Contract managers play a vital role in countless corporate functions. More than just the vanguards of company contracts, contract managers must often work across teams and business lines to draft and negotiate agreements, monitor and evaluate contract performance, and keep track of crucial milestones and countless other functions.
These tasks make contract management central to the functioning of most organizations. It’s a vital role, but — due to the detailed, cross-team nature of managing so many contracts — also one with numerous inherent challenges.
Here are five tough challenges contract managers face every day on the job — along with suggested fixes to help ease these common pain points.
Challenge 1: Keeping track of hundreds – if not thousands – of contracts
Employment agreements, vendor agreements, non-disclosures … the volume of contracts within enterprises adds up fast, reaching levels as high as the tens of thousands for larger businesses. Without a process for storing and organizing these massive contract stores, merely knowing which contracts are where can often be a top daily challenge for contract managers.
The good news is digital contract repositories can render every contract manager’s worst enemy —desk drawers and filing cabinets — obsolete. Rather than storing contracts willy-nilly and in paper form, you can ease the challenge of keeping track of all of those contracts by setting up an online contract database, with a consistent naming structure and well-organized folder system. This means you can say goodbye to the days of rifling through papers to find the contract you need —with a contract repository; you simply have to use a search function to look within a single place.
Challenge 2: Siloed teams and processes
Within corporations, it’s not uncommon for every team and department to have its own culture, colloquialisms, and ways of doing things. These unique practices can be great for furthering team bonds and common goals — but they’re less ideal when every team has a different approach to contracting. For contract managers, variances in how teams approach their agreements — from standard language and contract terms to milestones — can be a major headache, forcing you to reinvent the wheel on each contract you encounter through the day.
Contract managers can ease this challenge by introducing company-wide standards and processes that unify how contracts are handled across all departments. While often, bringing in new company-wide procedures means getting buy-in at the highest levels, it’s worth making the case by highlighting the costs these silos can incur. These may include duplicate purchases, needless hiring, and other expensive redundancies.
Challenge 3: Never-ending bottlenecks
While it is easier to maintain your organization’s contract management strategy and priorities if all contracts flow through the contract management team, this puts a considerable burden on contract management employees. On any given day, you’re likely faced with numerous requests to pull older contracts for reference, review new contract terms, help a team find a contract template for a specific purpose and countless other tasks. All of these requests lead to one frustrating thing: bottlenecks.
One significant way to ease the volume of requests is to empower employees to manage specific contract-related tasks themselves. This doesn’t mean unlocking your filing cabinet and allowing a free for all – per the solution to Challenge 1, you’ve already migrated to an online repository anyway. But moving your contracts to an automated contract management system can also enable this empowerment without sacrificing the security and integrity of your contracts.
How? By seeking a solution that offers user-based permission roles and access restrictions, you can enable secure access to specific contracts to only the relevant employees. This allows you to create a self-serve process for certain functions, meaning that not every contract-related task must flow through you. You can also set up a well-organized, well-labeled contract library, allowing employees to easily find any standard contracts they may need, without having to file requests you must then fulfill.
Challenge 4: Getting contracts signed
Though many think the hardest part of contract management is reaching a deal, contract managers know that’s only half the battle. Whether due to lack of momentum, changing corporate priorities or other factors, getting contracts signed is also a frequent challenge.
But electronic signature tools can impact the speed and efficiency of executing contracts, reducing the amount of legwork and resources required in the ongoing challenge of getting pen to paper.
Challenge 5: Surprise milestones
If contracts aren’t organized, and multiple teams handle their agreements in a variety of ways, then it follows that tracking various milestones will be a challenge, if not an impossibility. This failure to stay on top of essential contract timelines can have a significant impact on your business. It may mean missing cancellation windows or autorenewal dates for agreements that aren’t beneficial to your organization, can result in penalties or simply having inadequate time to prepare for renegotiations, meaning that you enter into discussions not adequately informed and at a disadvantage.
Implementing an organized, centralized approach to contract management is one important way to reduce the risk of having milestones sneak up on you. But organization alone isn’t enough given the volume of contract-related dates you must track. This is where having a milestone management strategy becomes essential. Rather than taking a reactive approach, this means identifying key dates at the start of the contract lifecycle. Then, as you enter each contract into your repository, utilize features such as automated notifications that will remind you of impending milestones so that you don’t have to track and remember dates manually.
Contract management is the lifeblood of any organization — and with that comes daily challenges. But by staying organized and using automated tools, it’s possible to overcome some of the greatest daily difficulties of this vital role.