While contracts are such important documents, few companies can confidently claim that they have full visibility into all their agreements or on the fulfillment of what was negotiated.
Sometimes this lack of transparency becomes literal and its difficult to even find the documents.
According to a research published in the Journal of Contract Management, 71% of the companies interviewed could not locate at least 10% of their contracts.
Agents of all sizes, operating in the most varied sectors of the market, have in common a considerable difficulty in monitoring, with quality, the execution of agreements. This lack of transparency is generally associated with the digitization stage of operations and can manifest itself in at least two degrees:
- No digitization: The company still deals with contracts and physical files. This stage is less frequent, especially after the COVID-19 pandemic.
- Disjointed digitization: There is digitization, but multiple software is still used throughout the contract’s lifecycle. From text editing programs, such as MS Word, emails, electronic signature software and accompanying spreadsheets in systems such as MS Excel;
In all these cases, the management of the agreements signed by the company is sub-optimal, which undermines its performance in the market. According to KPMG data, between 17 and 40% of the expected value of the contract can be lost due to inefficient management practices.
In today's text you will understand what it means to manage a contract, and you will also get to know the specific application of netLex to the management of these documents.
What it means to manage a contract
Managing a contract involves two main dimensions: obligations and information:
- Obligation management: contracts are bilateral legal transactions that, in general, establish benefits and considerations for the parties. In this dimension, management means mapping, planning, executing or monitoring the fulfillment of all these obligations, in the manner and within the terms that were negotiated;
- Information management: contracts are also sources of information. In this dimension, management also means extracting from the document all the data that are relevant to individualize it among other instruments, to guide the performance of other areas of the company or to support decision-making.
When these two dimensions are well executed, the value of contracts is preserved and, in general, the company gains in efficiency and intelligence.
Otherwise, the business will face some considerable challenges. Loss of communication, opaque workflows and difficulty extracting data for management are just some of the main points of attention. Learn more about these and other situations to be avoided at: Top 6 most common inefficiencies in contract management and how to solve them.
To achieve more positive results, digitization is a powerful ally. netLex is built to make technology available to your company, in a simple and agile way. See below the four differentials of the netLex for contract management.
1. Create contracts from scratch or register agreements already made
With netLex it is possible to manage contracts created on the platform, from drafting, through signature, to fulfillment. To understand the full lifecycle perspective of these documents, see CLM: What It Is and How the Technology Can Benefit Your Business.
However, it is also possible to manage, in the software, agreements that were not originally signed in this way. Just fill in some information in a simple and intuitive questionnaire and that contract can already be managed in the platform like the others.
This puts the digitalization and management of your company’s legacy within reach, as well as the administration of contracts based on drafts from third parties.
2. Work with your own or third-party drafts
It is very common for contractors to have standard drafts.
When the party works with its own contract templates on the netLex platform, it is possible to automate the steps of requesting and preparing documents, structuring them fully within the system. Thus, the administration phases of what was agreed follow smoothly on the platform.
However, even when the company works with drafts sent by the counterparty, it is feasible to structure the management of obligations and information in the system. This is because, as seen in the topic above, it is possible to register the agreement in the software, including all relevant data for monitoring obligations and generating intelligence.
3. Always have complete and updated information
netLex helps you make the management of your contracts simpler. Therefore, all the information your team needs to manage these documents efficiently is gathered in an intuitive dashboard.
This data is immediately associated with each contracted party. There, employees will be able to check information regarding installments, follow up on terms of validity, include data for evaluating the quality of suppliers and deliveries, and much more.
As this information is automatically extracted from the questionnaires on the platform itself, the chances of human errors are reduced, especially in transcription activities.
4. Active follow-up with alerts and warnings
To further simplify the activity of managing your company's contracts, netLex also automatically issues alerts on relevant dates for compliance with the agreement. Thus, the platform helps employees to actively monitor the most sensitive point of these documents: deadlines.
This not only prevents the loss of these time frames, but also removes the risk of fines and other penalties that add unnecessary costs to companies and strain their partnerships.
Efficient contract management with netLex
There is little point in all the effort devoted to drafting, negotiating and reviewing contracts if, in addition to signing, attention is not paid to the fulfillment stage. The lack of visibility into this essential moment in this document’s lifecycle reduces the value generated by them, harming the results expected by the company as a whole.
With netLex it is possible to structure the administration of both the obligations and the information contained in these important instruments. With agile implementation and reduced costs, this proposal simplifies the task of managing contracts, optimizes the work of employees and enhances data extraction, in addition to avoiding the risk of human errors or missed deadlines.
Want to know more about the Contract Management Solution? Get in touch with our experts now!