According to the Global Contract Management Association IACCM, despite the fact that 80% of business activities include dealing with contracts, about 20% of all contracts are permanently missing. Contracts that are unaccounted for create substantial risks for the operations of the entire company, making it extremely important to invest in the centralized management of contracts.
So, efficient contract management is a vital part of the processes of a successful company.
Digital contract management refers to an information system that stores and manages a company’s contracts and other contract-related documents. The purpose of the system is to enhance the monitoring of a contract’s life cycle from contract negotiations to electronic signature. The system also provides information on the status and development of the contracts so that the company’s business operations are managed as efficiently as possible, not forgetting risk management.
Many organizations still draw up their contracts using Word or Excel files, wasting the full potential of the information they contain. Compared to systems designed for saving Word and Excel-based documents, digital contract management offers a wide range of benefits. For example, a digital contract management system provides templates designed for various contract types, ensuring a standardized format for all your future contracts.
Electronic contracts help simplify writing new contracts through the use of templates and help ensure that certain terms are defined and used consistently throughout the process and across clients and industries. Electronic contracts can also more easily be cited in other documents, and searched to look for specific terms or to find all the contracts for a given department or vendor.
Digital contract management also plays a key role in the development of business operations, particularly by improving the availability of contract information. The system ensures that all the contracts of the company can be found in the same place, which makes contract information conveniently available to all authorized employees. As a result, the contracts are no longer stuck behind the e-mail or computer passwords of specific individuals.
One of the biggest plusses of digital contract management is the ability to offer electronic signatures. If you have not looked for ways in which your organization can take advantage of electronic signatures, you are missing out. And yes, in the vast majority of cases, electronic signatures are just as valid as ink ones.
An electronic copy does not get lost or disappeared into a stack of paper on someone’s desk during the contract review process. People who do not respond can be reminded. And if they cannot find it in their mailbox or workflow, another copy can be sent.
For contracts that require multiple signatures, the various people can sign the documents asynchronously, rather than having a single paper copy that gets routed around. This saves time.
Systems such as Excel and Word do not enable users to monitor the implementation of negotiations and contracts. They do not allow you to automate the management of contract monitoring, things like the fulfillment of contractual obligations, renewal of contracts or the compliance of the contracting parties.
All types and sizes of companies benefit from electronic contract management. A digital contract management system can manage the contracts of small, medium-sized and large companies in a centralized manner, regardless of the contents and numbers of contracts and the type of industry.
As a trusted partner, Lex Process acts as an extension of your legal team, transforming the way you manage your contracts. Our managed process includes flexible staffing and the implementation of technologies that improve collaboration across your organization.
Whether it’s legal, financial, compliance, or business pressures that are driving your organization to seek outsourced support, Lex Process can help you with any or all of your contracting functions.