Contractor Management Software: Business Benefits & Importance In 2022
Updated: Jul 26, 2022
Streamlining any business activity starts with a tool that enables team members to collaborate quicker and more effectively. By using paper-based systems, the team can't get real-time information. A project's success will be greatly improved if every team member has access to real-time data. Managing contractors and their contracts is no exception.
This article examines how contractor management software helps businesses streamline operations more effectively.
What is Contractor Management Software?
Using Contract Management Software (CMS), you can create, edit, track, and renew contracts throughout their lifecycle. With a CMS, you can combine multiple functions into one tool so your staff can find information easily, including a centralized repository for contract information. You can automate repetitive tasks with templates and other features. There are also analytic reporting features that allow you to analyze and optimize future contracts.
Many companies place great importance on contracts during the formulation of an agreement but tend to forget them after they've been signed. But contracts are active long after they are signed. A contract should serve as a guide for the duration of an agreement. In order to ensure the parties are living up to their responsibilities, they should be consulted continuously.
During the course of a contract's lifecycle, however, the contract may pass from one department to another, and a lot of critical details may escape notice. A poorly managed contract can lead to a 9% loss of revenue. Keeping the contract available and relevant at all times is just one way management software can keep the agreement on track.
Improving Project Success with Contract Management Software
Decrease Time for Data Upload
A paper-based contracting process wastes time. The time staff members spend traveling back and forth between the office and client sites, for example, is much larger than the time spent entering the data they have received. Employees often work during their commutes. With the help of cloud-based contract management software, employees don't have to worry about waiting to get started. Contracts can be inputted instantly, attached with relevant files, and updated as needed.
Improve Enforcement of Pre-Approved Legal Language
Employees often grab the latest contract template from the office before leaving for a client visit in order to save time. Despite their good intentions, this action causes two problems.
Firstly, they may not be working with the latest contract template. If your company lacks version control, it could create a contract that contains problematic clauses. Secondly, employees may not be aware of the correct clauses if they are not able to locate the latest contract templates. The two situations could be solved with a centralized archive of the latest contract clauses and templates:
Your company would update this library so there would be no question about where the latest files should be found.
Employees clearly understand which clauses they may use, resulting in more effective enforcement of your pre-approved language.
Due to the real-time tracking within one system, version control issues are no longer an issue.
Collaboration is Enhanced
Unlike a paper-based system, management software allows managers to create task lists to keep teams organized. Employers can schedule emails and assign work through automated email alerts, which keep them engaged. Check-in and check-out features are also available for managers to monitor employee activities.
As you increase the visibility of the activities of the team members, you not only hold everyone accountable but also improve team collaboration. Your contracting process will be more efficient if you create a list of tasks so that everyone within your organization knows when their task is due or when another task is completed.
Who Can Benefit from Contract Management Software
An essential component of contracts is their role as a formalized handshake between two parties, guaranteeing transparency, accountability, and the ability to adjust as needed. Contracts govern all business relationships with clients, employees, vendors, or anyone else.
Procurement Teams
Procurement teams negotiate the contract terms and conditions as part of their work to find, establish, and build new relationships with vendors. Procurement teams using contract management software have better insight into the efficiency of contracts, so they can better determine whether a business relationship will enhance business goals.
Legal Departments
Legal teams face the most pressure from all the departments that touch a contract. Software for contract management reduces risk and ensures contract compliance by providing an easy way to enter contracts and identify problem clauses.
In addition to producing risk analysis reports and compliance tracking, the software can analyze all contracts within the organization. Additionally, legal teams will have access to a library of pre-approved clauses and other tools to streamline the process of assembling and submitting documents.
HR Departments
By centralizing and tracking documents like offer letters, NDAs, and other hiring documents, HR teams can simplify the tedious process of hiring and onboarding new employees. The contract management system helps HR teams organize company documents and give appropriate access to them across a range of materials. The right information is accessible to employees, everything from employee handbooks to company policies to expense reports.
Finance Departments
It can be challenging for finance teams to extract meaningful insights from huge amounts of data. Unpaid revenue and underperforming services can easily be located and identified with business management software. A contract linked to your workflow will help you avoid penalties for late-payments and unmet terms. Using a management software system, you can organize your cash flow to contracts and terminate them in real-time while ensuring all parties are working from the same contract version.
