Contact us anytime to know more - Abhishek P., Founder & CFO CISIN
ServiceNow Contract Management helps organizations manage contracts and agreements efficiently and securely. ServiceNow dashboard creation serves as a central repository to store contract data such as terms and conditions, vendor details and key performance indicators; negotiate approvals through automatic notifications or renewal reminders; facilitate negotiation/approval processes as well as negotiate/approve negotiations/approved with ease - while improving visibility, compliance and decision making within contracts/agreements more broadly within your business.
What Is Contract Management?
Contract management refers to planning, administrating and overseeing commercial agreements between various entities - customers, vendors, partners or employees of a business - at different stages in their relationships with that entity, such as customers, vendors or employees at each step. Implementation and monitoring contracts from start to finish are crucial; an example could include when an IT services provider wants to offer IT support at their business location.
A company will develop a contract that details the work scope, deliverables and timelines, as well as any additional terms of the project. Once in place, this contract is then managed to ensure performance and then evaluated periodically during execution to make sure all its provisions have been adhered to. Contract management encompasses every stage in the life cycle of an agreement, from creation to implementation and evaluation.
Who Can Benefit From Contract Management Software?
According to the Corporate Legal Operations Consortium, approximately 65% of companies utilize contract management software in some form or another for various business stages and use cases.
Here are a few candidates who could benefit from software solutions:
- Small businesses that regularly issue contracts but lack the budget to hire an experienced contract manager may benefit from employing one-on-one contract managers to assist.
- Large companies looking to optimize the contracting workflow require experts to maximize efficiency.
- Organizations looking to transition their contract management, electronic signature, and secure dedicated storage needs into the cloud environment should take note.
As with other digital software applications, contract management software provides various management and administrative features functional across your entire organization; even without an appointed contract manager, these tools are helpful at every stage in business growth, whether or not there's someone managing contracts directly.
Successful Contract Management Is Characterized By Specific Signs
Contract management solutions should help reduce costs while streamlining contract creation processes. Contract software offers specific relief depending on your type of business. We discussed ways that it could assist.
Software & Technology
Contract renewals with customers are critical for IT organizations. Yet, managing multiple vendor contracts and meeting contractual terms, agreements, and service level agreements can prove challenging. With appropriate contract management software, you can track expiration dates and renewal periods and review the terms of contracts efficiently.
Professional Services
Human Resource departments must manage various contracts, from employment and nondisclosure agreements to employee benefits contracts. HR department managers and legal teams often need approval or participation before entering contracts into force; legal contract management software offers approval procedures that ensure all parties involved have approved them before proceeding.
Retail or Wholesale
Running retail and wholesale businesses can be challenging due to all of the contracts and warranties that must be managed, along with complying with pricing and rebate agreements. All these tasks require constant updates and regular attention to prevent errors that lead to wasted time or cause mistakes. A contract management solution could save you and your documents time as it keeps things secure and organized for record-keeping beginners.
DocuSign Contract Lifecycle Manager provides an all-encompassing contract lifecycle management solution, covering contract creation and signature processes as well as any necessary follow-up during execution - as well as meeting HIPAA compliance. Users create their contracts using Microsoft Word or Google Docs before uploading them for signature to DocuSign CLM.
Understanding The Contract Lifecycle Management
CLM (Contract Lifecycle Management) is an approach that helps companies save both money and time by managing contracts during all aspects of their lifespan. Identifying potential challenges early in the contracting process and mapping each step accordingly ensures active, valid agreements. CLM simplifies workflow for users, contract administrators and legal teams by breaking it into manageable steps that enable faster issue resolution and contract progress along their pipelines.
Contracts that a company must manage vary but may include:
- Sales contracts
- Source agreements
- Purchase and procurement agreements
- Employment Agreements
- Outsourcing contracts
- Registration Rights Agreements
- Underwriting agreements
- Lease contracts
- Consultancy agreements
- Distribution contracts
- Intellectual Property Agreements
- Stock Option Agreements
- Underwriting agreements
- Software Licenses
Business operations at first glance might appear similar across organizations; however, each organization possesses distinct assets necessary for creating successful products or services. Understandably, documents like contracts can quickly become disorganized if not regularly reviewed and assessed. Businesses looking for ways to address these problems have three essential solutions available.
- Hire a Contract Manager
- Adopt a Process of Contract Lifecycle (CLM).
- Try contract management software.
Contract and paperwork management requires time-consuming effort, but by using the appropriate tools and resources, it can become more straightforward.
