As we all deal with the impacts to our global economy and supply chain, one thing that this pandemic is brought to light is the importance of having a Contract Management System as a primary component of your vendor management program. To mitigate risk and ensure compliance with your vendors, it is a necessity to have a contract management system to manage the full lifecycle of your agreements with these important stakeholders.
At the heart of effective contract management is having solid business processes and a contract management system, a technology platform which acts as a central repository for all of your contract documents and facilitates all of the critical activities required to author, execute and manage these important documents.
In a recent IACCM member survey ‘Impact of Coronavirus’, conducted April 7th – 10th, 2020, a total of 81% of those responding indicate that they either have or will now develop plans to implement, replace or add to contract automation. This reinforces the importance of having a contract management system especially in the current and post Covid-19 world.
Let’s begin with a brief description of each stage of the contract management lifecycle and then highlight some important functionality found in many contract management systems. Here are the key stages of the contact management lifecycle:
The contact lifecycle begins when an internal business owner initiates the contracting process after they have identified a business need and selected a vendor.
This is where the business owner begins to draft the contract document to pull together all clauses, terms and conditions they believe are required. They also identify the contract approvers and signing parties to be included in the contract.
Contract Negotiation and Approval
The draft contract is submitted to internal and external approvers and may go through a series of reviews and redlining with all required stakeholders until it is ready for execution.
The final contract document is sent to respective parties for signature either online using a contract management system or using manual process.
Contract Obligations and Performance
Monitor contractual obligations and service level agreements to ensure the vendor delivers on their contractual obligations, meets spending and budget limits along with adhering to all terms and conditions.
Contract Renewals & Closeout
Manage termination and renewal dates to ensure you can renew, negotiate, cancel and offboard vendors in a timely manner and on your desired terms.
As you can see from reviewing the above contract lifecycle stages, there is a great deal of work that goes into maintaining effective contract management with your vendors. That is why we work with our clients to help them develop requirements and implement the appropriate technology, a contract management system, to centralize and automate these activities.
One of our technology partners, Gatekeeper, offers full contract lifecycle management functionality. Some of the key features of the Gatekeeper system are:
Artificial Intelligence enables contract auto-creation and analysis to streamline the process of creating contract records in the system. Simply upload a PDF or scanned contract and the AI Extract™ engine will auto-extract all key metadata and clause language.
Trained on billions of relevant data points, AI Extract™ becomes more accurate by the day. The AI Train™ engine unleashes the power of machine learning to understand your unique use-case and data set.
The Kanban workflow engine digitizes important contracting processes. Transform complex, fragmented processes into centralized, visual Kanban workflow boards. Digitize any form-based process and break down complex workflows into visual phases.
A Microsoft WORD® based template and track changes solution to automate legal redlining using vendor-supplied contracts or your own.
Manage end-to-end simple and advanced eSignatures compliant with ESIGN, UETA and European eIDAS standards, fully integrated with contract records.
As you begin your contract management journey, need help assessing your existing contracting process and/or want assistance in procuring and implementing a new contract management system, here are the contract management services we provide. We are here to help!!