BEST PRACTICES FOR REDUCING TIME IN MONITORING AND MANAGING CONTRACTS

Time is money and hence, businesses need to make efficient use of time by focussing on their main areas of practice. It is essential for businesses to account for the time their resources cater to the various stages of the process of contract management. Businesses have been constantly grappling with the challenge of reducing risk and cost while remaining compliant to the various contractual and legal requirements.

This article explores the best practices which leads to organizations spending lesser time in monitoring and managing contracts while focussing on the important aspects of business.

Analyse the existing processes

The first thing to do to improve efficiency is to understand the present situation and understand the various lacunae, opportunities and challenges. This exercise enables one to identify where to invest time, efforts and resources and eliminate inessential work. Now, by establishing KPIs for monitoring the contracts management process, relevant teams will be able to leverage the existing opportunities and implement necessary improvement measures to reduce risk while spending lesser time for managing contracts.

Collaboration across various departments

In the context of managing contracts, it is historically seen as the responsibility of the legal department and the general practice is to abdicate the issues to the legal department. Nevertheless, there is a significant role played by the concerned departments in the formation of contract since, it is imperative to take the technical aspects into consideration while drafting a contract. Moreover, it is those concerned departments who manage the contract in terms of performance and delivery. Hence, having a software for contracts management makes it easier for various teams to collaborate and share responsibilities wherein there can be roles assigned with access controls. This enables the legal department to manage the process with constant control and monitoring.

Pre-approved and up-to-date templates

When different departments and participants draft their own contracts, there is ample scope for inconsistency across the organization. This takes place due to lack of collaboration between the legal department and other departments due to factors such as slow response time. In order to establish consistency and collaboration, it is necessary to contain templates pre-approved by the legal department which enables relevant users across the organization to generate contract document and also saves time for review by the legal department. Further, the legal team can improve this method by installing benchmarks to maintain compliance and work effectively across various departments in the organization.

Leveraging technology

With the advancement in technology, companies should leverage suitable solutions which enable the improvement of existing opportunities while reducing risks. Users can deploy solutions that automate work which reduces errors and saves time and also standardize documentation across the organization. Once the requirements are identified preferences can be determined to automate the detection of risk which significantly reduces the time required to review contracts. Features such as optical character recognition, auto tagging enable converting contents into searchable text and scanning documents. Extracted information can then be used to generate reports, alerts and so on.

By deploying appropriate technological tools, companies can prevent inefficiency amongst various teams and also empower the in-house legal departments to avoid losing time and focus on the issue. Moreover, through collaboration, and planning in advance companies can standardize and streamline their process of contracts management in order to contain a more strategic approach in their operations.