Also Read: Collaboration At Its Best: Microsoft Teams Integration With Servicenow
The Role Of Contract Management For Business
1. Legal Foundation
Contracts form the legal cornerstone of all successful business relationships. Contracts outline all parties involved, outlining their rights and responsibilities during partnership or transaction processes and setting out rules and expectations regarding interactions such as clients/suppliers/employees or partners.
2. Risk Mitigation
Contracts play an integral part in mitigating risks during business transactions by providing provisions on risk allocation, dispute settlement and liability allocation. By clearly outlining such requirements with servicenow workday integration in contracts, businesses can protect themselves and reduce uncertainty while protecting themselves as much as possible from unexpected outcomes.
3. Structured
A structured contract management system ensures contracts can be created, stored and retrieved efficiently while improving operational efficiencies and saving time by decreasing the effort needed to monitor milestones and track compliance.
4. Cost Savings
Managed contracts can produce cost savings. They enable organizations to negotiate discounts or incentives; businesses may save by renewing contracts on time and enforcing penalty clauses against noncompliance with contractual terms.
5. Accountability and Transparency
Contracts create transparency within business relationships by clearly outlining what each party should expect of the other and encouraging accountability among parties who comply with contractual obligations.
6. compliance
Businesses operating across multiple industries must abide by numerous regulations and standards that must be observed, with contracts often including compliance requirements to help companies comply. Meeting these compliance standards may help avoid legal complications or fines against their business.
7. Dispute Resolution Contracts
Contracts often contain clauses that stipulate how disputes should be handled between parties and can help avoid protracted legal battles while speedily resolving conflicts. Dispute resolution mechanisms defined within contracts can save cost and effort in legal actions while solving conflicts more swiftly.
8. Building Relationships
Contracts can foster long-term business relations among clients, partners and suppliers by being fair, transparent and professionally administered. These contracts establish trust between all parties involved, which is crucial in building long-term business relations.
9. Performance Monitoring
Contracts provide businesses with a way to measure performance through key performance indicators (KPIs), milestones, and other measures that allow them to evaluate how effectively they meet the terms.
10. Data And Insights
Contract management produces an abundance of data that can help unlock business insights. Businesses can identify trends and opportunities by examining contracts; this approach informs strategic decision-making.
11. Documenting And Recording: Keep Records
Contracts serve an indispensable purpose. They document past transactions, commitments and obligations, essential when conducting audits, reporting or researching historical transactions.
12. Gaining Competitive Edge
Effective contract management provides businesses with a key competitive edge. Companies able to effectively oversee contracts can respond faster to market changes, reduce expenses, and build up an impressive reputation of reliability over time.
13. Innovation and Growth Washington
Contracts can support innovation and growth by acting as agreements among partners or joint ventures to foster business expansion and development.
CLM: The Stages Of A Contract
CLM processes often depend on internal processes and who is involved at each step. They become increasingly complex as companies become more extensive and departmentalized; smaller businesses might sign contracts without seeking legal advice beforehand, while larger organizations might employ legal teams as additional oversight.
We will outline the steps typically undertaken during contract administration.
Stage 1
When approaching an agreement with potential clients, vendors, or employees, sales teams, hiring managers, or project stakeholders often request contracts as the next step. Once asked by these parties for one, your designated contracting authority notifies all relevant parties (legal and financial departments in particular), oversees its lifecycle and notifies any stakeholders about potential changes; furthermore, they might send a checklist out or require further documentation to proceed with purchases/expenditures.
Stage 2
A written contract agreement will then be reviewed by project stakeholders, the legal team and the finance team before going back into negotiation rounds if complex terms need to be adjusted further than standard boilerplate contracts can accommodate. A contract manager will work directly with each department involved to resolve outstanding issues that impede its progress as part of this final step in moving the contract to completion.
Stage 3
Once all departments have approved sending out contracts to clients, vendors or employees, contract management professionals should forward them via the contract manager as the primary contact point in CLM. Involving external partners increases exposure through CLM, making contract managers the ultimate go-to person should any issues arise that require external assistance or negotiations with third parties.
Stage 4
In Stage 4, both parties negotiate terms and details for their contract agreement. A contract manager serves as the primary contact between both sides at this point, making sure each has the documents needed to close it out successfully - which may involve multiple iterations of exchanged documents back and forth between stages 3-4 of a contract lifecycle process.
Set approvals for rep/client negotiation guardrails to ensure your team abides by acceptable parameters. No more downloading and uploading documents manually; lengthy emails or offsite messages will no longer be required.
