In today’s fast-paced business world, where time is of the essence, manual contract management is quickly becoming a thing of the past. The traditional method of handling contracts – which involves a lot of paperwork, manual tracking, and time-consuming negotiations – is no longer sustainable in a world where businesses are expected to operate with speed, agility, and precision.
In addition, with the advent of digital contract management solutions, businesses can now streamline their contract management processes, minimize errors, and reduce costs, all while improving their overall efficiency and productivity. This article will explore why manual contract management is becoming outdated and why businesses should consider switching to a more modern and automated solution.
The Limitations of Manual Contract Management
Manual contract management has several limitations that make it unsuitable for today’s business environment. These limitations include:
Time-consuming process
Managing contracts manually can be time-consuming, especially when dealing with a large volume of contracts. For example, a legal department handles many contracts for a company. With manual contract management, the legal team must track each contract’s status, terms, and renewal date. This involves maintaining a spreadsheet or paper document with all the necessary information, updating it whenever changes occur, and notifying stakeholders of important dates or deadlines.
Suppose the company is dealing with multiple contracts at once. In that case, this process can quickly become overwhelming, requiring more time and resources than the legal team can manage. The result is often delayed, missed deadlines, and potential legal disputes. However, with an automated contract management solution, the legal team can create, track, and manage contracts efficiently, allowing them to focus on more strategic and valuable work. In addition, the solution can automate much of the contract tracking process, provide real-time status updates, and alert stakeholders of upcoming deadlines, freeing up the legal team’s time to focus on higher-level tasks.
Increased risk of errors
Manual contract management is prone to errors, and mistakes can occur at any stage of the contract process. For example, consider a situation where a company must manage a high volume of contracts, and its legal team is responsible for manually tracking the contracts’ key dates and deadlines.
In this scenario, it is not uncommon for legal teams to overlook or forget important contract details, leading to errors such as:
- Missing contract renewal dates
- Failing to update contracts with new terms or legal requirements
- Losing physical copies of contracts or important documents
- Making data entry errors when entering contract details into spreadsheets or databases
- Failing to notify stakeholders of contract changes or updates
Any of these errors can lead to legal disputes, financial losses, and company reputation damage. However, with an automated contract management solution, these errors can be minimized, if not eliminated. The software can provide real-time alerts for key contract dates and deadlines, ensure that all contracts are up to date with the latest legal requirements, and store all documents securely in one location, reducing the risk of lost or misplaced documents.
Limited accessibility
Manual contract management can also limit accessibility to contract documents, making it difficult for employees not physically present in the office to access them. For example, consider a sales team negotiating a contract with a potential client. The salesperson may need to review the contract’s details before a meeting. Still, suppose the contract is stored in physical format. In that case, the salesperson must go to the legal department’s office to access it.
This can be a significant inconvenience, especially if the legal department is in a different location or time zone. In this scenario, the salesperson may not have access to the contract when they need it, which can lead to delays or missed opportunities.
An automated contract management solution can solve this problem by providing remote access to contracts through a secure online portal. This enables employees to access and review contracts from anywhere, at any time, without needing physical documents. This makes it easier for sales teams to access contract information on the go, collaborate with colleagues, and close deals more efficiently. Additionally, by providing controlled access to contracts, businesses can ensure that sensitive information is only accessible by authorized personnel, reducing the risk of data breaches or other security issues.
The Advantages of Automated Contract Management
Automated contract management solutions offer several advantages over manual methods. These advantages include:
Faster Contract Creation and Approval
With automated contract management solutions, businesses can create contracts quickly and efficiently. Automated solutions can generate contracts using pre-approved templates, and approvals can be completed electronically without needing physical signatures.
Enhanced Contract Tracking and Management
Automated contract management solutions allow businesses to track their contracts in real-time. They can monitor contract performance, milestones, and deadlines and receive automated alerts when a contract is about to expire or needs to be renewed.
Improved Contract Visibility and Accessibility
Automated contract management solutions enable businesses to access their contracts from anywhere, at any time. They can be accessed through a secure online portal, allowing remote employees to view and manage contracts without the need for physical documents.
Conclusion
In conclusion, manual contract management is quickly becoming outdated in today’s business world. With the advent of digital solutions, businesses can streamline their contract management processes, reduce errors, and improve efficiency and productivity. Automated contract management solutions offer several advantages over manual methods, including faster contract creation and approval, enhanced tracking and management, and improved visibility and accessibility. As businesses continue to look for ways to improve their processes and stay competitive, automated contract management solutions are becoming an essential tool in their arsenal.
