How to create contracts your business partners will love and use
It is little exaggeration that contracts are the lifeblood of most modern business organizations, and they often hold the key to getting business done efficiently and effectively.
At any given time, businesses of all sizes often have countless active contracts circulating among vendors, partners, and clients, with terms and obligations that need to be monitored and risk factors that need to be mitigated.
As crucially important as contracts are to most businesses, they are unfortunately too often taken for granted, especially in how such contracts are created, processed, and stored. In fact, most businesses may think they’re doing a good job managing their contracts, yet the truth is, they are not. Often businesses depend on outdated legacy contract management systems (CMS) that consist of little more than a loose collection of online folders, or, worse yet, a series of filing cabinets with dusty hard-copy agreements that are labelled ineffectively and are almost impossible to search.
In terms of actual utility, these “contract management” methods offer little more than an antiquated storage system that provides little opportunity to gather any useful information about a company’s contract portfolio and how it could be leveraged for better client service.
But what if it didn’t have to be like that? What if you could simply find a way to create better contracts, execute them more efficiently, and store them in a way that could allow you to access collected data that would give you a leg up with new clients or new contracts with existing clients?
Alleviating the pain points
The first step in assessing where your current CMS is falling down on the job is to identify—and then try to alleviate—the pain points your current system is causing.
For example, ask yourself how much of your contract workflow is managed through email or other communication methods outside your CMS? Any time these alternative communication methods are used it results in an end-around of the official protocols for your CMS, which then increases delays in responding and can lead to more inaccuracies and inconsistency. Unfortunately, these “end-arounds” become more commonplace if the system you are using isn’t easy to use by your colleagues or doesn’t fully have the buy-in needed to gain widespread acceptance.
Some of these problems, of course, may be beyond your control. For example, you could have the nice-to-have problem of getting too many requests from business clients. These demands to create new contracts, update the status of existing ones, or renew or revise older versions may be a beneficial increase in business, but not if your CMS can’t handle the workload.
Imagine instead of having these problems, you actually had a process that offered solutions. For example, some more advanced systems contain tech tools that allow users to access self-service portals for the more routine documents needed, such as standard sales contracts, non-disclosure agreements, or other common documents. These systems contain a database of contract templates that enable users to access a variety of contract forms that can easily be adapted to create and execute new contracts—or revise or rewrite existing ones—much more quickly than any system of online folders or metal filing cabinets would.
More importantly, these advanced contract management systems can offer users a way to access the data underlying all the contracts that run throughout the system. This way, users can gather the necessary analytics into an overview report that can be shared with business partners to convey how individual contracts are best being used or how individual clients are being served, all while keeping that underlying data proprietary.
Encouraging more stakeholder collaboration
As we’ve observed, many CMS can run aground on the shoals of poor buy-in or reluctance of partners to utilize what they see as an unwieldy or difficult-to-use system. Yet, there are ways to combat this wall of resistance and instead win over reluctant partners to become evangelizers of a new contract management system.
One way to do this is to ensure your CMS offers data-visualization enhancements that can improve the system’s ease of use and encourage more business stakeholder collaboration. For example, does your CMS have a dashboard panel that easily walks the user through the contract creation process? These dashboards can quickly and easily demonstrate to the user the various steps in the contracting process, from identifying which template would be best to use in drafting a new contract to quickly and accurately populating the document with the necessary new information so that users can generate a new contract that precisely fits the client’s request.
Does your CMS allow you to create multiple home pages within a site? This can be extremely valuable when managing complex, ongoing litigation or high-stakes M&A deals. Certain CMS allow you to create different home page structures based on a defined group, such as a practice group, a buyer, or a seller, while still allowing you to seek permissions that let you control access. For example, when managing deal rooms during a M&A transaction, you may want a different homepage views for the sellers and buyers. This type of tech tool within the larger CMS will allow for that to happen.
Beyond visuals that encourage collaboration, certain CMS allow for a great extent of data analysis and multi-sheet charting drilldowns. Again, the value of being able to analyze your CMS data, identify commonalities and trends in your contract work, and share that information with management or individual teams cannot be overstated. It’s really the difference between operating in a way that gives insight into how best to leverage key data for more informed decision making and operating in the dark.
Indeed, one of the best ways to get buy-in from users and partners—and to ensure the success of any new innovation—is to make sure they can readily understand the value proposition of these attributes and how they can make any new CMS one which they can easily and quickly embrace.
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