Benefits of an Effective Contract Management Process
Having an effective contract management process can greatly benefit your company. It boosts productivity by accelerating negotiation cycles by 50%, giving you more time to focus on what matters. By adopting a contract management software your contracts’ lifecycle is streamlined — from preparation, and negotiation, to its execution. With greater visibility, it reduces erroneous payments by 75-90% cutting down operating and processing costs by 10-30%! Given these benefits, contract management can be strategically used to drive your organization’s competitive advantage.
Poor contract management brings up the average cost of a simple contract to $6.90, while complex contracts would cost $49.00. This would lead to a decrease in annual revenue by 9%, decreasing a contract’s value to 40%, especially without close contract governance. Thus, a simple process improvement in managing your contracts can prevent costly inefficiencies. Shifting from a traditional approach to automating your contracting process does not only minimize risks, but also strengthens regulatory compliance and efficiency.
The benefits of an efficient contract management process are further manifested in the improved collaboration within and outside your company. The burden of handling any organization’s agreements is passed on to the legal team, handling 90% of records management. With this, only 1.2% of administrative personnel participate in contract management. Adopting a contract management platform eases this burden, reducing the time and effort spent on contract creation, and ultimately empowering teams to be involved in every stage of a contract’s lifecycle.