Contract Management Challenges and Solutions

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Contract Management Challenges

• How to tackle them?

2
Contract Management Challenges
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Contract Management Challenges
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Contract Non-Compliance Regulatory Compliance
Issues

• Companies are legally required to follow strict
  regulations and protocols ensure things like
  employee safety, environmental responsibility,
  data security, and financial honesty.
• Contract managers are responsible for ensuring
  that they have accounted for all of these
  required compliance clauses in the contracts.
  These should account for terms respective to the
  country or state laws you are operating in.
• The solution that we recommend for this is
  adopting a contract management system. With a
  contract management solution, you can ensure that
  every time you draft a contract these clauses are
  added to them.
• Most automatic solutions are equipped with
  features such creating contract templates and
  clause libraries for faster and efficient
  drafting of contract documents.

5
Standardization and Centralization of Contracts

• For companies that deal with adhoc contract
  drafting processes, one of the main challenges to
  overcome is that of the propagation of contract
  clauses and contract templates in circulation all
  around organization.
• Standardization of contracts involves the
  standardization of packages offered to customers.
  
• There are several benefits in standardizing
  contract language like cost-saving, increased
  productivity, and more.
• By using a contract management tool companies can
  cut down on time spent on drafting and reviewing
  contracts, and teams can spend more time on
  making strategic initiatives.

6
Managing Supply Chains

• Supply chains are the most important part of a
  company. The relationship between company and
  supplier is defined by the contracts between
  them.
• When the amount of the supply chain increases
  globally, the need for better contract management
  between these supply chains will also become
  necessary.
• A major challenge that can come up is fluctuating
  prices for raw materials involved in
  manufacturing. This means that cost of doing
  business can fluctuate roughly based on the
  current circumstances and factors which will not
  be in your control.
• The solution that any experienced professional
  would recommend for the above scenario is to
  enter into a well-drafted contractual agreement
  for your supply chains.
• The contract drafting features of a contract
  management solution will enable drafting up a
  solid contract for the companys supply chains
  and manage them throughout their lifetime
  efficiently.

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Contract Management Expiry/Renewal, Turnaround
Time, Extracting Key Data

• Contracts can be a little tricky sometimes.
  Contract managers need to be very vigilant about
  the expiry or renewals of contracts in the
  organization.
• A missed expiry or renewal date could result in
  many problematic situations like not being able
  to bill for work done on a contract or paying for
  the renewal of a tool you don't use.
• What contract management tools do to tackle this
  solution is creating automatic notifications or
  alerts that are sent out to stakeholders.
• Contracts could get delayed in the process, which
  is a very common mistake for companies. What
  contract management systems offer in this
  situation are tools to speed up contracts and
  data to help identify any possible bottlenecks.

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Inefficient CLM Solutions or Tools

• Last but not least, a major challenge facing
  companies is inefficient contract life cycle
  management tools.
• The truth is, most contract managers are still
  using conventional methods like Excel
  spreadsheets, email, and paper to manage their
  contracts.
• For companies that deal with more than 20
  contracts a month, a contract management solution
  could become the factor that boosts its business.
  
• Choosing a contract management solution could
  prove to be a great improvement for any growing
  organization.

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Conclusion

• Contract management has never been an easy job.
  It has its risks and potential threats that
  affect the smooth running of businesses.
• With the right contract management tools and a
  well-planned strategy, you can achieve the best
  out of a contract management.
• And when choosing a contract management system,
  you should know what features you should have in
  the solution.
• Because packed with features could also become an
  inconvenience.