Optimizing contract workflow efficiency with automated processes

How to streamline contract workflows

To streamline contract workflows, legal teams must first zoom out and evaluate their complete contract process and how it intersects with other departments across the organization. Streamlining contract workflows is an exercise in process mapping, engaging relevant stakeholders, and employing technology, but it begins, predictability, with your contracts. Contracts are the basis of any business relationship, and their management involves more than just putting ink to paper.

Contracts go through various stages, from a contract request to termination or renewal. And managing these contracts? It’s not just about keeping them in a drawer somewhere. It’s about tracking their progress through the various stages of their lifecycle.

Before diving into how you can effectively manage your contracts, you need to have a clear understanding of the different stages of the contract lifecycle. Here’s a quick breakdown:

1. Contract negotiations and drafting
2. Contract approval
3. Contract execution
4. Contract monitoring and management
5. Contract renewal or termination

Efficiently managing contract workflows can help keep your business on track by doing more in less time, making sure obligations are fulfilled, deadlines are met, and projects are completed successfully.

What are the benefits of a good contract workflow?

Imagine juggling a bunch of contracts, and somewhere along the line, a mistake is made. Maybe a deadline slips through the cracks, or an obligation isn’t met. You could end up in a whole lot of legal and financial hot water. But with a well-oiled contract workflow, you can dodge these issues.

Good workflow management can optimize your processes for a variety of reasons:

1. Efficiency: Making the contract management process as efficient as possible saves time and resources and increases productivity.
2. Keeping projects on track: it’s important to manage a contract workflow to ensure everyone knows their roles and responsibilities. This is key to avoid delays, missed deadlines, and penalties.
3. Accuracy: Ensuring that all contracts are consistent, accurate, and legally compliant is crucial to prevent the possibility of errors, penalties, and fines.
4. Collaboration: Transparent and efficient collaboration between legal teams, sales teams, and vendors is essential for timely decisions and successful contract implementation.
5. Security: Sensitive data is more secure in an environment that’s governed via strong processes and automated workflows.
6. Consolidate operations: Centralizing your contract management in a single platform provides better visibility and control, reduces the risk of error, and avoids duplication of effort.

The 5 steps to optimizing your contract workflow

1. Identify the stakeholders involved

Before you dive into optimizing your contract workflow, make sure you know who’s who in the process. Get familiar with the people involved, like the legal, procurement, sales, and finance teams. Figure out what each team’s role is. That way, you know what part they play in the contract management process, and each stakeholder can provide instructions for how to improve contract workflows.

2. Map out workflow processes

In order to map your contract workflow, you first need to identify key stakeholders and define contract duties. By mapping the internal processes that are primarily responsible for the contract’s creation, approval, and execution, you can ensure that everybody knows the process and can participate in future improvements.

3. Automating approval processes

Automating contract approval processes helps avoid repetitive tasks, saves time, and reduces the chance of human error. It’s essential to implement automated routing and notifications to avoid delays and that details are not missed. It also ensures that the processes are secure and improves productivity for the organization.

4. Collaboration and communication

Effective communication and collaboration between all parties involved are critical while managing contracts. This helps avoid misunderstandings, speed up the negotiation process, and ensures everyone is on the same page in terms of deliverables.

5. Tracking and monitoring

Real-time visibility into progress is essential as it allows you to address possible bottlenecks or risks ahead of time. Set up alerts and notifications for task completion and deadlines; this helps project managers to monitor performance, improve efficiency, and avoid delays.

What you need to ensure effective workflow management

While the above steps are useful, executing them without the right tools can be difficult, if not impossible. More and more businesses are realizing that they can no longer rely on yesterday’s solutions for today’s problems. This is why contract lifecycle management (CLM) software has gained prominence recently.

Why CLM matters in improving your contract workflow

A CLM solution simplifies and enhances the contract management process. By consolidating all contracts into a single point of reference, it centralizes administrative tasks and alerts. This means that everything you need for efficient workflow management is readily accessible from a unified dashboard.

With automated workflows and standardized templates, teams can create, review, and approve contracts more efficiently. CLM also helps eliminate manual, time-consuming tasks and paperwork by allowing you to create, negotiate, approve, store, and retrieve contracts centrally, resulting in improved visibility and efficiency.

Conclusion

Navigating contract workflows is pivotal in creating contract efficiency, cutting legal operations costs, improving deal speed, and shielding you from potential risk and compliance pitfalls. The potency of well-orchestrated contract management workflows lies in their capacity to boost efficiency, enhance communication, and drive collaboration.