Contract Management  And Business Continuity

Contract Management And Business Continuity

Written By
Joy Cunanan
Updated on
November 30, 2022
Reading time:
0
minutes

Every organization relies on relationships to function, and contracts play a significant part in controlling those ties. It is important to be able to handle such agreements under any circumstance. Having a solid contract management approach in place can assist assure business continuity during unplanned interruptions to your regular business operations or times when you're physically unable to travel to the office.

You can take a few steps to handle business agreements in a way that will put you in a position to minimize any repercussions from unplanned time away from your office. We have previously discussed the various reasons why you should get a contract management software. This time, we will discuss how contract management can play a pivotal role in business continuity.

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Business Continuity Defined

What Is Business Continuity?

Having a strategy to handle challenging circumstances will enable your company to continue operating with the least amount of disturbance feasible.

You need to know how to continue operating no matter what your organization is, whether it's a business, a nonprofit, or something else entirely. Any form of disruption can alter your business and may result in any of the following outcomes: 

  1. A failure of the supply chain which would prevent your business from obtaining materials, products, or services; 
  2. An outage of utilities, resulting in a lack of access to electricity, water, or internet; or
  3. A cybersecurity breach that would remove your consumers’ access to your website. 

Business continuity is crafting a plan to combat all the above instances and more. This requires in-depth foresight and tools in place to prevent any irreversible damage or stoppage of operations. A proactive approach to making sure mission-critical operations continue in the event of a disruption. A thorough plan contains contact information, instructions for how to respond to certain occurrences, and a timeline for when to use the document.

Clear rules for what an organization must do to maintain operations are provided by business continuity. The best course of action for corporate operations should be clear if the need for a reaction arises. There is a chance that the company, the clients, and the staff are all at risk.

The entire business, from upper management on down, is involved in the process. Although IT may be the driving force behind business continuity, management support and dissemination of critical information throughout the entire organization are imperative. The security team is another area for cooperation; although these two teams frequently work independently, a company can benefit greatly from information sharing across both divisions. Everyone should, at the absolute least, be aware of the fundamental procedures for how the company intends to react.

Why Is Business Continuity Important?

Business continuity is essential in a time when downtime is unacceptable and most consumers require immediate servicing. There are numerous causes of downtime. Extreme weather and cybercrime are two hazards that appear to be becoming worse. A business continuity plan that takes into account any potential operational disruptions should be in place.

During a crisis, the organization should be able to function at least minimally thanks to the plan. When an interruption occurs, business continuity enables the organization to remain resilient. An extended outage increases the danger of losing money, reputation, and other assets.

An organization must examine its own operations, identify any potential weak points, and compile vital data, including contact lists and technical system diagrams, that can be used in situations other than disasters in order to ensure business continuity. An organization can boost its communication, technology, and resilience by implementing the business continuity planning approach.

Even for compliance or legal requirements, business continuity may be necessary. It's critical to know which regulations apply to a particular business, especially during this period of rising regulation.

What Are The Essential Elements Of A Business Continuity Strategy?

Three essential components of a business continuity strategy are resilience, recovery, and contingency.

Resilience

By including employee rotations, data redundancy, and keeping a surplus of capacity when developing vital infrastructures and functions, an organization can strengthen its resilience. Organizations can sustain vital services both on and off-site without interruption by ensuring resiliency against various circumstances.

Recovery

After a disaster, it is vital to recover quickly in order to resume business operations. Setting recovery time goals for various systems, networks, or applications can help determine which components need to be recovered first in order of importance. Resource inventories, agreements with outside parties to take over business operations, and employing renovated spaces for mission-critical purposes are further recovery techniques.

Contingency

A chain of command that divides tasks within the company can be included in a contingency plan, which includes processes in place for a number of external circumstances. These obligations may include purchasing new hardware, renting out temporary offices, determining the extent of damage, and hiring outside vendors.

How Can Contract Management Improve Business Continuity?

Every corporate connection is based on agreements, which also specify how organizations cooperate. They assist reduce risk and maintain the flow of revenues and supply networks. Businesses and other entities must comprehend the obligations that they have made to consumers and vendors during emergencies or other important events that disrupt the regular flow of business.

By ensuring that your teams have fast access to the contracts underlying those elements of your business, contract management software contributes significantly to minimizing production and supply chain disruptions and falls within the technology component of your business continuity strategy.

A powerful contract management system must be able to assess risk and obligations, have remote access, a central repository, trackable workflows, system integration, search, and reporting capabilities.

Centralized Document Repository 

It's as important to have a central, well-organized, searchable library so you can quickly locate the contract you require. Ready access is essential for serving your customers, maintaining supply chains, and understanding risk, whether you need to confirm a vendor's service level agreements, are in the process of negotiating a deal, or your client is demanding to see their contract.

All-Access Anywhere, Anytime 

Most company continuity plans make the important premise that employees may need to work remotely or from different places. As a result, anytime, anywhere system access is essential, and that access must be both readily available and highly secure. Since everything else in your business continuity plan depends on your employees having access to everything they need to close new business and keep taking care of existing customers, remote access is actually the key to the total success of your plan.

There must also be a rapid search function because, without it, a central repository isn't of much use in locating the contract you require. Additionally, having quick access to contracts and the capacity to report on responsibilities and ongoing work is critical during times of crisis. That is made possible by a system with full-text searching, intelligent tagging, and AI capabilities.

One-Stop Integration Hub

Contracts do not occur in a vacuum. The information used in contracts frequently originates from external systems, such as Salesforce or internal enterprise systems. Without system integration, updating a downstream system to offer a service or issue an invoice after a transaction, or incorporating information like price data and payment terms, are manual activities that consume time and raise the risk of error.

Workflow Automation

In order to ensure that the appropriate person receives the correct work at the right time, workflow is all about orchestration and automating processes. This becomes much more relevant if there are multiple people participating or if an emergency forces a key employee out of the office.

Manual processes are difficult to oversee, and it's simple to overlook a step or let a contract sit in someone's email while they're out of the office. Finding a backup plan is made simpler by a system that automatically tracks what is intended to happen and when.

Data-Driven Risk Assessment

Your business must know where you stand to lose and what you must contribute during a significant event. When making important business decisions, some terms, such as those relating to force majeure, service level agreements, and penalties, may alter the risk profile for your organization. Your risk can be reduced if you have the ability to quickly locate the contracts that could be affected by the unforeseen event and surface this information.

Secure Your Business Continuity With Lexagle. 

Lexagle offers cutting-edge features that help in protecting your existing contracts and improve your processes so that you can create and close even more contracts in the future. Our one-stop platform provides a centralized document repository, complete with a clause and template library to ease your contract generation pains. All of your agreements can be tracked and searched easily on our database, accessible anywhere and anytime by anyone who is granted secure access to the software. We also provide analytics and a comprehensive contract tracker, with deadline alerts so you never lose sight of your obligations. 

This is just the tip of the iceberg – find out all the features we offer that can address your specific business needs by booking a demo with us today. 

Contract Management  And Business Continuity
Author
Joy Cunanan
Joy is the Digital Transformation Manager at Lexagle. As a marketing professional in the Tech and B2B industry for over seven years, she is always on the lookout for the next best solution in the ever-changing online world. With a passion for helping businesses thrive and optimize operations, she shares her expertise in the power of contract lifecycle management and its capacity of easing the contracting process for busy organizations worldwide.

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