Pitfalls regarding Contract Management and their solutionby Chris Cornnel Digital Marketing Expert
Contracts are a major part of developing a business organization. The more an organization would receive contracts, the more will be the productivity and obviously as a result, a good amount of profit. So, handling such contracts is a complex process that is to be done simply and logically. Otherwise, it leads to the pitfall of that business which plays an important part in slowing down the contract processes which ultimately ruins the business.
The common pitfalls of contract mismanagement that a company or a business set up organizations experiences are listed as:
Disordered storage of contracts:
One of the major pitfalls of any business set up is disorganized contract storage. A manual system of contract management results in a condition of a hotchpotch of data. This leads to certain problems in keeping the contracts secure, organized, and accessible. This also creates an impossible position in keeping records of the version, dates as it is very time consuming and thus affecting the performance and control of the contract work. In this generation of evolving technology, a software tool plays an important part in retrieving necessary documents or other facilities in a very less amount of time.
Contract Function Inefficiency:
The inefficiency in maintaining contract workflow is also one of the major pitfalls of the contract management system. For example, a manual contract management system will require certain supervisors to look over each step of the contract cycle process, which will eventually give a hike in contract management cost. The contract lifecycle process also gets delayed due to this. Thus, it is better to use contract lifecycle management software (CLM software) which lowers the company cost, increases productivity, and helps the contract managers in reducing risks.
In a manual contract management system, the process of productivity or the work assigned is not at all flexible. Like if something goes wrong in the process, sometimes the process is to look from the very first end to troubleshoot the problem. But a system tool with an internet connection provides the platform to store all the data in a single cloud computing area and also determines the mistake or the problem that occurred with the help of certain technological inventions like Artificial Intelligence (AI) being implemented in the tool.
Tracking of Contracts:
Manually, it is very difficult for any parties to check on or track the performance of the ongoing contract. Though in small scale organizations, tracking the contracts can be done more easily, but as the company grows it is next to impossible task to keep on tracking the workflow of different sectors of the organization. Manual tracking can also lead to poor contract security, a decrease in financial goals, and also increases contract risks. With the help of automated tracking tools implemented in contract management software, the risk of contract security can be solved to a great extent. Also, tracking of multiple contracts can be done at a time simultaneously.
Manual or wet signatures:
The signing process is a very important thing in a contract-based business process. But, manual signature processes are very time-consuming due to a lack of physical communication between the persons. The document needs to be transferred to and fro a place by an agent which leads to a hike in office supplies, finance, and energy. Thus, e-signatures are very efficient as the document can be transferred to the required person via the internet and vice versa after the latter signed the document digitally. This process is done in seconds and thus reduces the unnecessary workloads of the organization.
Challenges in remote areas:
One of the major problems of the contract management system is the working process from a remote area. In a manual process, communication from a remote area seems very difficult as transferring information to the person from the contract manager or the team is very stressful and time and cost consuming. A contract management software tool provides a platform where the whole team gets together virtually through the internet and work without any obstacles in sending or receiving data to and from.
Thus, we can conclude that a manual process of managing a contract system needs to be obsolete as it is full of certain important limitations. Digital connectivity, like the use of CLM software tools, plays a pivotal part in establishing the contract-based business overcoming the pitfalls.
Created on Feb 7th 2021 16:42. Viewed 287 times.