Contract management is a multi-faceted process. Without oversight over each stage in the life of a contract, your organization can suffer from process bottlenecks, missed contract obligations and tasks, wasted time, lawsuits, decreased revenue, and missed opportunities - to name a few. Fortunately, you can increase your ROI by better understanding approaching contract management. Here are the four phases of contract management and how to tackle them with contract management software.
Different Phases of Contract Management
The four different phases of contract management can be a means for your organization to understand contract lifecycle management, from contract requests to contract renewals. For this blog, we will focus on:
- Contract Requests
- Contract Document Assembly & Contract Negotiation
- Contract Approvals & Contract Signatures
- Post-Award Contract Management
Let's take a look at each phase of contract management.
Phase 1 - Contract Requests
Contract requests are the first phase of contract management. This stage allows stakeholders to gather vital details associated with a new contract. The request phase arguably sets the tone for whether a contract experiences efficient processing or is rampant with delays. Inefficient contract request procedures can result in a more elevated risk for critical data loss, disorganized request intake processing, and wasted time.
Your organization must implement a solution that streamlines contract requests - making them more intuitive, straightforward, accurate, and efficient. That solution is leading contract management software.
Leading-edge contract management software can allow your team to configure a request intake form that can practically ensure that appropriate request information is captured in a centralized manner. An easily-navigable screen can enable requestors to efficiently provide the details required - allowing those reviewing and approving requests to conveniently view those details in one place.
Your organization can also establish a request wizard - or a vigorous questionnaire that supports requestors in defining what type of request they need to submit. This direction comes in the form of pre-configured and dynamic questions. After a questionnaire is submitted, your system can direct users to a relevant request page based on their responses.
Phase 2 - Contract Document Assembly & Contract Negotiation
Contract authoring is the first stage in our second phase of contract management. Contract authoring is one of the most critical stages in contract lifecycle management. An ineffective contract authoring process often depends on decentralized contract clauses, lackluster version tracking, emailed communication for internal document collaboration, and storage of contracts of shared drives. These outdated contract authoring methods can stymie organizations' process efficiency and result in error-prone contracts with missing clauses, neglected key dates and milestones, and a confusing process that slows the contract lifecycle. Thankfully, leading contract management software can deliver intelligent contract authoring.
Leading contract management software for contract authoring (among other valuable tools) offers:
- online document editing (including helpful connectors with familiar applications).
- a centralized and secure location for agreements, clauses, document templates, and key data.
- version tracking and detailed audit trails.
- intelligent workflow automation.
- contract intelligence for enhanced clause language, key data extraction, and more.
An online document editing interface within contract management software supports online contract authoring.
Leading-edge contract software provides native tools for better online contract authoring, including those that let your team:
- develop new documents straight from a centralized contract key data page.
- import new documents straight into a centralized contract key data page.
- and edit existing documents straight from a centralized contract key data page with minimal friction.
Furthermore, familiar online document editing connectors can simplify and diversify your process even more. CobbleStone Software – for instance – proffers seamless connectors with Google Workspace and MS Office 365 so that your team can engage in online document editing and contract authoring with improved governance and collaboration versatility.
Trusted contract management software can also support your team's endeavors to keep track of contract authoring versions. Thanks to automated and numbered version tracking and thorough audit trails of documents, your team can maintain oversight of contract document versions with increased assurance that clauses, sections, and contract language are accounted for and accurate.
Rich and configurable contract artificial intelligence can thoroughly transform contract authoring as well. Native contract AI with machine learning – such as CobbleStone Software's VISDOM® AI engine – can be readily configured to identify particular contract language, including clauses and phrases. From there, contract AI can provide insightful language recommendations based on exponentially improving machine learning. Those recommendations can be made available on a configured clause language library. The more information is provided to leading contract intelligence, the more it learns for constantly-improving language recommendations.
Furthermore, contract intelligence can help automate the extraction of metadata to help with legal routing, data extraction, auto-amendment recommendations, and more. Rather than waste precious time, contract AI with machine learning can help hasten and centralize your contract authoring process with insight and unparalleled confidence.
Contract negotiations are a pivotal contract lifecycle management stage in which your organization collaborates with external contract stakeholders to finalize and review a contract. Without the proper tools for contract negotiations, your organization can experience bottlenecks, insert incorrect clauses and contract language, collaborate with stakeholders on incorrect or incomplete contract document versions, overlook changes made by stakeholders, and miss out on contract value - to name a few. Luckily, leading contract management software can improve your contract negotiations processes.
The contract authoring tools mentioned above can be used for contract negotiations, including using the MS Office 365 and Google Workspace connectors mentioned above with external stakeholders! Additionally, contract management software simplifies and automates contract negotiations with:
- the aforementioned contract authoring process that features clause merging from a dynamic clause library.
