can use an automated contract management system to store confidential information on the cloud. Here it will be much more secure than when stored on your own internal networks, where information can be hacked by advanced cybercriminals, or perhaps a disgruntled employee on their way out.
When storing confidential information on the cloud, you can set limits as to who can access said information. You can also configure editing and sharing privileges according to what makes practical sense.
Consequently, you can conduct business safely and securely.
Contracts represent a serious commitment between two parties. No two contracts are the same, with each having its own unique set of regulatory requirements and policies. This makes committing to various obligations a challenging task, one which is difficult to execute without the requisite automation.
Most digital solutions will help you keep track of the status and requirements of each contract within your portfolio. This is extremely helpful because it takes the manual load of distinguishing between different requirements off of your team's shoulders. This will reduce the risks your organization faces while keeping all parties happy as part of a more efficient business process.
What's great about automation is you can reduce many of the costs associated with manual contract management. Contract administration involves hiring a team of professionals to manage vital documents, something which can be incredibly expensive for organizations.
With automation, you can free up resources to be invested elsewhere, allowing staff to focus on core competencies as opposed to mundane contract management. Human error can be costly too, which is why automation is a preferred approach for establishing a standardized workflow.
There are other saving opportunities. For example, avoiding penalties for noncompliance or payment errors, or increasing the likelihood of receiving a rebate. Better contact management enables you to take advantage of opportunities when they arise, something which can be achieved with automated contract administration.
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