More often than not, sales figures are the metric used to measure a company’s market performance. But in many cases contract administration can have an equally significant impact on the bottom line. Inefficiencies that start there have a way of rippling throughout your entire business.
A recent benchmark survey of legal and contracting professionals revealed that many companies are negatively impacted by poorly optimized processes, wasted legal expertise and a general lack of visibility into contract obligations. But more importantly, when contract adminstration is struggling, so does the rest of your enterprise.
Here is a look at three nightmares that can submarine your contract processes:
1. Poorly Optimized Processes
Contract management, which can be a very complex and time-consuming process, is made worse by disjointed, manual steps.
Manual steps in the process lead to human error, stagnated contract cycles, limited process control, minimal risk management and no contract performance visibility. The results are missed obligations, unachieved negotiated terms, reduced revenues, increased costs and low compliance.
2. Wasted Legal Resources
Large companies that lack a centralized legal playbook and effective clause library waste a tremendous amount of time and energy on avoidable tasks such as running down outdated legal language or managing a high volume of non-standard terms. This can blur the lines on who is actually performing contract administration. Lawyers become overqualified, expensive administrative resources. And while teams of paralegals and contract managers might be a cheaper option, they often bear responsibility without possessing the appropriate authority.
3. Poor Visibility
Legal is often asked to “see around corners” and manage risk for the organization but when legal lacks visibility into contract terms, obligations and value, this is an unachievable task. Visibility doesn’t just include the ability to find a contract — it also includes the ability to track a multitude of change forms and amendments associated with each contract, and to quickly assess how a deal has changed over time.
You can’t control what you can’t see, which is a troubling notion considering legal is responsible for managing contractual risk. Nonetheless, 40% of legal departments lack the necessary insight into critical contract information.
Don’t let your Contract Lifecycle Management processes keep you awake at night. Download the full Survey Report Contract Management Flaws that are Submarining your Business. And have a Happy Halloween!