Why Choose Custom Contract Management Software?

Digital documentation of contracts can overcome these challenges through contract management software. By automating contracting, it can eliminate the inefficiencies of the conventional process while ensuring contracts are prepared, negotiated, signed, and implemented on time.

In this blog, we will discuss why you need contract management software including its key features and cost.

What is Contract Management Software?

The software for managing contracts is created to facilitate the creation, negotiation, renewal, and administration of contracts for businesses. It is a vital tool to ensure that every contract in your company meets its objectives and functions efficiently. Improving contract performance helps enforce commercial agreements, improves cash flow, and lowers the chance of non-compliance.

The most essential functions of contract management software are:

• Negotiations: Facilitates seamless collaboration and communication during the negotiation stage.
• Contract Drafting: Streamlines the process of creating contracts by using customizable templates and automated tools for drafting.
• Approval Workflows: Automates the workflow ensuring prompt reviews and approvals.
• Monitoring Compliance: Monitors compliance with the terms of contracts and regulations.
• Centralized Storage: Organizes and stores all contract documents and their versions in a single repository.

Through automation of critical processes in contract management, the software reduces manual errors, improves team collaboration, and provides a complete overview of contractual obligations. This streamlining of workflow enhances overall efficiency and accuracy in managing contracts.

Benefits Of Contract Management Software 

Contract management software has emerged as an essential tool for companies across various industries. It provides multiple features that simplify and improve the efficiency of contract-related activities. The following are some significant advantages these software solutions bring to an organization.

1. Streamlined Contract Management

Manual contract management is often a burden, requiring lengthy paperwork, frequent mistakes, and inconsistencies that could result in costly errors. Manually tracking contract details increases the chance of missing deadlines, inaccurate data entry, and ignoring compliance issues that can impact overall efficiency and accuracy.

Contract management software solves these issues by automating important processes. It is a centralized platform for storing and managing the entire contract's information. This minimizes the chance of mistakes and guarantees consistency. Automated workflows simplify processes like creating contracts, approving them, and renewing them, which makes the whole method more productive and less vulnerable to errors.

In addition, the software provides electronic tracking and monitoring capabilities that enhance monitoring and reporting throughout the contract's life. By eliminating manual processes, the software improves the accuracy of updates, ensures that they are timely, and aids in better decision-making, which ultimately leads to more secure and smooth contract management.

2. Centralized Access And Secure Storage

Contract management software is a central database that streamlines access to every contract document, ensuring that it can be easily retrieved through a single, unifying platform. Centralizing the database eliminates the need for multiple storage options, thus reducing the possibility of losing documents.

Alongside facilitating access and facilitating access, the program incorporates strong security measures to safeguard sensitive data. The confidential data is protected by encryption and stored in secure locations, protecting from unauthorized access and possible breaches. Enhanced access controls allow users to define the permissions for users and control access to ensure that only authorized employees can view or edit important documents.

By consolidating and protecting contract information, the software not only helps in efficient management but also increases compliance and reduces the risk associated with handling data. Centralization is the main benefit, offering operational efficiency and increased data security.

3. Improved Compliance and Risk Management

Contracts need to be regularly updated to ensure they are compliant and cause no penalties and legal risks. A contract management tool can help in tracking compliance metrics. It also flags any potential issues that can lead to non-compliance.

In addition, the software gives early reminders of the contract renewal date and expiration so that you have enough time to update them. With real-time monitoring, audit trails, and version history, contract management software ensures transparency and saves you from legal risks in case of any dispute. 

4. Enhanced Efficiency And Productivity

The software improves efficiency by automating crucial contract management tasks like creating contracts, their approval, and renewal. The automation eliminates the need for manual input and repetitive administrative tasks, freeing up time for employees to focus on more strategic tasks.

For example, contract templates and automated approval workflows simplify the review and creation process, significantly speeding up contract turnaround time. Automated reminders for renewal ensure contract renewals are on time, thereby reducing the possibility of missed opportunities of negotiations. 

Accelerating these processes allows teams to make faster decisions and respond more quickly to emerging opportunities. It also helps resolve issues promptly, contributing to continuous process improvement and overall efficiency.

5. Better Visibility and Control

Contract management software improves transparency and control by centralizing all contract information in an accessible, single platform. This lets users quickly find and examine every contract, monitor important milestones, and ensure compliance with terms and deadlines. Dashboards that are updated in real-time provide current information on contract renewal dates, contract status, and the potential for risks, enabling proactive management.

