Reporting and analytics have become the most important features of contract lifecycle management software. By generating periodic reports, and that too automatically, the software helps users stay updated at all times regarding the performance of the contract. There are many ways in which reports and analytics can help organizations. This post is about some of the ways this happens.
Contract Status: Contracts are complex, and have to be looked over by multiple stakeholders across different departments before they are sent to the external party for approval. As a result, sometimes, contracts are stuck in individuals’ inboxes without moving forward, either because the user has too much work on hand to go reviewing the contract, or because the user is lazy. This leads to a breakdown in the process, which could result in the contract being shelved. On the other hand, if the parties are kept informed regarding the status of the contract, they can take the necessary actions in time, leading to contracts being completed on time. The fact that this happens automatically without anyone poring over these contracts makes this just that much more valuable.
Close to this contract status report is the activity report which is also generated automatically. This report tells the senior management and the administrators the different kind of actions that have been performed on each contract and the actions that have been pending.
Contract expiry report: This report tells the senior management when the contract is likely to expire and therefore when the contract is to be renewed. While the administrators can set the date for the contract to be delivered to them, it is usually a good idea for the report to be delivered at least three months in advance so that users can understand the action to be taken on the contract, whether it has to be renegotiated or simply renewed or whether it is supposed to go into expiry.
Negotiation times: Contracts are the end result of negotiation processes which are often lengthy, and therefore, must be treated as such. What’s more important than the document is the terms in the document, and this is where negotiation comes in. Often, these negotiations happen in multiple phases with multiple back-and-forths between the parties. Ideally, organizations would like to keep these to a minimum. Therefore, it is a good idea for organizations to evaluate how much time it takes for these negotiations to happen so that they can implement measures to reduce this time. Knowledge and intelligence of the interest of the other parties and how far the firm is willing to go will allow them to negotiate better and quicker. This admin time is one of the biggest costs for the organization, and this must be kept to a minimum.
Contract compliance: Just inking a contract does not mean automatic compliance with it. Nor is there any point in not knowing about such breaches of the contract immediately. What firms need is a robust mechanism that alerts them as soon as any breaches in contracts happen. This is where the contract compliance report comes in handy. It alerts the firm when the other party breaches the terms of the contract, and gives them the heads up they need to take action to reduce the impact of the breach or renegotiate the terms of the contract. Of course, some breaches of contract might be mundane and would not call for the cancellation of the contract. In such cases, it would be wiser to renegotiate the terms to include the terms of the breach so that they would become a standard part of the contract going forward. Contracting is not all about our firm; a major stakeholder is the other party as well. As such, it is necessary to keep an eye on contract compliance to ensure that both parties are pulling their weight.
Another important report to run on a contract is the risk status report which deals with the risks that the firm can incur in case of non-compliance with all the terms of the contract. Firms must ensure that risks are kept to a minimum, and by running this report, they can understand the risks and the penalties for the risk.
All in all, reports using online contract lifecycle management software help organizations improve their contract performance and give them more clarity into how they can enhance their contracting going forward.