Contract data management is the online administration of contracts across all processes, enterprises, and systems. It empowers in-house enterprise teams to automate their contract management procedures efficiently and continuously to obtain business insights from their contracts, even when they are terminated or fulfilled.
Efficient contract data management provides your workforce with a powerful data administration basis by following all contract-related data facts and making that data searchable and available. In addition, contract data management can help you extract data on what’s in your agreements, such as contract value and renewal dates. It can also specify the time spent on each agreement and the expense by scraping data on how a contract is prepared and processed.
Four Reasons Contract Data Management is Crucial for Your Company
1. Ensure Data is Secure and Organized to Reduce Threats
Contract data management tracks the legal path to reduce threats at all costs. Moreover, the substantive information gathered through contract data management facilitates legal teams to move ahead of contractual threats and responsibilities. And some prevalent examples of substantive data contain the following:
- Type of legal entity
- Contract Length
- Specific contract dollar amounts
- Contract Duration
- Renewal obligations
- Contract Author
In addition, once substantive information is gathered, a contract data management system will allow you to cooperate immediately by directing remarks and recommendations to specific people. This way, people can be looped in as required without waiting for extra permission or approvals. Any modifications can be noticed simultaneously, whether the cooperation occurs with trade partners in procurement, finance, operations, marketing, or HR.
2. Operationalizing System Process Information
Operational information related to procedures assists your corporate teams in examining the time and expenditures it takes to process agreements. Furthermore, they utilize that information to build the most efficient operational processes to handle a contract through its different lifecycle phases. The following are some examples of data processing throughout the contract process:
- The expense to complete an agreement from primary request to final execution
- Time to draft a contract from the initial proposal to the final signature
- Turnaround period at every phase of the contract management procedure
- Number of workflows started and finished by specific units
- The average reply time for each accountable person
- Average time from contract initiation to sign-off.
3. Improving Earnings With Automated Flags
Contract data management is essential to improving business earnings. An effective contract data management system highlights items in agreements that are up for renewal or include predefined prerequisites. Moreover, automating the complete contract data management procedure allows you to determine potentially risky provisions quickly. Also, it restricts using unapproved or obsolete templates that may open the company to liability. These automated contract data management flags let you concentrate less on paperwork and more on legal work.
4. Effective Contract Metadata
Ultimately, collecting metadata and agreement specifics will make it effortless to answer the following typical questions:
- What portion of contracts comprises a specific provision?
- What share of contracts is affected by new rules?
- Which contracts have an IP license?
- Which contracts carry the most extended amount of time to finish?
- How many contracts are presently under review?
- How many agreements are up for renewal in the next week or month?
Controlling and organizing contract information assist your team in protecting their companies, reducing expenses, and providing essential insights by analyzing and utilizing metadata effectively. For instance, if contract information shows that specific contracts require a long time to complete, your team can operate strategically by prioritizing group recommendations to allow for that additional time. On the other hand, you can assess the contract to locate problem areas that can be streamlined or automated.
In the procedure, your workforce can free themselves from job-intensive paperwork that can effortlessly get automated. In addition, the contract data management system continuously gathers and tracks metadata on every contract, whether NDA (non-disclosure agreement), BPA (Bond Purchase Agreement), MSA (Master Service Agreement), or an influencer contract. The collection procedure continues from the preliminary contract proposal to creation, archiving, or signature sign-off.
Understanding the Benefits of Contract Data Management
Contract data management moves beyond a straightforward repository database to archive agreements. In addition, a digital contracting medium can facilitate and automate every aspect of the contract management function, creating the type of agreement data your business team demands. Moreover, an efficient contract data management system comprises intelligent automated data accumulation throughout the entire contracting procedure. It allows your workforce to
- Deliver self-serve contract administration for enterprise users in any division
- Utilize data to improve the rate of collaboration, contracting, and negotiation
- Empower contract administration to become a basis of continued earnings
- Centralize the agreement repository and make it readily available and explorable
- Implement contract workflows to automate proposals
Contract data governance is valuable when it works from a single medium and functions seamlessly without depending on numerous independent systems or fixed storage libraries.
What Data Should You be Tracking?
Your business contracts comprise a variety of valuable data. And when it comes to contract data administration, you must ensure that you always track the following data:
- Client and vendor contact details
- Line item deliverables like services and products
- Deliverable dates
- Pricing and fee/pricing schedules
- Specific provisions
- Penalties and fees
- Expiration dates
- Additional expenses incurred
- Changes to the original agreement, such as modifications and addendums
- Supporting documents (intake forms, SOWs, NDAs, etc.)
In simpler terms, you must track all dates, numbers, names, addresses, and detailed provisions in each agreement. That data can be registered, analyzed, or accessed to deliver more functional and long-term insights to assist you in better operating your business. Then, with time, you can leverage that information to establish standards and KPIs (Key Performance Indicators) to optimize the execution of your agreements and contracting processes.
Conclusion
Contract data management streamlines key contract information and makes it readily available. Rather than taking hours to filter through physical records, with an online system, you can quickly track and recover the necessary data in seconds. Moreover, you do not have to wait for physical agreements to be registered, and the required data is available as soon as it’s completed and documented in the database.
If you are interested in making it easy to search through your contracts, LawInsider’s contract repository makes it easy for you to upload your documents and find the hidden contracts among them. From 100 to 100,000 contracts, there are no limits and no hidden fees for the amount of documents that you can organize. With secure access and encryption for all files, you can be sure that your contracts stay safe and private.
References:
- https://ironcladapp.com/journal/contract-data/contract-data-management/#:~:text=Contract%20data%20management%20is%20the,even%20when%20they%20are%20archived.
- https://www.contractlogix.com/contract-management/contract-data-management-system/
- https://www.knowable.com/contract-data-management/
- https://www.jaggaer.com/blog/what-is-contract-management/
- https://juro.com/learn/contract-data
Tags: Contract Management, Contract