The software can also provide customizable notifications and alerts to ensure that important dates, like expiration dates or renewals, are not missed. By automating these processes, companies can save money on penalties and missed opportunities. Furthermore, advanced reporting capabilities provide a detailed analysis of contract performance to help businesses make better-informed decisions and maximize contract results.

Key Features in Custom Contract Management Software

Custom contract management software for eSignatures streamlines contract procedures and improves efficiency. Here are other important features and their advantages:

1. Automated Contract Creation

It automates the process of drafting using customized templates and pre-approved clauses, reducing the time spent on manual contract creation and minimizing mistakes. This helps ensure uniformity across documents and speeds up the process.

2. Advanced Approval Workflows

The process for contract approval is simplified by automating the routing, notifications, and monitoring. This feature ensures that contracts are approved and reviewed promptly, reducing bottlenecks and speeding up the overall approval process.

3. Centralized Document Repository

It offers a single, safe place to store every contract document. Centralized storage makes it easier to access and secure. It also minimizes the chance of losing or misplacing documents, making it simpler to manage and locate contracts.

4. Real-Time Tracking and Monitoring

It gives you real-time insight into contract status, important dates, and performance indicators. This feature assists in monitoring compliance, monitoring deadlines, and detecting potential issues earlier, allowing for efficient management and better decisions.

5. Compliance Management

It tracks and monitors compliance with contractual terms and requirements. This feature can help reduce the risks caused by non-compliance. It also decreases the chance of legal disputes while protecting the company's interests.

6. Integration Capabilities

Seamlessly integrates with various enterprise software like ERP, CRM, and financial software. This feature allows data sharing and synchronization across various platforms, improving operations' overall efficiency and ensuring that information is consistent.

7. Reporting and Analytics

It offers comprehensive reports and analysis on contract performance, spending analysis, and process efficiency. This feature assists in making data-driven decisions by providing insight into contract trends and metrics and maximizing contract management.

8. Contract Renewal and Expiration Alerts

It automates reminders for renewing and expiring contracts, decreasing the possibility of missed deadlines while ensuring prompt action. This feature ensures the continuity of contracts and prevents penalties or interruptions to contract coverage.

9. E-Signature Integration

The eSignature feature facilitates the digital contract signing process, eliminating the need to get signatures from each party either manually or over email. It also saves the time and cost of printing, scanning, and emailing the documents. Besides these benefits, legal eSign ensures the signatures are traceable and secure which is otherwise difficult with the paper-based method.

10. Customizable User Permissions

It allows users to set roles and access levels depending on job function and responsibilities. This feature guarantees that sensitive data is accessible only to authorized personnel, increasing the security of information and controlling it.

Factors that Influence the Cost of Custom Contract Management Software

Many factors impact the cost of developing contract management software. The price could be based on various aspects, such as the software development company, the features you require, and the specific needs of your company. These are the most important considerations and information that you should be aware of. 

1. Customization

There could be cost-plus charges if your company requires extensive modification to accommodate certain workflow or compliance standards. If that's your situation, picking the right contract management software capable of delivering this capability is essential.

2. Scalability

Take a look at your business's upcoming expansion. Be sure the contract management software can scale according to your demands without imposing costly costs when you grow. You may also want to avoid being locked into an agreement with a limited service provider if you'll have to transfer your data onto an even more powerful platform later.

3. Total Cost Of Ownership (TCO)

Consider the long-term costs of contract management software, such as maintenance, updates, and ongoing support. Lower upfront costs may not mean a lower TCO. A lack of user acceptance or incorrect data collection could also contribute to TCO.

4. Company Size

The higher the number of users who use the system for managing contracts, the higher you could anticipate the cost. Some providers might offer discounts on bulk amounts of users. Likewise, prices per user could be contingent on the accessibility required. 

In determining the best budget for the contract management software, you must consider every cost element versus its benefits.

5. User Capacity

A significant aspect of the price of contract management software is the extent to which it will be utilized. This varies across industries and between individual firms. Large companies with many agreements with employees, distributors, suppliers, and other parties require a large storage capacity and search capabilities.

