What is Contract Management?

    Contract management is the process of managing contract creation, execution and analysis to maximize the operational performance of businesses and to reduce financial risk. Contract management’s value comes from the time and money saved generating, reviewing, approving, signing and renewing contracts. These savings can make room for a company to expand its sales and increase its revenue.

    Contracts take the longest in the Quote-to-Cash process

    Contract Management is not the only part of the sales cycle, but it is often the longest because it involves so many stages and stakeholders. Half of respondents to a 2016 SpringCM survey said their contract process takes at least four weeks. Compare this to the average time it takes to deliver a quote to the customer—about five hours. If a company truly wants to shorten the sales cycle, contract management is an obvious, but worthwhile, place to start, shortening the contract process to a period of days.

    How Contract Management Solutions Work

    A secure cloud repository is the most crucial feature of any contract management solution. The cloud enables benefits that address and revolutionize each step of a contract process, including:

    Creating

    Agile contract generation capabilities are made possible by the cloud, empowering salespeople to quickly generate new contracts using pre-approved templates where information can be merged from other locations like a customer relationship manager (CRM).

    Sharing

    Contract changes can easily be shared when a contract is stored and edited in the cloud. This ensures all stakeholders are looking at the same document, eliminating the risks involved with multiple versions and emailing contracts back and forth.

    Storing

    A recent SpringCM survey revealed that almost 45 percent of contracts are being stored in shared drives, where contracts can become misplaced or lost in a system of folders. Contracts stored in the cloud are also easier to find, leveraging customized tags that allow saved contracts to be located in seconds.

    How Automation Benefits the Contract Process

    Contract management solutions eliminate repetitive, manual tasks that are vulnerable to human error.

    Tracking

    Salespeople need to know the status of contract negotiations in order to understand when the deal will close. A contract management software records every action taken on the document, creating transparency and predictability in the process.

    Approvals

    Contract management solutions can automatically route the contract to the appropriate approver when it’s her turn to sign, eliminating the need to “hunt” for the right person. Some contract management tools integrate with electronic signature capabilities, eliminating paper and even allowing signature’s from a mobile device.

    Renewals

    In a traditional contract process, renewals may be overlooked when salespeople have other contracts in motion. Contract management solutions can help you extend revenue and customer relationships by enabling you to set automatic reminders well ahead of renewal dates. Leveraged with a CRM, contract terms and customer information can be easily stored and accessed, giving a head-start on any reviews required before a renewal.

    Transforming Business Processes with Contract Management

    Contract Management 101 Cover

    Today, organizations are leveraging technologies like CLM and contract management solutions to transform critical business processes, driving productivity, increasing visibility and reducing risk associated with critical business processes.

    To learn more, read Contract Management 101, our comprehensive guide to contract management and the benefits of contract management solutions.

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