Does my Business Need a Contract Management Software System?
No single business is alike, but many companies reach the point where their bottom line suffers due to managing contracts through Word documents and PDFs. Many companies feel the pressure when their contract management load reaches around 20 contracts per month.
The sole job of a contract specialist or manager is to manage and maintain contracts. You may benefit from a contract management tool if you are considering hiring a contract specialist. Even though contract specialists can alleviate some of the burdens of contract management, they cannot eliminate the root cause of the problem - manual, meticulous, and human error-prone contract lifecycle management processes.
Eventually, you will need to hire a contract manager to help your business grow. At some point, you'll need someone to oversee the contract managers. By accumulating more contracts, there will be more information to sift through, and your contract practices will become more challenging to revise. Successful contracts shouldn't be complicated. You can scale your business without hiring more staff with the best contractor management software system.
Your contracts will be clear, convenient, and legitimate with these platforms. A contractor management platform allows some businesses to manage thousands of contracts by a small team.
How To Choose the Best Contract Management Software For You
Choosing which contractor management software to buy is one thing, but actually buying it is another. A variety of options are available. Are you new to contractor management software and wondering how to make a decision?
In the end, you need to fully understand your contractor's requirements. The software should be seamless and easy. You can be confident in your decision if you ask yourself these relevant questions.
1. Is it Expensive?
Choosing the cheapest contractor management system is not the only factor to consider. Getting the best return on investment is what you need to focus on. You must ensure that the software is efficient. Technology should alleviate resource pressure and automate manual tasks rather than work against you. For the software to benefit you, consider how much time will be spent on implementation and management.
2. What are the Features that Your Business Needs?
There is no need for flashy features and functionality if it doesn't deliver business value. Choose a solution that aligns with your business requirements, not one that looks fancy.
Can the software detect expired licenses, send alerts, and locate qualified contractors? How flexible is the system?
A feature that doesn't deliver value won't matter and will just impede your efforts. A simple system is better than a complicated one.
3. Is it Easy to Implement?
The right contractor management system should be up and running quickly. Time and resources will be wasted if the software is difficult to implement. Additionally, the longer you wait to implement the software, the longer you'll have to wait to see any benefits. Whatever system you choose, ensure you'll be able to implement it easily and that you'll have support if needed.
4. Usability of the Software
It's important to start using contractor management software as soon as possible. Choose an easy-to-use system. An intuitive user interface and a top-level dashboard are essential. Try it out to get a feel for the user experience. Make sure you are comfortable with the software by asking for a guided demo. You may need some training and support to get started, so if this is the case, ensure that it is readily available.
5. Can Your Contractors Use It?
You need contractor management software so that your contractors can also use it. Consider your chosen solution from their perspective. From their perspective, ask yourself whether training is required. Your contractors need easy-to-use software if you want them on board.
You should consider a provider that will support you and your contractors by phone and email. Consider the support's location. In the end, you'll end up back where you started if the contractor experience is not adopted and used.
What Are the Benefits of Contract Management Software?
Contractor management software helps you grow your business - and grow it better. Contractor management services provide you with more insight into your contract efficiency and enable you to take action quickly to optimize it.
Increased Speed
Using contract management technology, you'll save a lot of time and hassle when creating contracts. Your terms and clauses will be updated automatically across your entire system as you optimize your contracts.
Better Collaboration
The real-time editing of a document is possible with contract management solutions. Having everyone work from the same contract version provides greater flexibility and allows for more fine-tuning.
Easy Sharing
Management software eliminates the issue of location. A link is provided to your contractor so that they can access the contract and edit it. Contracts can be approved anywhere using e-signatures and other features.
Enhanced Searchability
Your contract management platform lets you search documents based on their text, reducing the time you spend researching and providing pinpoint access to a wealth of information.
Top-Tier Security
In the 21st century, every bit of data is sensitive. Using digital encryption and other cybersecurity protocols, a contract management software system keeps your contracts safe.
Cloud-Based Storage
In addition to losing physical copies of contracts, digital versions can be lost if stored on a hard drive. By using cloud-based storage, your contracts never fall into the wrong hands.
