To fully optimize your contract management system and experience real performance improvement, it requires three well-designed elements: processes, workflows, and technology. In combination, these elements organize contract management tasks and enable teams to use centrally-located contracts, templates, and standard clauses efficiently. An optimized contract management system improves coordination, collaboration, and communication among team members.
As discussed in the earlier posts in this series, once you’ve digitized and centralized your contract portfolio, and standardized your contract content into pre-approved templates and clause libraries to boost efficiency and improve ROI, you’ve completed the prep work necessary to optimize your contract management system for serious performance improvement.
Optimization, the final building block in creating a high-performance contract management system, requires three well-designed elements: processes, workflows, and technology. In combination, these elements organize contract management tasks and enable teams to use centrally-located contracts, templates, and standard clauses efficiently. An optimized contract management system improves coordination, collaboration, and communication among team members.
Processes and Workflows: Working Seamlessly Together
What’s the difference between processes and workflows, and how should they work together?
- Processes lay out the group of activities or tasks to be performed over a span of time to accomplish an objective. A process typically includes a defined start and finish.
- Workflows, on the other hand, describe the movement of these tasks and activities through the entire process, such as how the tasks are structured, related, ordered, synchronized, and tracked, and who performs them.
The more comprehensive the process and the more streamlined the workflow, the better they work together to create an effective contract management system.
Designing processes and workflows
When designing processes and workflows, it is important to identify all the tasks necessary to meet the objectives as well as define who, what, when, where, and how the work should be completed. Taking this approach removes the guesswork, eliminates wasted time, and reduces mistakes that can increase risk.
To optimize your contract management system, carefully examine and deconstruct your current processes and workflows. Then, identify and eliminate unnecessary steps, obstacles, and activities that waste time or resources.
Below are some basic steps to consider when designing your processes and workflows to seamlessly work together for optimal results. You can find a more detailed checklist in our eBook, 3 Building Blocks for Cultivating a High-Performance Contract Management System.
STEP 1. Document Your Current State
Break down the contract lifecycle into stages and activities. Document the who, what, where, when, and how for each stage and activity.
- What type of contract is being created?
- Who is involved in requesting, creating, negotiating, approving, and executing the contract?
- How is the contract created?
- How are the contractual obligations tracked?
- When is the contract created?
- Where is the contract created, negotiated, executed?
- After execution, where is the contract sent and stored?
STEP 2. Analyze and Identify Improvements
Review the current state, looking for obstacles that cause challenges and opportunities for improvement. This may include the number of people that need to be involved in a process, the flow of information between those people, and the decision making and approval processes.
- Do business rules require the involvement of certain people or specific approvals? Can the rules be modified?
- Can stakeholders who are involved in day-to-day contracting activities be empowered to make decisions?
- What is the purpose of each step and person involved? Is the step necessary? Do the people add value to the process?
STEP 3. Design and Document Enhancements
After identifying obstacles and opportunities for improvement, map your new processes and workflow in detail. Always get input from all stakeholders, and whenever possible, reduce the number of steps and the number of people involved in the process. When designing processes and instructional guidelines, be sure they are simple to understand and use.
Detailed processes, streamlined workflows, centralized contracts, standardized clauses, and contract templates all play a role in efficient contract management. However, to generate the kind of productivity benefits that drive performance results across the organization, automation must be part of your strategy.
Automation Amplifies Performance Improvements
Streamlined workflows, even when deployed manually, create efficiency. However, using technology to automate that workflow amplifies efficiency across your ecosystem of processes and people, improving performance throughout your contract lifecycle. Creating a functional digital workflow using advanced technology enables an organization to:
- Automate administrative and other simple tasks, allowing team members to perform strategic activities,
- Speed the content creation and approval processes,
- Synchronize data between departments to increase visibility across the contract lifecycle, and
- Proactively track and manage performance requirements and facilitate service levels with speed and precision.
Beyond these day-to-day benefits, using technology to drive contract management process provides powerful insight to organizations into the outcomes of their business. From real-time reporting to digital audit trails, the data captured throughout your contract management process can help reduce errors, improve financial performance, and enhance relationships with clients and suppliers.
Choosing a Contract Management Technology Platform
When evaluating contract management platforms, research is important. It is helpful to become knowledgeable about the options before you begin to centralize and analyze your contracts. However, modernizing your contract management system shouldn’t start with the purchase of a software application. Placing the cart before the horse often results in trying to fit your requirements to the tool, rather than the tool accommodating your needs.
Instead, first focus on identifying and locating your contracts to determine the volume of data, the elements you want to track, and your specific process requirements. Then, you will have the specifications you need to find the right tool for your environment and goals. Here are a few important platform features to consider:
- Intuitive, user-friendly interface
- Web/cloud-based for anywhere/anytime secure access
- Central repository to store and access all contracts
- Folder and tagging functionality to organize contracts
- Deadline tracking with email and text alerts
- Summary sheet of key contract terms for easy reference
- Customizable workflows and reporting functionalities
- Role-based access to contracts
- Creation, negotiation, version control, and execution of new contracts without leaving the platform or with easy integration back into the platform
- Template creation
Digital contract management platforms give an organization full visibility and accessibility into its day-to-day contractual operations–providing accurate data at the moment it is needed. As a result, team members can act more quickly and make smarter decisions, which ultimately empower them and the organization to accomplish their goals.
Designing an optimal contract management process includes selecting a software platform with the right blend of features and functionality for your needs. Your technology solution should offer secure cloud storage for contract data, robust and customizable data entry and notifications, and advanced searching and reporting. Look for a balance of configuration options and ease of use, and ensure that it is designed to handle all the contract management functions needed by your organization.
Take the next step
Whether you are creating a contract management process for a new endeavor or rethinking your current system, building the right foundation and constructing a strategic, efficient process will deliver long-term benefits across your organization.
Download our complimentary eBook, 3 Building Blocks for Cultivating a High-Performance Contract Management System, to learn how streamlining and simplifying your contract management process can help you stay ahead of deadlines, proactively meet performance standards and contractual requirements, and use contract data to generate value across your enterprise.
