By Thomas Schneck, DocuWare – Misaligned and poorly constructed contracts create both increased cost and increase risk for many organizations. According to the International Association for Contract and Commercial Management:
- 77% of companies “frequently” suffer from misaligned contract scope and goals.
- 55% experience confusion in contractual responsibilities.
- 48% experience have challenges tied to price changes and delivery terms.
All of this is a direct byproduct of a manual and adhoc approach to contract management. Getting rid of the paper through digital contracts represents a key discipline to maximizing financial and operational performance, effective subcontractor management and minimizing contract risk (e.g., letting contracts that are not valuable auto-renew, continuing to pay on cancelled contracts, letting valuable contracts lapse).
There are three main elements in an effective enterprise contract management strategy:
1. Getting from idea to agreement