Wherever there is a contract, there is a risk. Enterprises deal in thousands of contracts every year, and tend to overlook, bypass or are sometimes completely unaware of the risks associated with a contract, leading to breach, vendor loss, financial and reputational loss or non-compliance, resulting in hefty penalties and even litigation.
Average Fortune 1000 company, with between 20,000 and 40,000 contracts, loses millions every year because of rollovers and evergreens.
The existence of contracts in any transaction, business or relationship is to mitigate the underlying risks associated with any agreement. Organizations dealing with numerous vendors, partners, suppliers, employees, etc. have to keep a tab on the entire lifecycle of each contract. From drafting and negotiation to execution once the signatures are in place and throughout the lifecycle of a contract, managing the workflow on emails, spreadsheets, word documents can lead to hidden risks and liabilities, leading to major contract breaches.
Assessing and managing every risk in contracts is crucial for gaining the best deals possible while allowing protection from liabilities and risks inherent in poorly drafted, executed and renewed contract.
Lack of visibility to contractual obligations, entitlements, deadlines, in large organizations is a common scenario where contracts are usually hidden in a drawer or stored in a hard drive, is difficult to access, search, and difficult to monitor. Hence, mitigating risks and ensuring contractual compliance can become difficult with poor contract visibility.
Contract Lifecycle Management platform can improve the visibility of contracts by managing the entire lifecycle of a contract including request tracking, approvals, drafting, negotiation, vetting, execution, renewals, revisions and terminations on a single engagement platform. The solution also increases the visibility of the end - to - end spectrum of the contracts to mitigate risks and adhere to compliance, in turn, helping the organization to be cost-effective.
For every contract that is created, negotiations and approvals follow. Keeping track of each contract and their approvals via phones, emails, spreadsheets are not only difficult but also time-consuming. Whether it is getting the contract approved by the right people at the right time or back and forth communications for request, contract redlining, negotiations, approvals with important clauses can be lost in translation.
Contract Management Software enables legal and business units to build their approval and workflow management process in just a few clicks. PracticeLeague Contract Lifecycle Management platform allows excellent coordination and collaboration between various departments and offices including external law firms, counsels and consultants. For any legal task in hand, legal counsels can easily assign the relevant internal or external resources including external counsels, consultants, etc.
According to a recent Benchmark Report, “Challenges in Procurement,” 50% of Procurement Executives stated that they are achieving less than 50% contract compliance. This is an alarming finding when one thinks about the risks involved.
As businesses are growing, so are the contracts and the inherent risks due to missed or forgotten deadlines. With the increasing regulations and scrutiny, companies are not at the luxury to miss a few deadlines or obligations and risk the disruption in services/products delivery and ultimately revenue of the organization. Updating data for contract milestones, penalty clauses, and more, in spreadsheets, can be a burdensome and error-prone process.
PracticeLeague Contract Management solution allows legal to manage important dates and key obligations allowing to view important information without trawling through a contract. It also enables legal counsels to set-up advanced reminders, triggers, and alerts for instant notifications.
The impact of mismanaged contract process has become evident in businesses where the concern of non-compliance in contractual agreements is growing rapidly. To sign off a contract and forget is an impasse and a risky behaviour for businesses who are scaling while performing under intense pressure from various stakeholders. Non-compliance can influence an organization’s financial, reputational position as a result of violations of laws, regulations, obligations, or organizational standards of practice.
As per an IACCM survey, up to 600% increase in spend management related savings is possible with doubling of contract compliance. With such high value at stake, investing in advanced contract management solutions is the best way to assure maximum compliance. Contractual non-compliance gaps amount to nearly 40% of total obligations (Source: IACCM).
Keeping track of contractual obligations, without any way to configure alerts and reminders, can be an onerous task. Contractual obligation just like contract lifecycle management isn’t something that you do once and store it in a file. The process needs to be performed on an ongoing basis, throughout the lifecycle of every contract. To manage an increasing number of contractual obligations, legal and business teams require an automated platform that will enable them to configurable alerts, reminders, and act as a secure repository of all contracts.
PracticeLeague Contract Lifecycle Management platform provides a configurable, scalable and integrated architecture to help enterprises easily adapt and streamline their contractual obligations. With the robust CLM solution, businesses can measure, control and analyze all contracts and ensure timely remediation of any gaps before damage to the business. The platform will help in running effective operations in a cost and time-controlled environment and understand the efficacy of each contract and its effect on the business.