Adopting cloud-based contract management solutions is a great way to ensure your business gains a competitive edge while supporting your company’s departments through every contract lifecycle stage.
Contracts are the core of any business and properly managing these important documents helps you succeed long-term. Poor contract management strategies put your business at risk and failure to follow contractual obligations. In fact, 90% of professionals claim that they find contracts either difficult or impossible to understand.
It’s always important to know what role contracts play in your business, and in this article, we’ll be learning more about how cloud contract management solutions can help minimize risk and enhance business efficiency.
Centralized document storage
Cloud-based contract management solutions store all contracts in a single centralized repository. This repository serves as a secure place where contracts and other support documents are stored. Users can use quick search functionalities to quickly find specific key terms or contracts, significantly reducing the time required to manually search through files.
Also, the centralized repository grants authorized stakeholders access to relevant contracts, allowing real-time collaboration irrespective of geographical constraints. This approach not only improves document security but also optimizes the decision-making process, reducing operational risks and enhancing the efficiency of your contract lifecycle management.
Automated workflow process
Cloud contract management solutions increase business efficiency with the help of automated workflow management. Automated workflows streamline every stage of the contract lifecycle, reducing the chances of errors and any manual interventions, and making managing cloud contracts easier.
However, let’s take a deeper look at how automated workflows are used in cloud contract management:
- Contract drafting and creation: You can set up contract templates with pre-approved clauses. This doesn’t waste your time as it quickly generates contracts when you select a template instead of creating one from scratch.
- Clause library: Cloud contract management platforms have a clause library that you can use to drag and drop into contracts, making sure that you are complying with company standards.
- Integration of e-signatures: Most cloud contract platforms integrate with e-signature tools. Signatures can be given out once a contract is approved.
- Contract reviews and negotiation: Automated workflows can track every change made to a contract during negotiations. This allows parties to compare versions and see all changes that were made.
- Contract renewals and expirations: Before a contract is about to expire, you’ll be getting a notification, making sure your key dates are never missed. Also, when a contract is due for renewal, automated workflows can send updated terms to parties for review.
Automated workflows help business owners save lots of time and minimize errors. Also, it makes sure that contracts are aligned with the company’s policies and regulatory requirements, reducing potential risks.
Data-driven insights
A huge advantage cloud-based contract management solutions provide you with data-driven insights that help you make more informed decisions and optimize contract performance.
Let’s take a closer look at how data-driven insights enhance cloud-based contract management:
- Centralized data location: Cloud platforms centralize contract-related data, making it much easier for you to stay updated with ongoing trends across the lifecycle of the entire contract. These details include contract types, key clauses when the contract was approved or amended if the contract is complying with set standards, and other important information.
- Activity tracking: The platform will track user activities, such as who accessed, edited, and approved contracts. This is really helpful in identifying any inefficiencies. Also, it helps in understanding how external and internal teams collaborate with each other to refine workflows and reduce cycle times.
- Performance metrics and KPIs: Cloud-based contract management solutions will track important KPIs like the contract’s cycle time, contract volume, renewal success rate, and negotiation frequency. These KPIs help you learn more about which areas you need to make improvements
- Cost and savings analysis: Measures the cost of managing contracts and identifying cost-saving opportunities through automated workflows, streamlined renewals, and reduced renegotiations. Statistics show that cloud-based contract management solutions reduce administrative costs by 25%-30%.
Data-driven insights are important and can be used by different departments such as sales, procurements, and legal teams to analyze data if the contracts maximize revenue or not and if they are reducing costs, complying with contract terms, and enhancing business efficiency.
Enhanced collaboration
Contract management solutions improve collaboration by providing a centralized and secure platform for teams across different departments to collaborate on contracts in real time. Through this digital workspace, stakeholders from different departments and other members can access and review contract documents.
Most of these platforms offer role-based access control (RBAC) that only allows authorized users to have access to specific actions, and documents. This prevents unauthorized changes and protects important information.
Also, many cloud-based solutions have in-app messaging functions that allow team members to communicate with each other without leaving the platform, enhancing collaboration efficiency. They integrate with email systems, allowing notifications and alerts to be directly sent to stakeholders’ inboxes, making sure that nobody is missing any important updates.
To fully enhance collaboration in your cloud contract management platform, it’s best to follow these practices:
- Define important permissions and roles: Set clear permissions and roles for stakeholders that are involved in the contract lifecycle to prevent any unauthorized changes and protect sensitive information.
- Train your team members: Make sure that team members are comfortable with your collaboration features. It’s best to first train them until they are comfortable to regularly collaborate.
- Monitor the communication process and its progress: Also use dashboards to keep a close eye on contract progress, and make sure that communication amongst all parties is smooth and healthy.
- Define each member’s role and permissions: All members involved in the contract lifecycle need to have clear roles and permissions to prevent any unauthorized changes and protect sensitive data at the maximum.
Collaboration is an important part of cloud contract management solutions and brings efficiency, speed, and transparency into the contract lifecycle. By centralizing communication, enabling real-time editing, and defining each member’s role and permissions, businesses can easily improve teamwork and reduce risks.
Key components to pay attention to when choosing the right cloud contract management solution for your business
Choosing a top cloud contract management system is an important step for any company that wants to simplify tasks, process contracts, and improve its overall processes. That being said, here are the key components to follow for making a better decision:
- Clarify what your requirements are: To effectively manage your contracts, you have to first find out what your business needs from a contract management system. Create a comprehensive list of requirements, user roles, collaboration requirements, how easily they integrate with other tools, and the ability to generate useful reports.
- Cloud security: Your cloud contract management system should have strong security measures. High-quality security measures include role-based access controls, complying with industry standards like the GDPR, multi-factor authentication, and data encryption.
- Ease of use: User-friendly interfaces will help in reducing training time and increase productivity rates.
- Adaptability: Choose a contract management system that adapts to your company’s individual processes and contract templates. This flexibility makes sure that the system fits well with your work processes and works smoothly.
- Integration capabilities: Integrating with customer relationship management systems (CRMs), Enterprise Resource Planning systems (ERPs), and other systems increases data accuracy and efficiency.
- Scalability: Ensure that the chosen system can handle your company’s growth in terms of contract volume. Scalability is important for avoiding frequent software migrations.
- Search and reporting: It’s always important that the platform allows quick searches for keywords, tags, and metadata. Advanced reporting features provide advanced insights for contract performance and contract renewals.
- Total Cost of Ownership (TCO): When choosing a contract management system, always pay close attention to the total costs and not only the subscription fees. Compare prices between different providers to see which one offers the best value for the investment you make.
- Data backup and migration: If you’re switching to cloud contract management systems, you must check their reputations. Ask for recommendations, read reviews, and check on their reliability and how up-to-date products are.
After you are done going through these steps, it’ll be easier for you to make your final decision and choose the ideal cloud contract management tool.
Using cloud-based contract management solutions is the future of businesses
Cloud contract management solutions offer a comprehensive approach to handling an entire contract lifecycle. By leveraging automation, data-driven insights, and collaboration tools, these platforms empower businesses to reduce manual errors, improve compliance, and contract processes.
Overall, using cloud contract management solutions enhances business efficiency by making more informed decisions, reducing costs, and having a competitive advantage in the business landscape.
About The Author:
Tony Ademi is a freelance SEO content and copywriter. He has been in the writing industry for three years and has managed to write hundreds of SEO-optimized articles. Moreover, he has written articles that have ranked #1 on Google. Tony’s primary concern when writing an article is to do extensive research and ensure that the reader is engaged until the end.
