Businesses have been revolutionized with the usage of technology, and now have a direct link with the ‘life cycle’ of various management related functions. Traditional concepts of management within enterprises have been revisited and modified for enhanced efficiency in recent times.
A study performed on the optimization of revenues and savings found that technology driven management allow better decision making and mitigation of risks. One such avenue is contract life cycle management, and 65% of the reviewed companies reported that it had assisted in lessening exposure to financial and legal risk.
Stages of lifecycle and tech input
The contract lifecycle management involves a fluid process in which the structuring is reviewed and its provisions are enforced without a hassle or extra cost. The important thing to highlight here is that software allows efficiency in the performance of day to day business.
In routine, the stages of life cycle are extensive and include the following general aspects:
Contract Request, Authoring, Negotiation, Approval, Execution, Obligations Management, Contract Amendment, Reporting, Renewal and then back to square one.
Now these are extensive steps in terms of organizational functioning. Each step has its own ROI and importance. Software helps to bridge the gap between each step and work in an automated manner. The software works on an ‘information system’ platform – an intelligent model capable of making business decisions.
Contract management is based on the idea of removing cluttering in the management process. It cuts the contract cycle time by provisioning tools that speed up authorship. Secondly, approvals are dealt in a short period of time, removing the conventional need for a thorough legal review. Also, flexibility allows for a structured contract, which acquires revenue sooner and increases the business potential of an organization.
The International Association for Contract and Commercial Management (IACCM) published a survey regarding the usage of these tools within organization. IACCM reports that companies with a satisfactory contract management system had low costs and a higher ROI in the management functions. They also found that contract and legal management constituted more than half of functional areas necessary for decision-making.
The benefit of digital input in management life cycle has already been highlighted. Now, with input from technologies such as cloud computing, the available options are categorized as Software as a Service (SaaS). These are the recent solutions, depicting the evolution of technology within businesses.
Their working format is the same to what has been described above, but have the additional benefit of a reduced cost. SaaS services allow companies to pay less than what they would have to for standard software licensing.
SaaS also doesn’t require a large IT infrastructure for the company and allows a scalable solutions format. Its application can be seen in various areas of the lifecycle. For instance, the contract auditing and reporting is an important step, which needs a careful approach. Most companies proceed with an ad-hoc model, which is expensive in the longer run.
SaaS platforms allow for functions such as contract compliance alerts, audit tracking and real time report generation. When organizations are able to do their jobs ‘on the go’, savings are compounded.
The crux of the discussion provided above is that an effective management lifecycle within organizations makes way for larger profitability. Not only does it lowers the cost, it minimizes the risk. Companies incorporating such tools in their organization will achieve a competitive edge within the market.
About the Author:
Sara Stringer is a business professional who left the corporate world to strike out on her own. If you have employees, clients, freelancer agreements, etc., she recommends using flexible contract management software to save time and help ensure proper use.