You get an email from the CTO with an executed technology agreement signed by both parties. Along with the attachment, the email simply says: "Please file this somewhere." What happens next is so painful that most contract management professionals would prefer not to admit that this is how things are actually done.
First, you have to fight with your contract management tool to get the contract into the system. This usually involves manually inputing all kinds of data from the contract that you know you'll never need.
Then, once the contract is in the system, you'll have to find a way to track the renewal date — because most contract management tools are terrible at that. So you'll add the contract to your spreadsheet or some other tool the IT department hacked together for you. You're not really confident that you'll actually get a reminder when you need one, but at least it's being tracked somewhere.
Finally, when someone asks to review the contract — either because it's coming up for renewal or because the business wants to review the terms and conditions — you'll waste even more time trying to find a simple summary of what your organization agreed to.
When it's all said and done, you've wasted hours on a few very simple tasks for just one contract.
In this video, we're going to take a look at how manual processes create inefficiencies in a contract management process.
Hello and welcome back to our three-part video series on What Drives Inefficiency in a Contract Management Process.
Today we're going to talk about manual process.
To be clear, when we say "manual process," we're not talking about actually creating contracts, doing the drafting and the negotiating. Whether you want to use an automated tool or some kind of a tool to create and negotiate contracts or you want to go old school the way the lawyers like to do it, where you take an editable Word document and you go back and forth with red lines, that's really up to the organization and what the cultural fit is.
What we're talking about is what happens once the contract is completed.
Are you uploading the contract into a system where somebody is sitting there sometimes for hours typing in data into a tool where the contract is going to be stored? Then they're spending even more hours searching through that tool to find a contract that maybe was stored in there a couple of years ago and now is coming up for renewal.
Or they're sitting there reading the contract and trying to type up a summary so that if somebody else takes a look at it, they understand what was actually negotiated in the contract.
Or -- and this happens more than anybody cares to admit -- using an Excel spreadsheet to track renewals and trying to figure out some way to manually create alerts that tell you beforehand that a contact's going to expire.
I can tell you from experience, when it comes to those four things -- uploading contracts, finding contracts, creating summaries, and getting alerts -- manual process just doesn't work.
One of the key contributors to inefficiency in a contract management process is the manual process of managing contracts once they've been executed. Organizations unfortunately will spend a lot of time, effort and quite often a lot of money purchasing very expensive contract management tools that really don't get them these four key things -- automate my upload process; help me find my contracts quickly and easily; just give me a summary of what's in the contract, not one that I have to type up myself; and give me some quick and easy alerts so that I'm prepared before my contract expires.
Those are the three things that contribute to inefficiency of contract management.
A lack of definition of what contract management actually means for your organization. Decentralization, not only of the contract management process but the actual contracts themselves and then using manual processes to upload, retrieve, create summaries and get alerts on your contracts.
Thank you very much for watching this video series. We hope it's helped.
If you'd like to talk us about how you can improve your contract management process, you reach reach out to us here. We'd love to have a chat with you!