The business landscape is constantly on the move. Companies today demand quick processes and quicker results. It holds true for contracts as well. Sending paper contracts or email chains back and forth is a thing of the past. In today’s market, traditional contract management methods are no longer an option for sales and procurement teams. Contract management software is the one-stop solution to deal with all the headaches related to the contracting process. It enables businesses to automate the entire lifecycle, from creation to execution, to expedite the signing of agreements.
What is contract management software?
Contract management software streamlines and automates every stage of the contract lifecycle, from creation and negotiation to execution, monitoring, and renewal. Thus, companies can effectively manage their contracts from within a single platform guaranteeing compliance and collaboration. It eliminates the need for manual and paper-based processes, making contract management more organized, accurate, and accessible.
Contract Creation: Contract management software comes with pre-approved templates and clauses to create standardized contracts. It reduces errors and ensures consistency in language and terms.
Negotiation: Multiple parties and stakeholders can collaborate on a single platform, making the negotiation process more efficient and transparent. For instance, contract redlining on Microsoft Word offers version tracking and commenting features.
Storage and Centralization: Businesses can store digital contracts in a centralized repository, making it easy to access and manage them from a single location. Users can search and retrieve contracts within seconds using metadata, clauses, or even keywords.
Automated Workflows: Contract management software enables users to automate approval workflows, ensuring that contracts go through the necessary review and approval processes without any hiccups.
Alerts and Notifications: Businesses can set automated reminders for crucial contract milestones, such as expiration and renewal dates, helping to prevent missed opportunities or obligations.
Contract Renewal and Expiry Management: Contract management software can automate notifications and actions related to contract renewals and expirations. Thus, organizations can stay on top of their obligations.
Performance Tracking: Contract management software enables tracking and measuring contract performance against key performance indicators (KPIs) like contact value, duration, efficiency, etc.
But despite the benefits, businesses shouldn’t overlook the security risks of storing digital contracts. Business agreements contain a wealth of confidential information about strategies, costs, suppliers, clients, and more. Contract security must unquestionably be a top concern for companies of all sizes and sectors. It starts with analyzing how we store and access our contracts and related data. Here are some security features necessary for a contract management solution.
End-to-end encryption
Contract data requires a high level of security and privacy. You can ensure all your sensitive information is always safe from prying hands by opting for contract management software with end-to-end encryption, from creation and sharing to storage and retrieval. Therefore, all data—both in transit and at rest—is encrypted. It prevents unauthorized personnel from accessing the data even when you’re collaborating with vendors, clients, or partners for the contracting process.
Permission control
Business agreement drafting, negotiation, and signing is a complex process that involves numerous reviewers and approvers. It is challenging to maintain data security when the contract lifecycle spans the entire organization. Companies must look for contract management solutions with role-based access control to establish security for data and processes. Authorities can then precisely outline roles and responsibilities for each stage of the contracting process. Thus, you get to decide who gets to access what at a granular level for contract workflows, dashboards, and reports.
Electronic signatures
These days, physical documents and wet signatures are an efficiency and security concern for businesses. Organizations can naturally centralize the entire contracting process, from drafting to signing, into a single platform by selecting contract management solutions with integrated e-signatures. Popular electronic signature programs such as Adobe Sign, DocuSign, and Sertifi all have their unique security features. They comply with regional, industry, and regulatory standards for increased signer identification and security.
Audit trail
Businesses must keep track of all activities when several parties and departments collaborate on the contracting process to ensure data integrity. An audit trail feature tracks and records all activities within the system. It includes changes made to contracts, user interactions, and access attempts. A comprehensive audit trail helps identify unauthorized actions and assists with compliance requirements. Thus, organizations can establish accountability in contract management, even with multiple stakeholders, by staying on top of who did what, when, and how.
Storage solution
Another compelling factor can be contract management solutions built on tried-and-true platforms with sophisticated data security infrastructure. For long-term contract storage, Microsoft Azure Cloud andSharePoint, for example, go beyond industry security standards in database and file encryption. The software should support multi-factor authentication (MFA) to add an extra layer of security beyond passwords. It could involve using something the user knows (password), something the user has (mobile token), and something the user is (fingerprint/retina scan).
Conclusion
While these features are critical, they are just a part of your broader security strategy. Therefore, before you take your pick for contract management solutions, assess the specific security requirements of your organization. The CMS must seamlessly integrate into your existing security framework to yield fruitful results. It’s also wise to involve your IT and security teams in the evaluation process to ensure the software meets your organization’s specific security requirements.
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