Contract management is the comprehensive process of handling contracts from their inception through execution, monitoring, and renewal. It encompasses numerous tasks, including drafting, negotiation, compliance tracking, and risk mitigation. The key to successful contract management is the presence of a well-structured and easily accessible contract repository.
A contract repository is a centralised digital database or system that serves as a secure and organised repository for storing, managing, and accessing all types of contracts and related documents within an organisation. It acts as a comprehensive and structured storage solution specifically designed to house contracts, making them easily searchable, accessible, and traceable throughout their lifecycle.
This differs from traditional file storage in that it is purpose-built to store and manage contracts, offering advanced features such as automated version control, contract-specific search capabilities, and alerts for critical dates and milestones. A contract repository offers a more structured and optimised approach to managing contracts, whereas historically, traditional file storage is a broader and less tailored solution for general file management.
Maintaining a centralised, single source of truth for your contracts is not a new idea. However, while the days of enormous filing cabinet rooms have gone, the benefits of maintaining a digital contract repository for your digital contracts (and digital copies of your wet-ink contracts) include:
Contracts are easily searchable and retrievable, reducing the time and effort required to locate specific agreements.
Centralised storage ensures that all stakeholders have access to the latest versions of contracts, fostering transparency and collaboration.
Automation of workflows, approvals, and reminders simplifies the contract management process.
Clear visibility into contract statuses, milestones, and key dates ensures timely actions and renewals.
Enforces contract policies and compliance standards, reducing the risk of non-compliance or breaches.
Data analysis capabilities help identify potential risks and opportunities for optimisation.
An ideal contract repository should have the following key features:
Advanced Search and Retrieval: The repository should have robust search capabilities, allowing users to quickly find specific contracts based on criteria such as keywords, dates, parties involved, or metadata.
Version Control: The ability to track and manage different versions of contracts is essential. Version control helps maintain a clear audit trail and ensures users are always working with the latest version.
Integration Capabilities: Integration with other tools such as e-signature platforms, CRM systems, or project management software enhances the efficiency and effectiveness of the contract management process.
Alerts and Notifications: Customisable alerts and reminders for critical contract dates, such as renewal deadlines, milestones, and compliance requirements, helping prevent missed opportunities and contractual breaches.
Security is paramount when it comes to contract repositories to protect sensitive and confidential contract data. Here are some key security considerations:
Role-based access controls
Implementing role-based access controls allows you to restrict access to contract data based on users' roles and responsibilities within the organisation. Only authorised personnel should have access to specific contracts or features.
Encryption and data protection standards
In a time where more and more contracts are being handled over the internet or on cloud-based solutions, strong encryption protocols (e.g., SSL/TLS) secure data transmission over networks. Employing encryption at rest to safeguard data stored within the contract repository is important. This ensures that even if physical access is compromised, the data remains unreadable without proper decryption keys.
Backup and disaster recovery
Regular data backups and disaster recovery plans can protect against data loss due to unforeseen events such as hardware failures, natural disasters, or cyberattacks. Testing backup and recovery procedures ensures that data can be quickly restored in the event of a breach or data loss. These measures can reduce the risk of a costly ransom should you come under attack.
Even though AI has not been around for long, it is rapidly starting to gain traction in the context of contracts and contract repositories. It helps by automating tasks such as contract tagging, predictive analytics for renewals, and sentiment analysis, thereby enhancing contract management efficiency and enabling data-driven decision-making. It also enables natural language search, automated document generation, and contract summarisation, making contracts more accessible and actionable for users while minimising manual labour and errors. AI's contribution to contract repositories lies in streamlining processes, improving compliance, and unlocking valuable insights from contract data.
Choosing the appropriate contract repository is a critical decision that can significantly impact your organisation's contract management efficiency and overall operations. The evaluating criteria for this decision is relatively consistent across all forms of legal software. If you are considering adopting a digital contract repository then you might find our article on how to choose the best legal automation software useful. To make an informed choice, you should consider the following factors:
Start by assessing your organisation's specific requirements and objectives for contract management. Identify the types of contracts you handle, the volume, and the complexity of your contract portfolio.
Consider the workflows and processes involved in your contract lifecycle, including contract creation, negotiation, approval, and compliance tracking.
Determine your organisation's compliance and security requirements, as these may vary based on industry regulations and company policies.
Understanding your unique needs will help you select a contract repository that aligns with your goals and can adapt to your specific challenges.
Evaluate if the contract repository will likely be able to accommodate your organisation's growth. It is best to opt for a system that can handle a growing volume of contracts and users rather than find yourself stuck with something that becomes outdated and unfit for purpose within a couple years.
Consider the level of customisation you require for your use case. Some functions will find a standard out-of-the-box repository will be the best choice for them as the more complexity they require, limits their options and makes it more complicated for their team to adopt the system. However, if your organisation requires unique contract templates, approval workflows, or reporting requirements, the ‘best fit’ contract repository may necessitate a high degree of configurability.
