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5 Industries that can Gain a Competitive Advantage with Contract Management Software
In many industries, contracts are the foundation defining operational requirements for project fulfillment. Thus, contract lifecycle management (CLM) becomes crucial for managing operations appropriately and maintaining relationships with clients and partners. However, for several reasons, many companies rely upon external firms for contract management services, which has proven to be one of the most simplified, effective, and affordable methods over the past decade. In contrast, many others utilize contract management software, which requires a considerable investment in IT infrastructure, staffing, software subscription, and other tools that can integrate with the software.
Those who can afford these costs leverage the software to ensure absolute compliance with the terms included in an agreement. Moreover, for organizations operating remotely/virtually, implementing contract management software is the need of the hour. Thus, Let’s Further Read About 5 Major Industries that can Reap Multiple Benefits by Utilizing Contract Management Software.
5 Industries to Benefit from Contract Management Software
The US healthcare industry deals with a large number of contracts on a daily basis. Therefore, it is mandatory for all medical practices and healthcare organizations to carefully handle contracts that mainly include third parties such as insurers, drug stores, medical instruments, equipment suppliers, etc.
Healthcare companies can use contract management software for:
- Payer and provider contracts
- Vendor contract management
- Contract security
- Compliance tracking
Tech companies (like healthcare) manage several business contracts and other agreements that they need to keep track of throughout the contracts’ lifecycle. Moreover, apart from handling internal data, tech companies generally have the responsibility to protect their clients’ personal or business information. This creates the need for them to use software for contract management.
Some of the key benefits of contract management software for companies in the technology sector are:
- Vendor/client contract management
- Employment agreement management
- Contractual activity audits and reporting
- Tracking contract expiry dates
Most companies depend upon lawyers and law firms for optimum management of contracts. Therefore, professionals and firms in the legal sector can also use contract management software to enhance their contracts-related workflow, improve service quality, and speed up delivery.
Practical uses of contract management software for the legal industry:
- Clause identification & extraction
- Contract review
- Automated contract abstraction
- Contract consolidation
- Contract management
The big-size manufacturing sector deals with a whole lot of contracts. Therefore, contract management can become highly challenging for manufacturing companies as they usually have vendors throughout the world and get their supplies from international suppliers. This makes contract management in the manufacturing industry a great deal, and that’s why they should consider using contract management software.
Key benefits of contract management software for manufacturing firms:
- Vendor/supplier contract management
- Obligation fulfillment
- Contract-related notifications/alerts
- Compliance assurance
- Easier and quicker reporting
Similar to those in the manufacturing industry, consumer goods companies might also deal with hundreds if not thousands of active contracts with suppliers, vendors, and partner companies. Therefore, they might realize the need for contract management software in place in order to manage complex compliance guidelines and meet contract deadlines.
Besides the benefits it offers to companies across other industries, contract management software helps consumer goods companies:
- To stay updated about necessary documents and contact responsibilities
- To get the contracts signed faster with the electronic signature feature
- To manage contracts efficiently
If your company (regardless of the industry) still depends upon outdated means of contract management, for instance, manually handling documents and contracts, you might want to implement contact management software, and here’s why!
With contract management software for your business, you can:
Manage Documents Efficiently & Securely
Using contract management software eliminates the need for you to use additional software for document management. You neither need to extend the storage space at your office nor fill the cabinets with an abundance of files placed unorganized.
Moreover, the team responsible for handling documents can simply scan paper-based documents and upload them directly into the system, allowing you to store all the documents (and add tags) in one central, secure location. This also makes collaboration between teams a lot easier and more efficient, processing documents faster.
Keep Track of Contract Renewals
Renewal is an essential aspect of contract management, and if not tracked proactively, it can lead to a missed business opportunity. Using reliable software for managing contracts can help you set reminders that will notify you about the upcoming expiration dates.
This makes you leave your renewal worries behind because you can pitch for a contract renewal as soon as the software notifies you about its expiry date in advance.
Enhance Efficiency Organization-wide
Effective contract management software will have excellent automation features, allowing you to automate some of the most tedious, laborious, and time-consuming contract management jobs. Here, the smallest is document review – automation tools can review documents and even contracts, ensuring no errors are left unnoticed.
By reducing manual efforts, you can delegate other important duties to your team. For example, your team can now focus on analytical aspects of contracts like contract performance assessment, detecting red flags, and determining areas that need utmost or immediate improvement, etc.
Avoid Contract-related Risks
Where there are contracts, there are chances of a discrepancy or, sometimes, discrepancies. Contract management software enables your firm to onboard suppliers or vendors smoothly using validation and certification features. Such advanced software can review and evaluate contracts in order to detect potential risk factors.
This is essential for your firm, which probably operates according to multiple contracts. In addition, these systems can also help you spot and address contract violations (both minor and major).
Keep Your Data Ready for an Audit
Dynamic contract management software enables you to maintain records of comprehensive information about all your contracts. Such software also offers features like audit trials, allowing you to access all the historical data on contracts within a few minutes.
Your firm can accurately maintain contract history for auditing purposes and be ready for audit trials, ensuring internal or external compliance.
The Bottom Line
Effective use of contract management tools drives long-term value for your business. It also helps foster long-lasting relationships with partners and stakeholders. In addition, implementing one in place can help you execute and monitor contracts efficiently, enabling you to obtain better operational and financial performance and avoid risks, all paramount to business growth.
However, due to different contributing factors like budget constraints or staff shortages, many businesses cannot make absolute use of such software. Are you also facing such challenges? If yes, Cogneesol has customized solutions for you. We can effectively enhance your contract abstraction capabilities and the overall contract management process, regardless of your industry, business type, and size. To discuss our contract management services in detail, feel free to contact us at +1 646 688 2821 or email at [email protected]
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