Key Problems and Solutions of Online Contract Management in 2022-2023
The traditional modes of managing contracts are inflexible and difficult to adapt to new business trends. Whether it is about reducing contract risks or ensuring a great user experience, a manual approach is not an effective way to retain customers.
According to statistics, a company takes 20 to 30 days to manually create, negotiate, and finalize contracts. However, online contract management is an efficient alternative to automate the process, saving time and energy.
An online contract management system is an advanced solution to overcome the challenges faced by enterprises in recent times. It provides real-time collaboration on contracts, automates the contract lifecycle, and offers an effective solution to emerging problems.
In this article, you can get an idea of challenges occurring in the contract management process and their related solutions provided by contract management software online.
What is Online Contract Management?
Online contract management is a method of tracking and monitoring contracts. It’s also known as electronic document management (EDM), which keeps track of all your documents in one place. It ensures 24/7 automated, real-time access to contract details, including interpretation terms, agreement, delivery terms, and changes.
Online contract management allows more efficient and cost-effective processing of contracts than a manual approach.
How Online Contract Management Came into Existence?
The entire contract management process brings a whole lot of stress. Keeping all parties on the same page, designating the employees’ specific positions, and carrying out the negotiations demands considerable effort.
With rising complexity, organizations needed an automated process to save time, effort, and money. The increased demands sparked the need for contract management online software, and that’s how it came into existence.
Online contract management has become increasingly common in the last few years. The main goal of the advanced approach is to ease the management of large amounts of data and documents, especially when using cloud-based solutions.
Key Problems of Contract Management with Proposed Solutions
The prominent issues and their respective solutions proposed by online contract management system are as follows:
1. Problem: Disorganized Contracts Storage Leading to Risks
Contracts are an integral part of business operations. They define the terms and conditions that govern the relationship between parties. If contracts are not properly stored and managed, they can lead to legal disputes, delays in executing contracts, and even fraud risks. It can pose trouble for businesses to manage their operations.
The outdated storage methods like file cabinets, shared drives, sporadic emails, and locally saved documents can cause serious problems and reduce transparency.
Solution: Secure and Searchable Contract Repository
Creating a contract repository that is secure, searchable, and easy to navigate is the ultimate solution. It will protect confidential data, improve contract oversight, promote document version control, manage risks and regulate contract performance. Additionally, the contract repository allows easy access to the stored contracts.
It will also contain all amendments, modifications, and deletions made to these contracts over time so they can become easy to locate when needed.
2. Problem: Outdated Workflow Management
The outdated manual workflow management steps are loosely defined, slow and error-prone. The stages of the contract lifecycle need more attention as we can’t totally rely on manual tracking methods, decentralized emails, and separate spreadsheets.
Moreover, the risks, including missed deadlines and uncompleted tasks, can significantly affect the contract life cycle resulting in reduced profits.
Solution: Automated Contract Workflow
The best online contract management software enables workflow and contract automation. It automatically creates tasks, tracks progress, reports on status, and sends reminders/ key alerts when a task is completed or needs attention.
On the other hand, it supports the whole contract management process, maintains records, undergoes audits, and assesses negotiations. Automated reminders help in timely task delivery and proper accountability for better results.
3. Problem: Manual Contract and Document Drafting Results in Mistakes
With increased business transactions, contract drafting and document assembly are becoming a bottleneck for businesses. Thus, relying on manual processes makes it tiring, time-consuming, and prone to human errors.
The draining tasks, including the insertion of data and downloading templates sequentially, takes up the efforts and time of the team members if done manually. The entire responsibility may result in poor compliance and reduced attention toward huge administrative tasks.
Solution: Automated Contract Assembly Software with Pre-built Templates
Automated document assembly software is a solution to all the above problems. It automates even the most complex contracts by streamlining the contract management process. The contract assembly also provides a user-friendly interface and ensures easy assembly of contracts in real-time. You can expect zero errors, easy storage, and great compliance using online contract management software for document assembly.
Not just that, the pre-built templates reduce the effort of generating templates each time, which saves time and resources.
4. Problem: Poor Contract Tracking Giving Rise to Contract Failure Rates
The manual process of tracking contracts may go well with organizations with low contract volume. However, the complexity increases when contract rates go beyond hundreds and thousands, resulting in contract failure.
Poor contract tracking methods, including disorganized filing systems, diverse emails, and limited spreadsheets, may put an organization at operational risk.
Solution: Advanced Contract Tracking Features
Advanced contract tracking makes it easy to track the contracts as they progress through various stages, including drafting, negotiation, and execution.
The automated tracking features ensure enhanced visibility, secure repository, contract reporting, etc. It helps organizations analyze each stage’s performance metrics to improve the contract life cycle. Moreover, the advanced features make it easy to identify the problems before they become serious issues for the company.
5. Problem: Slow Manual Signing Process
Signing documents using outdated methods like printing, wet signatures, mailing, and paperwork is extremely overwhelming. The wet signatures negatively impact the experience of internal and external parties. Furthermore, the paper-based process and mailing costs huge sums and take up administrative time.
The manual contract signing may also cause delayed contract execution, increased cost, poor compliance, missed obligations, and compromised organizational reputation.
Solution: Electronic Signature Technology
A digital signature technology is the most reliable solution that makes the whole procedure easy, authentic, and secure. It plays a vital role in improving the contract lifecycle, saving time, enhancing security, and improving business relationships. Using encryption technology, you can ensure the authenticity of signatures.
Online Contract Management (The Need of the Time)
The advent of technology has opened up new avenues for businesses to grow while at the same time improving efficiency and customer experience.
This development has also greatly impacted contract management, as companies now deal with more complex contracts than ever. So they require more customized and automated solutions like contract management online to standardize the operations.
A poor contract management system can lead to disrupted communication, delays in delivery, and result in failure. In addition, it makes it difficult for businesses to manage their relationships with customers and vendors. Online contract management is the ultimate solution to all these problems. It facilitates your business in many ways and provides better solutions to manage contracts online.