June 26, 2020

Why has contract management become such a strategic topic for companies?

Making the contracting process efficient has become essential to increase productivity and control legal and financial risks for companies. Tomorro helps you decipher this sometimes misunderstood but essential subject. Follow the guide!

Legal Ops

Correctly managing contracts has become essential to optimize the profitability of a company but also to protect it from legal and financial risks. Tomorro helps you to understand this often misunderstood but important subject, especially when the volume of contracts signed becomes significant. Check out the guide below.

What is contract management?

Contract management streamlines the management of a contract from inception through negotiation, signing and storage to execution. Once relegated to the background by companies, businesses are gradually beginning to recruit contract managers and equip themselves with contract management software to gain efficiency and control legal and financial risks.

Cycle de vie du contract management

Schéma contract lifecycle management - comarch

Contract manager: a new profession

IACCM research shows that companies lose an average of 9.2% of their revenue each year due to poor contract management. In response to this knowledge, some companies are beginning to review their processes to limit risks and identify opportunities that can reduce costs at all stages of the contract lifecycle. In recent years, contract managers with legal, financial and commercial skills have emerged to deal with all aspects of the contract, but these positions are currently limited to large groups or certain sectors such as construction, where the value of a contract can be evidently very high. For the majority of companies, technology remains a much more profitable solution.

The rise of digital solutions

Digital contract management solutions enable all stages of the contractual lifecycle to be managed from a single interface; thanks to functionality such as creation assistance, collaboration, electronic signature and automated reminders. As a result, sales cycles are accelerated, the human cost of time spent on a contract is reduced, and the monitoring of contract deadlines is automated, allowing the optimization of supplier contracts for example. The impact on cash flow is real.

Who are contract management solutions for?

Historically, contract management software was mainly used by the legal departments of large organizations. However, in recent years, solutions such as Tomorro have democratized access to these tools as technology has evolved and the needs of companies have pushed software publishers to develop simpler and more affordable solutions.

This means that every company that negotiates and manages contracts can do so with ease and greater confidence. Today, modern solutions offer access not only to the legal department but also to everyone in the company, enabling them to create requests or access contracts for example.

Tips for choosing a contract management solution

Want to get started? Here are the essential features of a simple and effective contract management solution (or CLM).

1. Creation

Contract templates are saved on the platform to empower operational teams and ensure that the contracts used are compliant (and up-to-date).

  • Predefined contract templates are generated based on criteria entered by operational staff: type, country, amount, etc.
  • Data available in the company's CRM is injected into the template
  • Missing data is to be filled in by the contracting party

2. Validation procedures

Automated validation procedures allow all those involved in the creation and negotiation of the contract to intervene at the right time, with the information available quickly to make decisions.

  • Validation scenarios are defined according to the characteristics of the contract (amount, department making the request, type of contract, etc.)
  • A summary of the important elements to be validated is accessible for the decision-maker
  • Email reminders are automated

3. Negotiation

Negotiation is done online on a shared document, allowing several people to work together and to easily follow the history of modifications

  • The negotiation of the contract is managed directly on a shared collaborative document
  • Each new version of the contract is compared to the previous one
  • The history of modifications is reliable and readable

4. Signing

Signing is done directly online, without having to leave the platform.

  • The signing process is integrated into the solution
  • The order of signatories is defined in advance, with automatic reminders
  • Delegations of authority are managed in the solution

5. Storage

Contracts and their metadata are stored in a single location to facilitate access to information and secure sensitive company data

  • Permission levels are pre-established to manage access
  • Contracts are stored in the company's CRM using an integration
  • History of old contracts can be imported into the platform at once

6. Tracking

Tracking of contracts in application is simplified and automated

  • Metadata is recorded, enabling searches of stored contract content, including clause retrieval
  • Automatic reminders of contract deadlines are provided
  • Reminders are recorded in your diary using an integration

7. Analysis

Contract data is available in the form of reports

  • Reports on contracts are available (types of contracts, volume, negotiated amounts etc.)
  • Reports on operational efficiency throughout the life cycle are available (review times, signature times, blocking clauses etc.)
  • Export of your data is easily done in case of an audit for example

Want to learn more about how Tomorro's intuitive platform can support you tackle the complex challenge of contract management? Get in touch here. We'd love to chat.

Ready to take control of your contract management?

The Tomorro team