Scalability
Implementing a management software system can boost your business's efficiency and speed. As your business grows, your processes and procedures will evolve as well. In the coming years, new technologies will offer new business opportunities and bring new legal and compliance requirements that must be adhered to. You can upgrade your protocols seamlessly with a contract management platform.
Global Reach
When you extend your business's reach by editing and approving in real-time, you create connections with suppliers and vendors around the globe.
An Endless Contract Repository
There will be thousands of contracts and service providers that you will work with over the years. Contractor management software can store and organize all these documents, preventing clutter and keeping them easily accessible.
Frequently Asked Questions
The contractor management software designed for a certain industry can include unique specifications and features. Processes and procedures will vary from industry to industry, fit for different compliance policies. If you want to decide on a software solution that meets your organization's needs and contracting goals in 2022, consider the following questions.
What Security Features Does Contractor Management Software Use?
A contract management system must protect and secure data. Is the platform compliant with industry standards and regulations and has an established, reliable server infrastructure? How is data loss protected?
As an example, a contract management system based on CEO-ME could utilize data restoration features in the event of data loss. Data replication and automated backups are critical to preventing data loss. Security procedures must be repeatable and independent.
How Easy is it to Transfer My Current Contracts to the Contractor Management Software?
Online contractor management software helps businesses manage contracts centralized digitally. The digital repository allows you to store, categorize and search for documents. Users will be able to access and store contracts in different ways. Finding a solution that doesn't limit your users is recommended.
Is the solution compatible with all file types? The results will help you determine if your contract data can be migrated.
During this process, does the software provider help? You can upload all documents and contracts into the contract management system using CEO-ME.
Can You Filter Search Results and Generate Custom Reports in the Contractor Management Software?
A text-based search and customizable filters can quickly help users find contracts, clauses, and content. You can search by vendor name or contract type, for example.
How proactive and user-friendly is the contract management dashboard? Dashboards allow you to generate reports, analyze data, and share findings. Using a dashboard can increase contract visibility, deadlines, expiry, and auto-renewal dates. A list of finalized contracts should be easily exportable to all necessary stakeholders.
Is the Contractor Management Software Offering Training and Support for System Users?
Software solutions should include tutorials or user guides. The provider should provide user training and support to ensure success and a smooth transition. The provider should also customize the solution according to the company's branding during implementation. The implementation phase for new users may include webinars or document migration services. These services should be offered free of charge by providers.
Is This Contractor Management Software Better Than Others in Terms of Features?
The market is flooded with contract lifecycle management systems, but how do you pick the best? Identify your business's needs.
What is the biggest need for contract signing? Use a solution that integrates electronic signatures.
Want to improve your contract negotiation results? Streamline negotiations with user-friendly portals that offer redlining, commenting, and other features.
Our recommendation is to rely on a solution with flexible, automated workflows. You can narrow your search by comparing the available solutions to pinpoint features you must have and those you can live without.
Can the Contractor Management Software be Customized to Meet My Organization's Needs and Objectives?
Custom dashboards should display key contract dates and other key information. It should be easy to access and have configurable permissions for authorized users. A contract administrator should have access to your dashboard and the ability to collaborate with the software provider to customize your solution. Permissions, role-based accessibility, and access rights should all be customizable. Keeping sensitive data in only the right hands will help you ensure security.
Conclusion
Contracts are often set before work begins and forgotten soon after. Therefore, it is often hard to trace problems to the initial contract. Contracts heavily influence your work's outcome and your business's success. Legal risk, revenue loss, and failure to meet the agreement's objectives are all consequences of bad contracts. A bad contract management practice prolongs the negotiating process, fails to identify inefficiencies, and causes businesses to lose money on penalties, fees, and unmet terms.
Using business management software, you can build better contracts faster. You will often gain insight into other business areas from your contracts. The software equips you to grow your business. By implementing a streamlined, centralized management system like CEO-ME, your organization can ensure that vendor contracts are effective, compliant, secure, and perform to optimized standards. This will significantly reduce the costs of managing vendor contracts.
To explore how a business development software can benefit your organization, try it out for free!