Sale, transfer, license, service provision, partnership... Each project is framed by a contract. So it’s not uncommon for a company to generate dozens or even hundreds of contracts every month.
Not to mention, contracts are becoming increasingly complex. Regulations are constantly developing and companies are adding more and more clauses to protect themselves, limit the risks of litigation and comply with new laws. As a result, the number of contracts is booming and they are becoming longer - making it difficult to keep track.
Poor contract management can have serious consequences on a company's profitability. According to the IACCM (International Association for Contract and Commercial Management), poor contract management can reduce a company's annual turnover by 10%*.
This is where contract management comes in.
1️⃣ Saving time
· With the right tools, teams spend less time on low value-added tasks such as data entry or information retrieval.
· They have a catalog of contract templates, available in a few clicks, which they can then customize with ease for each project.
· It is no longer necessary to start from scratch with each new contract.
· Specific tools such as electronic signatures and automatic reminders make the process more seamless.
· With less time-consuming manual tasks, projects are launched and deals are closed more quickly.
2️⃣ Cost-effectiveness and contract risk mitigation
· Contract management provides greater visibility into performance and the proper execution of contract obligations. The risk of litigation for non-compliance with contractual obligations is drastically reduced.
· There are fewer costs associated with the manual process.
· The teams involved in the contract (legal, in particular) are freed from time-consuming tasks and have more space to anticipate contractual risks, as well as legal compliance issues.
· Legal teams are informed when each contract is expiring, which limits the risk of tacit renewals without reassessing the timeliness and relevance of the requirement.
3️⃣ Smooth contractual relations
· Relationships between contractors are simplified: smooth process, more productive exchanges, less back and forth by email.
· Each party conducts more efficient, more balanced and more productive negotiations, while respecting each other's interests.
· Internally, all the teams involved (legal, financial, commercial, etc.) communicate more easily and work together towards a common goal.