Whatever your industry, rules and regulations are constantly shifting playing field. They come and go, sometimes unnoticed. Staying on top of the changes means having the most agile contract management approach possible — a fact that’s clearly on the rise. Survey after survey from various analyst firms and consultancies show that contract compliance and management is a growing area of concern. Just as important, if not as urgent, is the fact that good contract governance is also good for business.
The main benefits often attributed to contract management are providing efficiency and speed to the contract process through automation. A PayStream Advisors study found that 62% of survey respondents noted faster negotiation cycles as the primary benefit of contract management software.
Contract compliance – a critical concern.
With regulatory oversight increasing across many industries – particularly those directly affected by healthcare reform, financial legislation, and environmental changes – the consequences of not achieving adherence are increased risk and potential profit loss. Based on the current business environment, the long-term benefits of contract management may be more strongly rooted in the ability to manage risk and contract compliance than even improving efficiency.
Today’s organizations no longer have the luxury of choosing to implement a compliance program, and therefore need the right checks and balances for managing their compliance requirements. Manual contract processes don’t cut it; any robust program invariably has to include contract management. In this regard, going back to the PayStream Advisors study, 41% of survey respondents noted managing compliance, with policies and regulatory guidelines, as the second highest benefit of contract management.
From a contract process perspective, managing contract compliance requires the ability to easily break down and audit how contract stakeholder demands are being addressed and contracts adhere to regulatory mandates. As the foundation of every business relationship and thereby every financial transaction, visibility into contracts and how they are administered is core to compliance management.
Consider cybersecurity, GDPR, trade tariffs (or not), the growing gig economy, tax reform — this list is endless. In a global economy where rules can be murky at best, increasinging complexities around varying compliance regulations worldwide have pushed organizations to increase investment in risk assessment and oversight. One of the biggest, most pervasive problems around legislation and regulation, is that far too often organizations leave compliance until the last minutes, and subsequently suffer adverse consequences.
Given the volatile regulatory environment and focus on guidelines and enforcement, contract oversight has become essential. As a result, contract management solutions are typically employed to address the demands for demonstrating proper contract governance and process auditability.
How is your organization managing contracts? What is your backup plan if you are unable to produce contracts or provide adequate evidence of meeting compliance? If you are still relying on spreadsheets, word docs and non-integrated solutions, check out our host of contract management resources to get a deep dive into how and why cloud-based contract management should be in your near future.
If you’d like to skip the resources and get right to the demonstration, contact us to schedule a personalized look at how Contract Management on the Determine Cloud Platform can help you achieve the contract agility you need.