Contract Management Automation: What is it and how can it Benefit You?
Contract management automation is a computer program that stores, manages, and tracks information pertaining to contracts you have with customers, suppliers, agencies, and other critical institutions that help you accomplish your business goals.
Depending on your specific business, contract management automation (CMA) can ensure that you will have your contracts and associated documents all in one place. It will flag and alert the necessary people about the important details related to negotiation, completion, and deadlines.
Is There Software for Automating Healthcare Contract Management
When it comes to contract management automation, there is a platform suitable for every business. In healthcare, utilizing automating healthcare contract management systems with contract automation software is essential.
Since there are often many agencies that a healthcare institution works with, utilizing CMAs are useful for organizing contacts with:
- Insurance companies
- Cleaning staff
- Labor unions
- Other contract-oriented organizations
All of these factors require contracts to accomplish your goals. If a contract is not fulfilled, there may be enormous implications in both the legal and financial realms.
Automating healthcare contract management becomes critical since you need to manage multiple contracts simultaneously. CMAs can also provide you with contract assembly services that help you draft and prepare contracts and their associated documents, data, and status. If a contract is close to expiring, a proper CMA will alert you to these issues as well, so that the appropriate people can work on renegotiating or extending a contract that is currently in place.
Arguments for Automating Healthcare Contract Management
Healthcare is one of the most complex industries on the market right now — one that’s built on not only multiple vendors and suppliers, but on compliance issues and governmental oversight. CLM software becomes a key factor in managing the intricacies of contract negotiation as well as a contract’s life cycle. A healthcare provider, at any given time, may have dozens of open contracts up and marching — not only with suppliers but with insurance companies, outpatient care facilities, third-party contractors, etc.
According to the latest Black Book Market Research, more than $157 billion is spent in the US alone on manual contract management — and that number, due to the influx of patients and current events will only grow. A CLM software allows you to cut back on these charges and have a better-optimized service.
Another pivotal element to consider, with automating healthcare contract management and CLM software, is COVID-19. Most contracts now require a prerequisite due to the current 2020-2021 crisis. Contracts evolved and now have clauses that automation can handle rapidly and without too many man-hours involved.
The healthcare industry continually evolves and automation allows you to properly manage and handle that stress. Those continually evolving factors, due to new bills, governmental oversight, or scientific discovery suddenly have a huge weight on how you manage and negotiate your contracts.
Contract Negotiation Automation
When contacts need to be negotiated, saving time and money on legal services is critical to the success of a business. Having your entire contract negotiations automated will prove to be lucrative, especially for large institutions.
A CMA can provide you with contract lifecycle automation, which will alert you when a contract is coming close to ending, as well as automate contract creation for new clients. Instead of having a large legal team dedicated to drafting contracts, a CMA can help draft contacts for you through the use of contract assembly software. You can have just one person review contracts rather than an entire department of legal advisors.
Once a contract is executed, contract management software can begin monitoring contract compliance and alert you to any issues that may arise. If there are deadlines that need to be met, this software can send that information to the appropriate individual to ensure that the execution occurs in a timely manner.
Contract Management Workflow Systems
Another feature of CMA is its ability to manage workflows. Contract management workflow systems allow you to stay on top of what production stage each individual and completed product are in or if there are delays.
Automated workflow systems help you work faster and more efficiently to ensure you are reaching your deadlines in a timely manner. If a delay should arise, the CMA will notify the appropriate person to find out why a delay is happening and manage any issues that may result from missing a target date. It can also help you plan or adjust completion dates down the line that are impacted by the unintended setback.
For example, if your company uses a contract management system to stay on top of the production of parts and the assembly of airplane seats for a client, you will want to be informed of the order’s progress at each step of the way. If there is a delay on the assembly line because of missing components or broken parts, this could delay your completion date.
3 Key Areas of Contract Management Workflow Automation
The main goal of contact automation software is to make the generalized workflow more efficient. Not only to properly organize your teams but to drive actions and optimize the movement of work from one department to the other — of creating an easy-to-manage, highly dynamic, flexible, and fast system. The three main pillars on which CLM software positions itself is:
- Contract generation: With the help of contract automation software, generating new contracts based on predefined criteria has never been easier. Automation allows you to create contracts that adapt to your workflow and also to the needs of each project without the need for continual human input.
- Internal approvals: Ask yourself, “how many thumbs up did you need while drafting your last contract?” How much time did you spend seeking out department heads and key staff members? How many edits and back and forth did it take? Automation allows you to synch teams up without your continuous shepherding. Contracts are approved, edited, and earmarked for revisions without your efforts. Internal approval is easier and far more efficient.
- Tracking: contracts have predetermined life cycles, not just from their inception but through their due date. Moments and events that mark their lives — times and dates where certain actions have to take place. Contract management workflow automation makes the whole process of manually checking up whether or not an action was performed redundantly. The contract automation software controls all due dates and key schedule points — updating you on their progress and keeping track of their progress.
Why is knowing about delays important?
If you don’t know that there is a delay due to not having CMA, and your customer calls to see if the airplane seat buildout is on track, you will not be able to give them a prompt answer without going down to the assembly line and asking for an update.
With CMA and workflow systems, you can see whether or not there is a delay, in what phase the delay is taking place, and get an updated estimated date of completion. You can then easily update your client about the setback and work on reassuring them that you will minimize the delay in product delivery.
Contract management is an essential aspect of medium and large organizations. In order to be successful, many contracts are often in place simultaneously, but having the ability to stay on top of each contract without reading each one continuously is a huge time-saver and will help you operate more efficiently.