Proper contract management is vital for the health of an organization’s contract lifecycle. Despite the importance of forming a solid foundation for contracting, most organizations do not use a contract playbook. Considering that these tools for contract procedure establishment are instrumental in helping many departments within an organization to share a universal understanding of standard contract processes and improve contract performance, this is surprising. When a contract playbook is paired with leading contract management software, organizations are equipped with powerful tools for efficient, cost-effective, and organized contract management. Given the importance and under-use of contract playbooks, here is how organizations should establish them for next-level, automated contract management.
The Issue with Manual Contract Playbook Creation
Depending on contract complexity and the approach taken, the development of a contract playbook might require some serious time and resources. This is especially true for procedures that necessitate cutting and pasting individual contract clauses from various agreements and providing explanations of the language used, typical objections to clauses, and fallbacks.
Without the aid of contract lifecycle management software, contract management teams are required to review past contract trends and clauses manually. They must go through all clauses where the template has been deviated from and try to analyze why this may have occurred, create possible fallbacks, and keep necessary departments aware of the process with emails and spreadsheets.
From there, organizations must have a chain of approval in place for how to proceed when a contracting party does not agree to established terms or fallbacks, and this chain of interaction may involve emails, phone calls, or other potentially inefficient forms of communication. Risk and reward are balanced to decide how to proceed with such contracts, which often includes tedious and error-prone calculation and analysis.
After that, a plan for a manual signing process might commence, which can be slow and paper-based – potentially wasting administrative time and money (mailing fees). Outdated signature procedures relying upon paper, printers, mail, wet signatures, and repeated follow up can lead to contract execution bottlenecks and a potentially compromised reputation.
A Contract Playbook with Contract Management Software
Luckily, virtually all of the time- and money-wasting issues and inconveniences mentioned above can be avoided. Organizations can establish a reliable strategy for various types of present and future contracts with robust contract management software solutions!
For clause management and analysis, AI-based contract management software allows contract management teams to establish a pre-approved clause library – which acts as a part of a contract playbook in and of itself. This centralized repository of standard, fallback, and alternative clauses can be used for inclusion during contract writing. It can also be used during the contract negotiation process, allowing approval process personnel to access and insert standard, fallback, and alternative language as redlines easily.
User-friendly and straightforward rules-based clause inclusion keeps an organization’s departments (NOT just legal) in the know regarding when and where within a contract specific clauses should be used, as well as where to use alternative or fallback clauses. This information can be easily recommended and saved within an enterprise contract management software system.
Furthermore, clauses can be designated as negotiable or non-negotiable. Non-negotiable clauses within the system can be set to prevent editing. That way, rather than needing to track what clauses can and cannot be amended manually, organizations can instead lock specific clauses.
Contract management software can eliminate the need for email, spreadsheets, and other inefficient forms of communication regarding contracts that must be heavily edited and analyzed for risk. Contract management AI helps organizations to mitigate and assess risk by scanning for potential ambiguities and, with fuzzy logic matching, highlighting words that might need further clarification.
From there, the simplified review of potential risk areas takes the place of manual document scanning for keywords. An intelligent, dynamic visual aid – such as a risk assessment matrix – can provide contract management teams with the tools to quickly visualize and thoroughly analyze possible risk outcomes.
Contract risk tools help save time, but they cannot replace the attention and care of human employees. Thus, they should be leveraged and included in a contract playbook – which these tools simplify significantly.
Once procedures are put in place for contract creation, negotiation, risk analysis, etc., there must be a precedent for electronic signatures. Thankfully, with reliable electronic signature software, organizations can establish a method that allows for signing virtually anywhere at any time. With faster signing, secure one-off signatures, and a rules-based electronic signing process, organizations can enjoy a method that works remotely or in-office to streamline eSignatures and approvals. Configured alerts, rules-based chains of approval, and fully electronic signature templates make for an automated process for your contract playbook that is easy to adopt and understand.
Optimize Your Contract Playbook Today!
A contract playbook is an under-utilized tool for enhanced contract management. When it is paired with contract management software, your organization is equipped with a procedure that is virtually self-explanatory, user-friendly, streamlined, cost-effective, and easy-to-adopt. The contract management software solution you need is CobbleStone’s Contract Insight®.
Contract Insight is CobbleStone Software’s acclaimed source-to-contract management platform. With Contract Insight, organizations can establish a plan that expedites contract lifecycles, reduces bottlenecks, saves time, controls costs, and keeps departments unified and on the same page.
Learn why organizations of many sizes within both the public and private sectors trust CobbleStone to help them develop a successful contract playbook. Schedule a free demo today!