As technology evolves and organizations shift to adapt, business process changes should increase productivity rather than hamper it. Contract managers who primarily utilize manual methods with their team may encounter difficulties in efficiently managing contracts. Contract mismanagement can decrease productivity, hinder communication regarding task responsibility, and increase avoidable inefficiencies. As contract administration changes for the future, organizations can attain greater control over their contract management processes by avoiding the following pitfalls of contract mismanagement.
Pitfall #1 - Disorganized Contract Storage
Relying on a manual system for storing contracts, which may include filing cabinets and disorganized digital processes, proves difficult in keeping contracts secure, organized, and accessible. Manual contract storage systems can make it nearly impossible to maintain version control, track key dates and milestones, and enforce contract security preferences. Storing contracts without a secure contract repository can increase contract risk, weaken contract performance, and reduce overall control. Additionally, retrieving documents in a manual system can prove to be a time-consuming challenge without the help of a quick search tool. Learn more about contract storage in this article.
Pitfall #2 - Inefficient Contract Workflow
Unlike contract management processes leveraging advanced contract management artificial intelligence (AI), manual, low-cost contract management processes require contract managers to superintend each stage of the contract lifecycle. Discrepancies along the way that most likely could have been avoided with the help of technology, delay contract lifecycle processes until they can be resolved. However, leading contract lifecycle management software can reduce contract management costs, increase productivity, and help contract managers mitigate risk.
Moreover, intelligent automated contract workflow can transform contract management with user-defined fields, reporting and analytics tools, audit trails, process management, and more. Trading inefficient contracting processes for intelligent contract workflow enables contract managers to remain abreast of their contract lifecycles with key date and milestone notifications, audit trail history, contract tracking, improved negotiations, and much more.
Pitfall #3 - Lack of Approved Contract & Clause Templates
Unlike the use of user-friendly contract management software with pre-approved standard contract templates for contract writing, reliance on manual contract writing processes can require contract managers to create new contracts from scratch. This laborious process may include downloading various templates, manually inputting a plethora of data, and finding relevant information. When templates are not stored in a dynamic clause library, drafting new contracts and renewing contracts can prove difficult for contract managers. This form of drafting can lead to compliance issues because clauses, templates, and approved language are obsolete or incongruous with contractual standards. Learn more about contract clauses in this article.
Pitfall #4 - Manually Tracking Contracts
Contract tracking methods may vary, based on contract volume and complexity. While manually tracking contracts may temporarily prove adequate for a smaller organization, this method becomes ineffectual as the organization grows. Manual contract tracking can hinder an organization’s financial goals, weaken contract security, and increase contract risk. Systems relying upon MS Word documents and spreadsheets can impede efficient contract lifecycle management because these programs are not designed for contract management. Spreadsheets and documents lack the intelligence provided by AI-based contract management that can alert contract administrators of risk variables, vague contractual or “fuzzy” language, upcoming contract renewals, increased opportunities, and more. Without automated tracking tools, managing contracts can be unnecessarily cumbersome and stressful.
Pitfall #5 - Wet Signatures
Manually signing contracts can delay processes, as contract managers must wait on the cooperation of involved stakeholders. Attaining wet signatures drastically slows contract managers and other parties who need hundreds or thousands of contracts to be signed by various people in various locations. This paper-based system wastes office supplies, postage, energy, time, and money. Meanwhile, electronic signatures and digital signatures can allow contracts to be sent and signed in virtually minutes. E-Signatures can also empower contract managers and their teams to work better remotely, to obtain necessary signatures by signing from practically any device with an internet connection. Read more about the differences between electronic signatures and digital signatures in this article.
Pitfall #6 - Remote Work Challenges
Overall, these contract management pitfalls can create a recipe for extreme difficulty when working remotely. Contract managers attempting to manually store, draft, track, and sign contracts while relaying all the information to their teams working outside of an office could be tremendously stressful. While it may be possible to work remotely with manual processes, a contract management software solution with full contract lifecycle management would be a more viable alternative in the long run. User-friendly contract management software can make contract managers’ and their teams’ work-life much more productive by providing a reliable system that can make pre-award to post-award contract management a breeze through improved collaboration, negotiations, approvals, and contract automation.
Avoid These Pitfalls with Leading Contract Management Software
Now that you know how to steer clear of contract mismanagement pitfalls - rather than inadvertently mismanaging contracts - it's time to switch to contract management software. CobbleStone Software has been trusted by thousands of users from a wide array of industries for over 20 years. Discover how you can leverage CobbleStone’s Contract Insight® to take control of your contracts and drive value through effective contract management.
To learn more, watch the Contract Insight overview video below and schedule a free demo today!