How does contract management software work?
- Creating standardized drafts of contracts: It helps to prepare standardized contracts to eliminate situations that cause time loss during the preparation stages of similar contracts. In most cases, the input of contract scope, milestones and goals give an output of a contract draft.
- Monitoring contract commitments: These features enable users to notify deviations in the workflow and track commitments made. It also allows users to compare contracts with existing regulatory frameworks.
- Analytics and reporting: Software analyzes and reports the evaluation of contract performance according to contract type and status. AI-powered CMS tools can make suggestions for future contracts by extracting insights from large volumes of data.
- Document management: Complex documentation makes it difficult to follow the essentials of contracts. An important feature of CMS tools is document management. It is a challenge to search and find an essential information within a large volume of data. CMS tools make it easy and fast.
Why does contract management software important now?
SpringCM surveyed and concluded that 66 % of the companies have problems with the contract approval process leading deals to stall. 52% of respondents in the same survey claimed that tracking obligations, deliverables and key events are the biggest contract management challenges. According to Harvard business review, suboptimal contracting can cause businesses to lose 5% and 40% of contract value. Such losses can be minimized thanks to AI-based tools that reduce manual errors and help employees focus on more important aspects of contracting.
Furthermore, “smart contracts” (self-verifying, self-executing agreements that can function autonomously) represents the automated contract process to manage increased contract traffic in blockchain technology. Smart contracts in contract management software increase the level of automation in contract processes and lifecycles. For more information about smart contracts, feel free to read our article.
How to choose the right solution for your business?
The main factor for choosing the right CMS software is related to the size of the business. Small and medium businesses that focus on specific operational areas can choose software that focuses on features such as automatic contract creation and storage. For example, a reliable electronic storage medium resolves the problems related to contract renewal rather than conventional physical paper storage methods.
Maintaining coordination can be a key point for large businesses. Tools with different modules, especially AI-based software, give an opportunity to solve operational problems of contract management. For example, in a contract involving more than one party, it is important to automate the approval process, to follow the critical points in the contractual obligations and warnings. Platforms with CRM integrations can lead to time savings by facilitating the involvement of sales, customer and legal in contracting. Numerous companies provide such integrations. For example, Icertis CMS can be integrated to Microsoft Dynamics CRM and Ultria CLM can be integrated to Salesforce.