5 tips for choosing a contract management system
Why you need a contract management system – let us challenge you:
How many agreements and contracts does your organization have?
In our experience, there are more than you might realise, so there are several factors to consider when choosing a contract management system. How do you move contracts, what contract data creates value for you, who are the contract managers and does it support your business.
In general, a contract management system can support your organisation’s control over the contract management process, storage of contracts and related documents – and give you an overview of your obligations. The same considerations apply when choosing a contract management system as when choosing other business-critical systems – which one is the right one for you depends on your needs.
Here are five tips for choosing a contract management system.
Where should the contract data come from?
Create the best possible overview of your current contract portfolio and what master data you have in your contracts – this data is often contract type (purchase/sale/staff), contract parties, contract sum, contract manager, expiry date, terms and conditions and signed documents.
“Regardless of industry and company type, we have found that companies with more than 50 employees have at least 150 contracts and even more documents divided into their purchase, sales and employment contracts.”
Christian Richter-Pedersen
CEO & Partner, COMAsystem
Review the network drive, SharePoint and binders for the departments or areas where you want to implement a contract management system. With a solid data foundation, it will be possible to follow up on the obligations of each contract, automate workflows and set up alarms and notifications – so you can decide well in advance of an important deadline whether, for example, a contract should be renegotiated or cancelled.
If you have business-critical data that doesn’t belong to standard contract data, such as a case number that refers to your internal manufacturing plan in production it’s important to choose a system that can support your non-standardised data needs through a structured but flexible solution.
What contract types do you have and who should have access?
Identify the contract types you want to move into your future contract management system – enabling you to get an idea of the number of purchase, sales and employment contracts.
Sales and employee contracts often follow the same template and can vary by product, service or employment type – which is why you should choose a solution that can make your static Word templates dynamic and merge contract data and template.
Centrally managed templates minimise risks by ensuring that legal issues are taken care of when setting up the templates – and users who create a new contract from a template can only enrich it with predetermined data entered in the contract management system.
“We register and log every action a user takes on every contract – and login can be configured for 2-factor authentication and integration with Single Sign On.”
Christian Richter-Pedersen
CEO & Partner, COMAsystem
Choose a system where you can control access so that each contract has one contract manager and can only be accessed by the employees who actually need it – in this way, sensitive personal data in an employment contract, for example, can only be seen by the employee’s manager and the HR manager.
Consider the entire contract lifecycle
Every contract goes through several steps in its lifetime and many of them repeatedly – a contract goes through at least these four steps:
- Identifying needs
- Negotiation of terms
- Drafting a contract
- Contract approval
Review your contract processes for each contract type and prioritize the outcomes you expect to achieve by implementing a contract management system and the certainty it can give you over the lifecycle of each contract.
When choosing a contract management system, the system prioritisation you make must be aligned with both your short- and long-term needs. Choose the solution that can digitise and facilitate workflows, provide a comprehensive overview of the status of contracts – and is easy to implement in your organisation.
“Choose a contract management system that is intuitive, flexible and supports your business”
Be aware of time aspect and implementation process
A contract management system only creates value when used by your employees – so identify which departments, functions and people are expected to gain the most value from its use.
This will give you a good overview of which resources to include in the system selection and subsequent implementation.
Pick the low-hanging fruit and choose a contract management system that supports your business – and start with the areas and departments where the data quality is best. This way, implementation is as smooth as possible and your employees quickly get value from the system.
Have a realistic level of ambition
One last piece of advice, don’t underestimate the business aspects – depending on the choice of contract management system, there is a big difference in the types of business they best support and their ability to adapt to your needs.
By setting a realistic ambition level in relation to your internal resources, the best advice is – choose a contract management system that is intuitive, flexible and supports your business
If you choose contract management from COMAsystem, we support you every step of the way and structure the solution to match your workflows – ensuring that the implementation doesn’t drain your organisation’s resources. If you want to find out how our contract management system can create value for you, book a demo here.
