The world of contracts is growing increasingly complex: Multiple contracting parties, recurring amendments, compliance with legal regulations and agreed obligations, deadlines and time frames all pose major challenges. At the same time, decision-makers are under rising pressure to respond flexibly and promptly, while still maintaining an overview. Inefficient contract management harbours risks that range from disparate information availability among the parties involved and documents that are not kept current, to a lack of transparency in approval and release processes, to violations of laws or contractual obligations and failure to meet deadlines. Such errors in the contract life cycle come at a high cost. Sometimes at a very high cost considering that, according to a publication in the Harvard Business Review, they can add up to between five and 40 per cent of the contract value.
To find the way out of the contract jungle, businesses need a well functioning process organization across departmental and company boundaries as well as the tools to support it.
Must-have: Smart contract management, digitally in the cloud
Cloud-based, process-driven contract management solutions, so-called smart contracts, are the most secure and efficient way to organize and manage contracts across companies. “Smart contracts” cover the entire digital contract life cycle from creation, conclusion, fulfillment, and control to tamper-proof contract archiving.
Alongside the many advantages that a cloud has to offer, including centralized and secure storage of all documents and records, permanent access for all authorized users from any device, and traceability and tamper-proofing at all times, cloud-based contract management software such as Fabasoft Contracts offers additional features that deliver significant increases in efficiency.
Valid contracts thanks to automated, digital processes
One key function of smart contract management is that it can generate contracts automatically using a wide range of contract templates, text modules, and clauses, all of which are available company wide. Any amendments that are made are automatically incorporated into all future contracts. This means that even staff from functional departments who do not have in-depth legal knowledge can draft contracts that are legally compliant. Integrating the software into existing ERP (SAP) and CRM systems ensures that relevant information about customers, suppliers, and business partners is imported and updated accurately.
In addition, the contract creation process is streamlined thanks to automated coordination, review, and approval processes between authorized partners. Even the signing of contracts is legally secure, automated, and occurs without media discontinuity by means of electronic or digital signatures. Because of automatic versioning, all parties to the contract not only have access to the most current contract documents, but can also trace the entire history of the contract at all times. This tamper-proof documentation and archiving in the cloud ensures that all compliance requirements are met.
Greater transparency using reminders, dashboards, and automated reports
A further core feature of a cloud-based contract management solution is automated deadline management, including a reminder feature. Obligations, terms, deadlines, and the like are stored in the contract metadata. Fabasoft Contracts includes a personal calendar that can be integrated into Outlook. Automated e-mail notifications remind the contracting parties of their agreed obligations. Moreover, users can also set automatic follow-ups so that they never miss a deadline or an appointment.
Customized dashboards, which are automatically updated, present a compact overview of the entire company-wide contract portfolio for all authorized users. This is supplemented by various options for analysis: Apart from standard analyses, a wide range of filtering, sorting, grouping, and analysis options for contract data can be used to create additional reports in no time at all.
These essential features of cloud-based contract management software are not only easy to use, they also boost efficiency and transparency.
Digital contract management – your competitive advantage
Contracts have a direct impact on business success. Using a cloud-based, process-driven contract management solution effectively combines the advantages of a cloud with the benefits of modern and intelligent contract management software. Automated processes and the integrated reminder feature not only accelerate and simplify every phase of the digital contract life cycle, they also help to mitigate risk and thus lower costs. Implementing Fabasoft Contracts can be done easily at any time without much preparation – just a clear decision for state-of-the-art digital contract management. Smart contracts are the best way for businesses to get out of the contract jungle and increase efficiency and competitiveness. We just have to decide to do it.