We test and compare five contract management platforms that provide complete collaboration, control, and auditability into the end-to-end contract life cycle.
Contracts are core to most business relationships. Whether initiated among a team of lawyers or simply representing the agreement between a salesperson and a customer, contracts spell out how business will be done: the how and why of generating revenue, and what each party’s recourse might be if outcomes don’t happen as expected. Yet, with all of this weight behind them, it’s surprising how many organizations manage their contract processes with a haphazard combination of emails and text documents, with varying document formats and stored in multiple locations, many of which are unknown to any but those directly involved in the relationship.
Software-as-a-Service (SaaS) platforms have revolutionized this process, having created the modern contract management industry in the process. Contract management software unifies all of the parties, contracts, and versions involved in contract negotiations in a trusted medium in which all parties see changes and can track the timeline of a contract from inception to signing. The best platforms, like many of those reviewed in this roundup, also provide detailed reporting and analytics, intelligent notifications, and a wealth of ongoing management and workflow automation features to boot.
These digital services also range in complexity. Some platforms have broader applicability and can be completely customized depending on an organization’s needs. Others hone in on simplicity, servicing a few select contract management use cases and business verticals. In this roundup, we’ve reviewed products on both ends of the spectrum. Depending on your organizational requirements and contract management needs, any one of these platforms has the potential to transform the way your business handles contracts.
In the past, contract managers often kept all of their documents in physical file cabinets and maintained lists or spreadsheets of an entity’s different agreements, with a few key terms and dates noted.
This style of contract management can lead to a host of problems. Contracts could be misfiled or taken from the cabinet and never returned. The contract manager could leave the organization after implementing a system that does not make sense to future managers. Audits could paralyze the manager with extraordinary amounts of work. Records could be too numerous to effectively manage. This could result in costly, unintended renewals to automatically go into effect or certain intellectual property (IP) rights to lapse.
The heavy burden of contract management—and the risk that purely human management poses—has led many entities to implement contract management systems. These services often promise time savings for managers, long-term reduction in costs, increased auditability, future stability, and reduction in risk.
In response to the increase in demand, a host of contract management systems have entered the market. Hundreds of contract management systems now exist. They all offer services that help distinguish them from their competition, while ensuring that the core needs of a contract manager are met.
In today’s market, contract management systems can take many forms. Some are for the sole proprietor who’s trying to keep track of the few core contracts that keep his or her business afloat. Others are for large teams who are maintaining the thousands or even millions of contracts that accompany multinational corporate behemoths. Financial and legal departments are, unsurprisingly, the most prevalent users of contract management software. However, these solutions extend into a number of other business scenarios as well.
Sales teams might integrate a contract management system with their customer relationship management (CRM) platform to manage sales contract renewals and negotiations on anything from manufacturing contracts to car leases. Businesses might employ contract management software in the supply chain to handle supplier and distribution deals with vendors or tie into all of the contracts that keep inventory stocked and retail operations smoothly running.
All contract management systems help departments tied into their enterprise resource planning (ERP) operations to manage agreements with third parties. A company’s human resources (HR) department might integrate its HR information system (HRIS) with a contract management platform to automatically handle employment contracts, terminations, and employment and benefits agreements. The use cases go on and on. Contract management is useful just about everywhere in a business.
At its most basic, contract management often centers on four key functions: contracts must be stored, key provisions must be tracked, a system must exist to find a contract based upon specific criteria, and information contained within or implicated by the contracts must be understandable or reportable. The abridged version: Contracts must be stored, tracked, searched, and reported.
These core functionalities are often what drive the features of the different contract management systems on the market. Nearly every system offers an extensive repository that holds copies of contracts (often remotely) in virtual file cabinets so the documents can never be lost. The systems often offer the ability to input data related to the contract in tags and key terms so that information can be quickly discovered and alerts can be set to warn managers of impending, important events. The data added to the system for tracking purposes usually also serves an additional purpose: to facilitate the finding of particular contracts or groups of contracts that meet certain criteria. Lastly, that contract data can be aggregated in numerous ways to help give a bird’s-eye view of the state of the entity’s contracts.
For the contract management systems we reviewed, the greatest emphasis in each review was placed on these core functions. All of the following questions helped guide the review process in order to provide a common core upon which to evaluate. Namely:
However, beyond these core functions, contract management platforms have evolved a great deal since the first time we tested these products. These platforms have become full contract life cycle management solutions. More advanced contract management features they now have include rich editing, formatting, and document management capabilities as well as customizable templates for repeatable contract creation. Many of the platforms feature more polished user experiences (UXes) with drag-and-drop functionality, action-based triggers, and automated logic to facilitate smarter workflows and notifications. Plus, many offer granular access control for various users and parties.
Auditability and dynamic multi-party collaboration are also key and included in many of these systems. The best contract management software gives both internal users and external parties permissioned ability to make changes to different versions of contracts, chat and comment on specific provisions to negotiate terms, and go through the signing and execution process—all in one place. To do this, however, a full audit trail is required. This audit trail should include inline change management and annotation, version control, and a full transaction log that shows every change made to every single contract and by whom.
We found how each platform tackles electronic signing can also vary. Some solutions offer native e-signing within the product while others offer integrations with services such as Adobe Sign and DocuSign. Still other vendors offer both options and let the organizations choose the e-signing option that works best for them.
Poor contract management could be costing your business money. According to a recent report from SpringCM, 64 percent of companies say that contract approval processes are causing deals to stall. The biggest barrier faced by companies, according to the survey, is the lack of processes to manage and move along contracts.
