Contract Managers (CMs) bring financial value to a company by speeding along the contracting process and directly impacting the bottom line. Finding contractual options to decrease costs helps teams across a business: in procurement, facilities, manufacturing, engineering, sales and more. What’s more, CMs can keep an organization out of trouble by discovering and mitigating risks in contract terms.
However, for those outside the team, there are still many misunderstandings around the importance of contract managers and the value they provide an organization. Earlier this year, IACCM released a benchmark report highlighting the top challenges contract managers face in their profession. Below, I’ll detail five main challenges contract managers are experiencing, and discuss how contract lifecycle management technology can improve these processes.
Being involved early on
The most effective contracts involve the CM team at an early stage, but many contract managers aren’t brought in until later. With automated technology, contract managers can utilize contract templates to create agreements that take into account standard clauses. Then, contract managers can focus the general counsel on high priority contracts that require a more intense level attention. This reframes the contract management process to ensure CMs are involved earlier on in the business relationship cycle.
Improving internal processes and technologies
Digital transformation is not alone a silver bullet; businesses can’t bring in new technology like a contract management system and expect it to solve all their problems. A full, efficient transformation requires people, like contract managers, to spearhead and endorse changes to internal processes. Additionally, when adopting any new technology such as a management platform, consulting sessions should occur during important process changes to manage and oversee new workflows.
Managing workloads to reduce costs
At a large organization, contract managers can be responsible for 20,000 to 40,000 active contracts at any given time. Such an intense workload can make it difficult to stay on top of deadlines and renewal dates. That can easily spiral into costing the business hard-earned revenue. Not to mention these contracts have historically been managed on paper, with filing cabinets filled to capacity. Today, agreements are shared digitally—on a drive, in the cloud or on SharePoint portals – but these options still lack one common centralized repository.
To cope with a heavy workload, artificial-intelligence-equipped contract lifecycle management technology offers a single, intelligent repository for contracts. It allows managers to better manage the contracting process at any stage, from initial request to renewal to the end of its cycle—helping managers to keep on top of key dates and deadlines.
Overcoming an under-valued and misunderstood role
Twenty-seven percent of contract managers perceive their role to be misunderstood or undervalued. In order to demonstrate the value of their role, data analytics is essential. Tools like contract management solutions can offer meaningful insights into an organization’s wide spectrum of contracts.
For example, key terms and obligations within contracts can be filtered and queried within these tools to help unlock hidden risks. The use of a clause library allows for dynamic inclusion during contract generation. A single data repository allows contract managers to access and search data anywhere and anytime in a matter of seconds. These types of automation allow contract managers to take on more responsibility for different stages of the contracting cycle, leading to a faster contract turnaround, and ultimately more recognition of the importance of their role.
Understanding value at the executive level
It’s no secret that it takes energy, persuasion and effort to guide an organization into recognizing the importance of legal technology and corresponding legal teams. But addressing the above challenges helps promote positive attention to the role and efforts of contract managers—and executives will notice. What’s more, solving these common problems allow businesses to recapture a portion of any bottom-line revenue lost due to poor legacy contract management efforts.
How to face challenges with legal tech
IACCM’s research reveals this profession and subject area is starting to gain recognition, but it still lacks internal acknowledgment regarding the profession’s importance to a company’s success. When 32% of both buy- and sell-side contract managers identify improving internal processes as a major challenge in their profession, this is a signal of a need for change. Fortunately, a large part of the answer for many contract managers’ concerns and challenges point toward modern, effective contract management. Answer in hand, the next step is to take charge and start enacting that change.