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Contract Management Challenges and Solutions

Contract management challenges and how you can use a contract management system to tackle them.

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Contract Management Challenges and Solutions

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  1. Contract Management Challenges How to tackle them?

  2. Contract Management Challenges

  3. Contract Management Challenges

  4. Contract Non-Compliance & Regulatory Compliance Issues • Companies are legally required to follow strict regulations and protocols ensure things like employee safety, environmental responsibility, data security, and financial honesty. • Contract managers are responsible for ensuring that they have accounted for all of these required compliance clauses in the contracts. These should account for terms respective to the country or state laws you are operating in. • The solution that we recommend for this is adopting a contract management system. With a contract management solution, you can ensure that every time you draft a contract these clauses are added to them. • Most automatic solutions are equipped with features such creating contract templates and clause libraries for faster and efficient drafting of contract documents.

  5. Standardization and Centralization of Contracts • For companies that deal with adhoc contract drafting processes, one of the main challenges to overcome is that of the propagation of contract clauses and contract templates in circulation all around organization. • Standardization of contracts involves the standardization of packages offered to customers. • There are several benefits in standardizing contract language like cost-saving, increased productivity, and more. • By using a contract management tool companies can cut down on time spent on drafting and reviewing contracts, and teams can spend more time on making strategic initiatives.

  6. Managing Supply Chains • Supply chains are the most important part of a company. The relationship between company and supplier is defined by the contracts between them. • When the amount of the supply chain increases globally, the need for better contract management between these supply chains will also become necessary. • A major challenge that can come up is fluctuating prices for raw materials involved in manufacturing. This means that cost of doing business can fluctuate roughly based on the current circumstances and factors which will not be in your control. • The solution that any experienced professional would recommend for the above scenario is to enter into a well-drafted contractual agreement for your supply chains. • The contract drafting features of a contract management solution will enable drafting up a solid contract for the company’s supply chains and manage them throughout their lifetime efficiently.

  7. Contract Management: Expiry/Renewal, Turnaround Time, Extracting Key Data • Contracts can be a little tricky sometimes. Contract managers need to be very vigilant about the expiry or renewals of contracts in the organization. • A missed expiry or renewal date could result in many problematic situations like not being able to bill for work done on a contract or paying for the renewal of a tool you don't use. • What contract management tools do to tackle this solution is creating automatic notifications or alerts that are sent out to stakeholders. • Contracts could get delayed in the process, which is a very common mistake for companies. What contract management systems offer in this situation are tools to speed up contracts and data to help identify any possible bottlenecks.

  8. Inefficient CLM Solutions or Tools • Last but not least, a major challenge facing companies is inefficient contract life cycle management tools. • The truth is, most contract managers are still using conventional methods like Excel spreadsheets, email, and paper to manage their contracts. • For companies that deal with more than 20 contracts a month, a contract management solution could become the factor that boosts its business. • Choosing a contract management solution could prove to be a great improvement for any growing organization.

  9. Conclusion • Contract management has never been an easy job. It has its risks and potential threats that affect the smooth running of businesses. • With the right contract management tools and a well-planned strategy, you can achieve the best out of a contract management. • And when choosing a contract management system, you should know what features you should have in the solution. • Because packed with features could also become an inconvenience.

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