Contracts are complicated. From contract planning, negotiation and implementation to renewal, each phase has its own procedures. Companies want to ensure that contracts are written in a way that is compliant and accurate. Once a contract is signed, all parties involved want to ensure that the deliverables are being met according to expectations, and that related elements like compliance, invoicing and payments are being met according to the agreement.
Good contracts often lead to better long term relationships, fewer delays and issues, and higher value overall. More and more legal professionals (whether at a law firm or within a larger company) are interested in a system that allows them to have total oversight of the contract management process.
Contract management, also referred to as contract lifecycle management can solve a variety of issues for legal professionals. Using contract management software, legal teams can streamline the contract planning and scoping process, meet requirements and enable comparative analysis. As a result of this digital transformation, teams can better analyze contracts to ensure they are compliant, meet procurement policies and provide value.
A good contract management system offers end-to-end value throughout the contract creation process. Typically broken into phases, contract management process and technology should support:
Products, services, hiring, outsourcing — organizations have a vast number of relationships and agreements that require contracts. Buyers want to make sure that they request proposals that include all of the necessary elements. Sellers want to make sure they structure an offer that meets expectations while also being profitable for their organization.
For many companies, including government, financial and healthcare organizations with serious procurement and compliance requirements, it’s important to plan effectively. Since every contract is a series of many moving parts, from the length and scope of the contract to payment details to privacy requirements, it’s critical for the planning phase to be rigorous and accurate.
Contract management software in the pre-award phase is primarily focused on ensuring that planning and scoping are efficient, accurate and effective, and that all parties involved are communicating contract terms as seamlessly as possible. In the pre-award phase, contract management begins with:
Once all offers have been sent to the buyer, it’s time to evaluate and compare contracts, or go back and request changes. The award phase is more than a decision based on the best price. Terms, complexity, contingencies, timing: every element needs to be expertly analyzed to ensure that the best deal is selected.
When evaluating offers, buyers not only look at which contract delivers the best value, they also consider the potential costs and risks. What’s more, many contract analyses require the comparison of somewhat different solutions. For example, a contract for new software might require a buyer to compare the benefits and risks of selecting a cloud technology vs. on-premise technology. A contract to outsource labor might require the buyer to compare the added cost of hiring people in their own country to the lower cost, but time-change and logistical risks of hiring people in another country.
In this phase, contract management software can help to enable parties across the organization to participate in offer evaluation and negotiation. A portal enables people across legal, procurement, business teams and executives to access the important elements of every submitted offer to best understand what the different options are and where offers may need to be altered or improved. Contract management is vital to ensuring that this phase allows for controlled transparency.
Once a contract has been awarded, the contract management process focuses on ensuring that the terms of the contract are followed. Product delivery, timeline and invoicing is monitored to ensure delivery is on pace as agreed, compliant and effective. Contract management can also help mitigate risk, flagging delays, non-compliant activity or other issues.
As the end of a contract draws near, this analysis can help companies determine their next step: whether to renew, renegotiate or put a request out for new bids. Good contract management improves the likelihood that companies and their vendors have successful partnerships, and that the contract process is seamless.
Notarize can support companies in the award phase of the contract management process with our online notarization platform. Certified online notaries are available 24/7 to meet your notarization needs. Schedule a demo to learn more about how Notarize can help.