Today, there is a rising need for corporations to implement rigorous legal contract management doctrines, especially contracts with third parties, to make sure that legal and regulatory requirements are carried out efficiently within the scope and constraints of the agreement.
The ‘sign and forget’ attitude is a growing trend in today’s firms due to which many corporations’ are facing corruption and their bottom line is being severely affected.
Signed paper copies of contracts that detail clauses, commitments, and obligations are required to be stored and preserved. The management of a contract needs to happen over its complete life cycle, which is creating, negotiating, storing, scheduling contractual events, enforcing and terminating or renewing the contract.
Until now the process has been physical and painstaking, with large margins for error. Due to this companies have begun using software solutions which have enabled them to handle data and resource planning systems. Software solutions also help to convert ‘rudimentary’ contracts into foundations for revenue and at the same time reduce corporate risks and costs.
Coordinating Contracts within the Enterprise
For companies that are running two or more internal subunits which are further negotiating with another company and its subunits and all these sub-units are at a different location or maybe even in different countries, then communication is a very important aspect of the efficient functioning of the contracts that they hold with each other.
Due to a lack of communication between the sub-units of the same company collaborating with another company, will lead to incorrect decision making due to the deficiency of sharing information with each other. The incorrect decisions will then have dire consequences for each of the corporations directly or indirectly.
Dolphin Software states that individualist relations of sales and supplies lead to increased risks and costs. Also, an informational vacuum in state and federal agencies is unforgivable.
Milestone and other Metric Monitoring
Development of trust in lieu of permitting automatic renewals between two corporations will lead to positive transfers, and it is the most sincere principal that a sales team can hope for. Either renewal can ensue, if a corporation terminates a contract or if its partners have a need to manage their service to existing customers.
According to Garner Group amazingly 60% of supplier contracts are renewed automatically without the buyer even knowing because the buyers never gave the notice of termination.
Corporate Compliance and Governance
Managing contracts till the end of their term is good business ethics and legally necessary for all enterprises. Information revealed to stakeholders by the Chief Finance Officer must be accurate and to do this the officer requires to be well informed with contracts of the enterprise.
Also, state and federal regulations entail public companies to provide information regarding processes and mechanisms that manage the information.
Sponsoring Contract Management
For corporate management to be competently supported, executives and directors need to sponsor its application process for important aspects like strategy, regulatory and legal compliance and bottom line foundations.
Traditional methods are no longer enough to deal with the process of a corporation. Contracts now need to be attentively monitored with software systems that can assimilate the information, CRM, ERP legacy systems and the financial systems that are present in the enterprise.