No matter what type of business you run or how many employees you hire, chances are you’ve managed the lifecycle of at least a few contracts through your business.
Contracts can be between clients, vendors, or even your own staff, and the way these contracts are managed vary greatly between organizations.
Traditional methods of contract management were paper-based and required a lot of manual processes to get them organized.
However, the latest trends in contract management show a complete shift from this in order to gain back some efficiency and time usually wasted on these processes.
As we begin to rely more on having information available at our fingertips and with as little input or time spent as possible, the world of contract management is going through a major shift.
Here are the latest trends we’re seeing in the world of contract management and what they can do for your business.
In the past, managing a contract was usually done by the person who initiated the deal and nobody else, which ended up costing time and resources that just weren’t available.
The employees responsible would negotiate terms and conditions coming back and forth, meeting with other managers and directors to get the okay on everything, asking for legal advice, and generally involving far more people than necessary.
While this might have gotten results eventually, it seems none of the effort was really required. The newest trend to take over organizations is a dedicated person or team running a deal desk which specifically handles all the nitty gritty of contracts.
These staff are devoted to closing contracts and can guarantee the best outcome for everyone, while sales people and other employees can continue making money for the business.
The traditional method of contracts whereby two parties who know each other enter into a legally binding agreement with full terms and conditions laid out is now outdated.
Smart contracts are a sign of the future in which two parties can now enter into a self-executing contract that is written into a line of code.
An example would be if a company agrees to do or pay something so long as the other party does what they promised to do, and once these terms have been met the contract is completed using the code.
To get even more complex, both parties can remain anonymous if they choose to and the contract is carried out by a network of computers which can vouch for their trustworthiness.
Although this sounds quite futuristic, it’s becoming increasingly common and useful for cutting out a lot of the legalese surrounding contracts.
Although contract management software is nothing new, the programs running it and its capabilities certainly are. Modern contract management software now takes over every aspect of the contract lifecycle so that it can be a fully automated process if you wish.
Not only is the creating, negotiation, signing, and all other aspects done with this software, but it’s all available on the cloud as well.
Where in the past only registered users who had downloaded the relevant software were able to get involved in the process, these contracts are now stored online for anyone with permissions to access.
This means there’s far more flexibility and approval available, however, there is now an added risk to the protection and privacy of data.
Thanks to the advancements in contract management software, we are now seeing data analysis being put to use like never before. Previously, data could be taken from just about everywhere and used to grow or alter business practices, but never before was this done in terms of contract management.
With this new software, data is able to be collected about the nature of contracts, terms and conditions, and performance of contracts with all of the information then used to improve the business.
This means rather than using contracts simply as a way to signify an agreement, they can now give us insight into how our business is operating and where the strengths and weaknesses may lie.
In 2014, mobile surpassed PCs for the most common way that we access the internet, so it’s no wonder that our contract management is heading down the mobile path too.
With the improvement of contract management software so too comes more and more mobile-friendly ways to do business, in the eventual hope that it will all be possible from the palm of our hand.
As up to 92% of executives now own a phone for business purposes and state that they prefer using it after hours, it makes sense that they will want their contracts accessible wherever they go. This means the security and accessibility of contracts will become better adapted to mobile use and further away from PCs.
As it’s clear with these trends, the future of contract management looks to be more automated, streamlined, and efficient than ever before. This can only spell positive changes for the average organization, provided they’re willing to put in the time and effort to make these processes work best for their business.
The internet will, of course, play a huge role in how we manage contracts in the future, and for now, it seems to be already playing its part.
Whether it’s with the use of smart contracts that allow all parties full anonymity or the cloud housing all of our important documents for a more streamlined process, there’s no telling where the next step will take us in contract management.