Digital Contract Management: a Challenge or an Opportunity?

Top 5 Challenges in Contract Management

#1 Too many routine checks

Checking every document for errors, verifying the presence of essential requisites, analyzing a document’s compliance with corporate regulations, comparing versions with the ones sent by a counterparty – all these processes steal 50-70% of working time from employees. Meanwhile, Artificial Intelligence (AI) tools can make an employee’s life much easier by covering all these tasks.

#2 Hey, who is responsible for that one?

Depending on a contract’s terms and value, it can go through Sales, Legal, Procurement, and Finance teams. Security service may be involved when a new counterparty appears, and Finance team – when contractual obligations exceed some pre-established sum. In case of a framework agreement, it is important to inform the Procurement department. Hard not to miss something or someone.

Fortunately, contract management software streamlines the approval process by intelligent selection of an optimal approval route based on a contract kind and terms. An employee doesn’t need to lose time deciding to whom to send the document for approval.

#3 Compliance violation alert

Firstly, compliance means that a contract has to conform to a variety of laws, policies, and regulations. Secondly, a company must ensure that all involved parties fulfill their obligations. When the number of contracts is significant, this process becomes too complicated.

To prevent it, some contract management systems automatically identify areas of non-compliance and send reminders about contractual jobs, obligations, milestones, renewal, and expiration dates.

#4 Risk-not-free

A contract is complicated by nature as it has a big number of important details. Confuse one – and you can find yourself in a lot of trouble.

Risk assessment functionality of the contract management software analyzes contract terms for potential opportunities and risks (fines, penalties, payment dates, etc.) and sends a short review to a responsible employee to make conclusions. Some contract management software also allows checking a counterparty due diligence in one click.

#5 Find me if you can

The sheer number of documents collected in an organization makes finding a specific one almost impossible. Easy smart search of contract-related information and a single database of all contract-related documents can help you become a winner in this hide and seek game.

Contract management in modern business is a very challenging process indeed and needs innovative approaches such as AI-powered digital solutions for contract lifecycle management.