Producing a contract is a crucial part of any business. It requires skill to pull up a contract that is a win-win situation for all parties. Manual handling of contracts is often inefficient and is prone to errors. This is why a majority of businesses nowadays are turning to contract management system for efficient handling of their contracts.
However, there are still some companies shy away from making use of a contract management system. Most of their concerns arise either from misinformation or knowledge of a bad experience by one of their peers.
Here are some misconceptions that exist with regard to the contract management system.
1. It is Expensive
Expense is a major concern in any business. A lot of companies are reluctant about investing in contract management software fearing the heavy expense such a solution will incur.
The truth is while there are software providers who charge an arm and a leg; there are numerous other options as well. There are several contract management software providers who can customize their solutions to fit any budget. Factors like specific features and functionalities, in addition to the volume of contracts, affect the price range.
Therefore, with some research and negotiation, you can invest in a viable solution that will fit your budget.
2. It is only for big companies
There is a common misconception among most small and medium scale businesses. They assume that companies that work with a large volume of contracts benefit from a contract management system.
Regardless of the size of the company or the bulk of contracts they handle, contract searches, routing, follow-ups and monitoring require a huge chunk of time and effort from the staff. Moreover, a contract lifecycle management system is better equipped to handle this time-consuming process of follow-ups and document tracking more efficiently.
3. Implementation takes a lot of time
It requires considerable time and effort to get an entirely new system up and running. Furthermore, the staff needs to be on the same page and aligned with the new process. Several systems have to be optimized to adjust to the new contract management system. Hence, the end-to-end implementation and set up does take time.
However, these concerns will be assuaged if you choose a contract management system that prioritizes time and has a reputation for delivering before the deadline.
4. Less Control Over Contracts
The reality is the opposite though. A cloud-based contract lifecycle management system increases control over contracts. Because of the emphasis they put on the structure. The structured way of storing the contracts and other pertinent documents helps in locating documents easily.
The plus point is that the performance of the contract management system does not get affected because of the volume of documents it manages.
Contrarily, if you think that the manual process is just as efficient, think about the last time you had to look for a contract. Imagine looking through filing cabinets that are not even properly organized. Tracking contracts and storing them requires a structure that is difficult to manage manually.
5. You have to compromise on security
The unwillingness of businesses in investing in contract management software partly arises out of security concerns. Security is of the utmost importance when it comes to contracts. These documents contain sensitive information that is critical to the business.
A cloud-based solution provides in-depth security to your contracts, which are protected by multiple layers of security to prevent a data breach. Cloud-based servers award role-based access to users who are controlled by the admin.
Two-stage authentication and automatic sign out are some of the security measures incorporated by the contract management system.
There are multiple benefits to switching to a contract management system. Manual processes are not only inefficient but also has severe scalability and usage issues. And investing in an automated system improves workflow, increases ROI, and mitigates legal risks. These positive impacts are enough to realize the truth behind these myths and invest in a contract management system.