In contrast, smaller businesses with less complex business processes will not have to shell out for the same level of performance. Whatever the demands of your business, it's best to choose a system that can streamline your existing processes and adapt to changes in your needs as the company expands. For a cost-effective solution in the long run, your system must be flexible.

6. Features

More features and capabilities usually result in a higher cost for contract management software. You must ensure that your choice of software comes with options that will meet your requirements and avoid paying for features you don't utilize. A few essential features you might require in your contract management software include eSignatures, version control, audit trails, real-time editing, and more. These features streamline contract management processes but can also add cost to it.

7. Integrations

Integrations with platforms your company already uses simplify contract management and make it more effective, making it easier to save time and money. Integrations will allow your employees to share the contract, make changes, and get approvals faster. This approach can significantly reduce the time required for employees to learn your new contract management software. 

Integrations also enable data transfer from one software to another. This can not only help save time by eliminating manual processes but also enhance the precision of the contract management process. It helps keep your teams in sync regardless of the part of the process they're involved in. 

8. Storage Size

Utilizing specialist software for managing contracts or eSignatures gives a central database to store, manage, and archive contracts. Based on the number of contracts you deal with daily, you'll need sufficient storage capacity - which will undoubtedly impact the price. 

Many platforms cost according to the number of documents stored, so it's essential to understand the current contract volume before deciding. It is recommended that you consider your business's expansion since you might want to consider an alternative that offers additional growth space. Many providers provide upgrade options to improve storage space when needed.

9. Security

Some industries have to comply with strict guidelines about document storage. In contrast, other industries require that contracts be protected from unauthorized access. In either case, the importance of security and safety can't be understated. The type of security your software has can significantly impact the price.

Though some platforms on the marketplace could be more secure, different platforms regularly conduct security and safety checks to ensure documents are secured with the latest technology. Options like one-sign-on, multi-factor authentication, and IP whitelisting are essential in terms of security, but they also raise the price. 

Specific platforms are installed on a separate server or on-premises, which will add cost. For digital documentation of contracts, spending more to secure your data could save you from risks.

10. Development Time & Deployment Model

If you are developing a custom contract management software, the development timeline and the deployment method are vital aspects that affect cost and efficiency. Customized software development times differ significantly based on the degree of complexity of your requirements, the features you require, and the project size. The longer time to develop could cause higher costs at the beginning; however, it also permits more extensive modification to meet your individual needs as a business.

The type of deployment method, whether on-premises, cloud-based, or hybrid, significantly impacts the total cost and scalability of the software. Cloud-based solutions typically offer faster deployment times, lower upfront costs, and the advantage of a simpler scaling process as your business expands. On-premise solutions, although more secure, could need a longer implementation time and greater initial investments in infrastructure.

Finding the ideal combination of development time and an appropriate deployment method will ensure that the software you choose is tailored to your current needs and capable of assisting your business as it grows.

Additional Costs Associated with Contract Management Software

In addition to the issues mentioned earlier, several software providers have different fees, which can be annually or monthly. They typically cover maintenance, installation, costs, and support for your system, and even more. The most common charges you might encounter can include:

1. License Fee

The majority of platforms require a licensing fee. This is the initial fee you pay to use the software. It is typically annually or monthly, and the amount can differ based on the features you use. The greater the number of features you need or users who would access the software, the greater is the cost.

2. Add-On Features

Premium features can be purchased at an additional cost to use a wide range of services. Automation, eSignatures, and integrations with third-party providers are a few examples of extra options that could require an additional cost based on the service provider. The fees for these features can vary widely and could be billed per year or every month.

3. Integration fee

Many companies will require an integration charge to connect your software with business processes such as CRMs, etc.

4. Customer Support Fee

Many companies provide customer support for free. However, some software vendors charge an additional fee. Customer support is a crucial element that cannot be taken away. Ensure you know if the application you intend to choose has customer service fees. This will impact your overall costs for contract management software.

Wrapping up

Investing in customized contract management software could be a game changer for your company. By customizing the software to meet your needs and requirements, you can ensure that it's in line with your operational goals and can change according to your company's needs as it grows. 

While the initial cost of custom development could depend on your business's demands, the benefits over time—such as simplified processes, fewer risks of non-compliance, and enhanced operational efficiency—can yield significant returns on investment.

The right choice of software does more than just improve contract management; it helps your business thrive in a highly competitive market.