- clause ownership, which allows your system admins to assign clauses to specific "owners" so that they are alerts when that clause is edited, deleted, or otherwise interacted with.
- organized and streamlined document collaboration and document version control.
- intelligent workflow automation to stay on top of contract negotiation tasks and key dates.
Phase 3 - Contract Approvals & Contract Signatures
Contract approvals can be challenging. Delayed contract approvals can fail to meet business rules, business processes, and business and regulatory compliance standards - possibly leading to overlooked opportunities for time-sensitive pricing options and special terms. Your organization needs to make sure it tackles contract approvals with the right tools.
User-friendly contract management software offers contract approval process clarity with automated approval routing. Automated alerts and notifications regarding when a document needs approval simplify the process and promote accountability. Updates concerning changes in chain-of-approval allow stakeholders to quickly obtain updates about who needs to approve actions and tasks concerning a given contract.
Intelligent workflow automation with contract management software shortens contract approval time by helping eradicate potential bottlenecks and helping ensure that those involved in the approval process perform the proper actions on time.
Gathering necessary contract signatures can be difficult, especially when your organization operates with multiple signatories in different locations. Considering signatures finalize contracts and drive their post-award execution, this anticipated step can be hindered with manual wet signatures and disorganized signing processes. Luckily, you can enhance, modernize, and streamline your signing processes with electronic signatures within contract management software.
A configurable and user-friendly electronic signature tool within a contract management system helps keep the signing processes moving, whether essential signatories are in the office or working remotely. Your contract management team can employ trusted electronic signature software to keep collaboration and electronic signing processes running smoothly, thanks to:
- faster signing.
- straightforward, one-off signatures.
- a rules-based electronic signing process.
- and more!
Enjoy an expedited, user-friendly, and configurable signing in or out of the office with a state-of-the-art electronic signature software interface.
To learn more about electronic signatures, watch the video below!
Phase 4 - Post-Award Contract Management
Manage Contract Obligations & Contract Compliance
Diligence concerning punctual contract obligation fulfillment is essential to healthy contract management processes. Therefore, an organized process can help your team meet contractual requirements and supply attention to more strategic elements of contract management - such as contract analytics and opportunity realization.
Your team can virtually always be ahead of the curve with contract management software. With automated and user-friendly tools that encourage accountability, your team can practically rest assured knowing that contract processes can occur without issue. For obligations or contract compliance standards that must quickly be addressed, contract management software can notify involved parties with automated task and key date alerts, compliance and obligation status reports, and user-friendly system dashboards.
Contract obligations and compliance are crucial stages of the contract lifecycle for parties to track. The initial lifecycle stages are for nothing unless contract terms and conditions are followed through upon. Leading contract management software delivers the visibility parties need to effectively manage contracts post-execution.
For example, CobbleStone Software supports OFAC search to practically ensure that counterparties, vendors, employees, customers, and other necessary resources are compliant according to the US Department of the Treasury.
A solid foundation of contract management best practices offers contract and legal professionals the mastery to oversee post-approval stages of the contract lifecycle. Leading contract management software can intelligently notify parties whether a contract's standards and terms have been satisfied. Obligations and compliance can be monitored so that parties meet expectations civilly - reducing litigation hang-ups.
Manual contract renewals involving cluttered spreadsheets, erratic emails, emailed reminders, internal billing systems, and wet signatures may cut it if your organization if you are still managing low contract volume and a lack of significant complexity. However, problems can arise when your team starts working with thousands of diverse contracts of various contract types due to a delayed, inefficient, and error-prone manual contract renewal process. Additionally, such obsolete contract renewal procedures can augment risk and hinder opportunity realization. Thankfully, contract management software can streamline and enhance contract renewals.
Your organization can utilize configurable, user-friendly contract management software that automates contract renewals with:
- Reminders and calendar alerts for efficacious renewal task and deadline management.
- A secure contract repository with version tracking to help your team search and access up-to-date versions of agreements up for renewal.
- Detailed CLM audit trails to more easily track renewal statuses and each change made throughout the life of the contract - including contract renewal requirements.
- Intelligent contract management workflows to automate your team's tasks for contract renewals - including task escalation for tight renewal deadlines.
- Contract analytics for understanding of the value and risk of various contract types - simplifying contract renewal decisions.
Tackle the Phases of Contract Management Today!
Now you know the four different phases of contract management and how to tackle them with contract management software. At this point, you should consider trusting an award-winning contract management software platform that provides all of the contract management tools mentioned above. That solution is CobbleStone Contract Insight.
Just look at how CobbleStone transformed legal operations in 2021 alone! It's no wonder why Forrester names CobbleStone a Leader in CLM software!
Book your free demo of CobbleStone today to see all the award-winning tools you can use to tackle the phases of contract management!