Determine if the repository can integrate seamlessly with your existing software systems and tools, such as CRM, ERP, or e-signature platforms. Integration capabilities are crucial for efficient data exchange and workflow automation. In many cases, the ‘best fit’ contract repository system will also offer e-signature functionality, like Plexus.
Conduct a thorough evaluation of contract repository vendors. Consider factors such as their reputation, track record, and experience in the industry.
Review the vendor's security measures, data protection policies, and compliance with relevant regulations, especially if handling sensitive contract information.
Request references and speak with existing customers to gain insights into the vendor's customer support, responsiveness, and the overall user experience.
Assess the vendor's pricing structure and total cost of ownership, including any hidden fees or ongoing maintenance costs.
Look for a vendor with a commitment to product updates and improvements, as contract management software is a long-term investment.
Consider the vendor's training and onboarding support to ensure a smooth transition for your team.
You can use Plexus’ RFP template as a guide to assessing your suitability to Plexus as a comparison to the variety of legal tech solutions on the market.
Migrating existing contracts to a new repository requires a systematic and managed approach. Start by assessing your current contracts, define clear migration objectives, and develop a detailed plan. Prioritise contracts based on importance, clean and standardise data, and choose appropriate migration tools.
Ideally your tech platform will allow you to bulk upload your existing documents into the new repository. This platform will identify valuable metadata - such as counterparties, contract value, dates and key terms - which will allow to to easily find the document, and include it in relevant reporting later on.
We recommend testing throughout the migration process, maintaining a backup of the original data and keeping comprehensive documentation for future reference. These best practices ensure a smooth and successful contract migration while preserving data integrity.
Training and onboarding are crucial to efficiently utilise new contract repository tools. They equip users with the necessary skills and knowledge to reduce errors, enhance productivity and accelerate tool adoption. An investment in training not only maximises the benefits of the tools but also fosters a culture of continuous improvement in contract management processes.
As New Zealand energy company Powerco has discovered through the adopting Plexus, the real indicator of how successful a new legal technology solution is will come down to how effectively the company can get onboarded and begin to use it as part of their day-to-day operations.
Here are two of the biggest takeaways from Powerco's experience implementing new software:
Trial Super-Users : Prior to a broader rollout, identify a team of "super-users" who can familiarise themselves with the new system and serve as advocates for it within the organisation. This approach helps anticipate where additional training or context may be needed.
Personalised and Fun Training : Recognise that not all users are technology-savvy. Make training engaging and relatable by using analogies and creative approaches. In this case, comparing the contract process to making a pizza added a fun and memorable element to the training.
Maintenance and regular audits are indispensable for ensuring the continued effectiveness of a contract repository. Regular check-ups help identify outdated contracts, purging redundant files, and updating contract templates, ensuring that the repository remains up-to-date and organised. By conducting routine maintenance and audits, organisations can proactively address compliance issues, mitigate risks, and maintain the accuracy and relevance of their contract data, ultimately supporting efficient contract management processes.
Implementing a contract repository involves financial considerations, and understanding the Return on Investment (ROI) is crucial. While the initial investment may seem substantial, it's essential to recognise the potential long-term benefits and cost savings that a contract repository can bring to an organisation. A well-managed contract repository not only enhances contract management but can also result in significant savings and efficiencies.
A well-structured contract repository is the foundation of efficient contract management by ensuring contracts are easily accessible from the one centralised location. It provides enhanced organisation, streamlines the contract lifecycle and enables data-driven decision-making. When combined with robust security measures and with the integration of AI capabilities, a contract repository becomes a powerful tool for organisations to maintain control over their contracts, mitigate risks, and drive business success. Investing in the right contract repository can bring significant benefits and efficiencies to an organisation, making it a worthwhile investment for effective contract management.
A contract repository is specifically designed for storing, managing, and accessing contracts and related documents with contract-specific features, while a document management system is a broader platform for organising various document types, lacking contract-specific functionalities like alerts and version control.
The frequency of auditing your contract repository depends on your organisation's needs and contract activity, typically conducted annually or semi-annually to maintain data accuracy and compliance.
A cloud-based contract repository can be a safe place for sensitive information if you choose a reputable provider with strong security measures, including encryption, access controls, and compliance with data protection regulations.
To ensure a smooth transition when switching contract repository platforms, follow these steps:
Plan the transition carefully, defining objectives and timelines.
Migrate existing contracts systematically, ensuring data integrity.
Train your team on the new platform.
Conduct thorough testing before full implementation.
Monitor the transition process and address any issues promptly.
Yes, you can integrate your current tools and software with a new contract repository if the repository offers dynamic integration capabilities, allowing seamless data exchange and workflow automation for improved contract management efficiency.
Plexus helps everyone in your business execute legal tasks with certainty and speed. Build self-service workflows for routine legal tasks, accelerate your contract lifecycle, and bring clarity, transparency and swift resolutions to legal matters.
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