Over the last several years, companies have started to pay closer attention to internal contract management and the impact it has on growth and revenue. In an effort to reduce contract lead times, most have taken steps to move away from manual processes, shared drives, and spreadsheets in favor of a more automated contract management solution capable of increasing contract velocity while simultaneously managing risk.
However, if you've spent some time looking at contract management software, you've probably noticed there is a huge variety of solutions, and many of them can take a long time to implement, have a lot of features that may not be required or even helpful for your team, and can be challenging for a team to learn to use.
Good contract management software helps companies streamline contract creation, negotiation, execution, and storage, while automating the manual, time-consuming tasks associated with the process. However, every industry is unique when it comes to managing contracts, and with so many solutions on the market, finding the right fit can be time consuming in and of itself. Not all contract management platforms are created equal. If you're in the market for a new contract platform, be sure to consider the following features when evaluating whether a solution is right for your organization:
1. Platform Type
There are multiple types of contract management platforms on the market with varying feature sets. Before you begin looking for a new contract management software, consider which areas of your company's process needs the most improvement. Pre-signing platforms help businesses facilitate the creation and negotiation phases of the contract lifecycle. These platforms may be best for businesses that already leverage a third party solution for document storage. Post-signing platforms support the later stages such as contract storage, retrieval, and reporting. If your entire contract lifecycle needs improvement, consider a platform that offers both pre-signing and post-signing capabilities, or Full Lifecycle platforms.
Because many platforms are designed to support specific stages of the contract management process, it's important to understand what your business needs before starting your search.
2. Ease of Use
The degree to which contract software can improve a company’s lifecycle is largely dependent on how easy it is to use. A poor user experience, such as a complicated interface or ineffective search capabilities can result in employee frustration, failed adoption, or prolonged contract execution. Long integrations are expensive, so the faster employees are able to learn and use the platform, the better results your business will see long term.
A good rule of thumb is that the more people that you plan to have access the system, the easier it should be to use.
Prior to selecting a solution, be sure to test the user experience and platform functionality. Ask the software provider for a demo or a free trial so that you can evaluate the effectiveness of its search and filtering capabilities as well as the organizational tools within the platform. The interface should be simple, intuitive, and easy to use. A final consideration is how easy is the software to manage, not just use. You will want to make sure each change to the system will not involve a 6-8 week cycle requiring technical skills.
3. Pricing
With a wide range of solutions on the market today, it's common to see a wide range of price points. A recent pricing analysis on contract software from Capterra suggests that costs range from from $3 per month to $45,000+ per year. Larger companies can pay in the millions for complex systems.
It's important to remember many inexpensive options leave much to be desired in regards to usability and functionality. This can lead to low employee adoption or failed integrations. On the other hand, overpaying for a solution can offset any financial benefits gained form improving the contract lifecycle. At the end of the day, the key to achieving value is choosing a feature set that will drive greater cross-department efficiency while staying within your budget. Think of the Goldilocks principle: Not too much, not too little, but just the right feature set.
Many software providers also offer a free or “freemium” platform, but it’s important to note most of these products won’t meet a company's needs - especially those with a complex lifecycle. Both large and small companies that opt for a free offering will quickly realize the product is missing many important features or has limited usability. After a trial run, many will find upgrading to a paid version is easier than restarting the search for a new platform.
4. Alerts
When it comes to keeping teams organized, alerts and reminders are essential. Alerts can help procurement teams stay well ahead of auto renewals and expiration dates. They can be used by finance teams to track payment dates, and they can even be used by project managers to track deliverables and ensure projects stay on schedule.
Look for customizable alerts that can easily be assigned to specific platform users. Alerts should be in-platform and also email-based to ensure everyone is in the loop, including those employees who are not actively using the platform on a daily basis. Calendar views can also be helpful for giving leaders and contract managers a more holistic view of upcoming dates.
5. Customer Support
One of the most important things to consider when choosing a contract platform is the level of customer support offered by the software provider. Implementing contract software requires a lot of time and resources upfront, and the vendor should be willing to help with some of the heavy lifting. A good software provider will take steps to make sure your company is setup for success, such as helping to import all of your organization’s contracts at no additional cost.
Because employee adoption is so important, look for a vendor that is willing to conduct training sessions, or at the very least, offer unlimited support. Many vendors see support services as an opportunity to add additional service fees. Because the amount of support needed often depends on the complexity and intuitiveness of the platform, companies should not be required to pay extra - look for a vendor that offers support for free.
6. Security
If your contract platform is cloud-based or hosted on a third party server, it’s important to look into the company’s data storage and security practices. Consider platforms that utilize reputable hosting environments such as Amazon Web Services (AWS), and ask for a recent SOC2 audit, which contains documentation of the company’s security practices, and ensures that they are actually following them.
Your contract management software should take measures to protect contracts from external data breaches. Look for a solution that provides 256-bit encryption both at rest and in transit, and also has intrusion detection systems to prevent data breaches and malware. Ask for documentation on backups, disaster recovery, vulnerability and penetration testing, which can help ensure documents are protected from the latest cyber security threats.
7. User Roles and Permission Settings
Protecting your contracts from hackers is important, but safeguarding them from internal snooping and unauthorized access is also necessary. User permissions and role settings allow leaders to control which employees are eligible to access, read, or view specific documents. By assigning user permissions, companies can ensure documents are only able to be viewed by their intended audience.
In addition to permission settings, audit trails can also provide details on which employees viewed or edited a document. along with the associated timestamp of each action. In the event of an issue or mistake an audit trail can provide quick insights into what went wrong.
8. Reporting
Visibility and transparency is a key component to driving operational efficiency. Customizable reporting provides various contract stakeholders with key insights into contract management, sales, and procurement processes. The ability to generate real time views into vendor usage, contract dollar figures, expiration dates, and other metrics can help companies stay organized. This is especially important for large companies with multiple subdivisions. When looking for contract management software, be sure the product offers customizable reports and dashboards, so all internal parties can quickly access the metrics they need.
While the exact set of features and functionality your team needs will ultimately depend on your size and industry, these seven items should be at the center of any useful contract platform. If you're in the market for a new contract management solution, schedule a demo with ContractSafe. Our easy-to-use, affordable solution will help eliminate the time-consuming, administrative components of contract management.
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