Stage 5
This final stage in contract management ensures all parties involved with a deal are happy with what was originally written as well as any modifications negotiated and agree to sign either electronically or physically if physical signatures cannot be secured for signing, with copies made and distributed among parties involved before final signature is reached. Often, this step can prove challenging when one party remains unresponsive or when new stakeholders enter into negotiations before it is finished; copies should always be available - especially where there has been extensive involvement by one party. WTO Negotiated?
According to our internal data, four of every five contract changes result from delays during the signing process. By keeping up and setting clear deadlines for negotiations and contract signing, contract managers and stakeholders can speed things along faster and get contracts signed more rapidly.
Stage 6
Once all signatures have been collected and signoffs fulfilled, implementation can commence. Contract managers play an invaluable role during this phase. They serve as primary contacts for any issues regarding contractual terms that need clarification, approve invoices and milestone payments, and ensure both parties adhere to their agreements.
Stage 7
Your business contracts should be stored according to company policy and regulations, along with government standards or industry norms, in this final step of contract administration. Specifically, original documents, as well as addenda/modifications, need to be stored or kept up-to-date as part of this step in contract management.
Contract managers are accountable for maintaining and organizing all contract data in an easily searchable format to facilitate audits, negotiations or conflicts with vendors. Filtering tools allow contract managers to easily store documents while monitoring them months or even years post-signing.
Stage 8
As part of Stage 8, contracts should undergo re-negotiation based on expected performance or expiration. Arrangements must be pulled from storage and connected with internal and external parties to either retain existing terms or negotiate new ones. This process may lead to either the establishment of a new contract with an external party or its termination if either company experiences changes in leadership, direction or personnel.
Finalizing the contract lifecycle is critical to organization streamlining. If your business has multiple contracts with similar goals and characteristics, these contracts should be evaluated and optimized based on performance criteria, goals and similarities.
Consolidating multiple vendor agreements into one boilerplate contract that only needs minor alterations is an excellent use of CLM tools Content Reporter; content reporting allows you to identify which sales documents are most successful for each rep, helping create better sales documents in future.
Rebuilding and optimizing documents with servicenow salesforce integration that you rely upon regularly for optimal success will allow your sales team to be on the same page about which documents should be sent at each step of the sales cycle, helping to reduce risks while assuring all contracts contain protective clauses for your organization - something often taken for granted.
McKinsey conducted a study that demonstrated how 8 out of 10 contracts did not include provisions to review pricing compared to industry norms regularly, so contract analyses should focus on uncovering opportunities for improvement both performance-wise and in terms of negotiation terms. Templates and workflows can make contract management in CLM processes simpler.
Servicenow Contract Management Roles
ServiceNow Contract Management includes roles to oversee the contract management process. These roles may include:
- Contract Owner: An individual who oversees all aspects of managing and overseeing contracts from start to finish - negotiation and approval included.
- Contract Manager: Responsible for overseeing the Contract Management Module and assuring accuracy in contract data.
- Contract Approver: An individual responsible for reviewing contracts and giving approval.
- Contract Negotiators: Individuals responsible for negotiating the terms and conditions of contracts with suppliers or vendors.
- Contract Users: Users with access to contractual documents who can view, view changes to, and update them are known as Contract Users.
Organizations have the flexibility to tailor the roles and responsibilities to fit their unique requirements, with users assigned one or more parts based on their job functions. ServiceNow Contract Management Module offers an intuitive user interface with permission-based controls, helping organizations effectively assign roles.
ServiceNow Contract Management Workspace
ServiceNow Contract Management Workspace can bring several advantages to an organization's operations, including:
- Centralized Repository: The Contract Management Workspace is a centralized repository that stores and tracks contract details for easy management and contract access.
- Contract Management Workspace: Organizations can now get an all-inclusive view of their contracts in one convenient place, providing greater contract visibility and aiding informed decision-making processes.
- Process Simplification: The Contract Management Workspace streamlines contract administration by decreasing the manual effort required and increasing efficiency. It automates repetitive tasks like contract approvals and renewal reminders.
- Contract Management Workspace: Enhancing compliance. The Contract Management Workspace provides real-time insight into both contract obligations and performance.
- Better Contract Negotiations: The Contract Management Workspace offers tools and workflows to support contract negotiations, enabling organizations to secure better terms with vendors and suppliers.
- Customizable: The Contract Management Workspace can be tailored to the unique requirements of an organization's contract portfolio, accommodating custom fields, workflows and roles based on an organization's wishes for effective management of its contracts. This provides maximum flexibility.
ServiceNow Contract Management Renewal
ServiceNow Contract Management Renew is an add-on module of ServiceNow's Contract Management Module designed to assist organizations in overseeing contract renewals. The renewal process typically entails sending reminders, reviewing contracts before expiry, negotiating renewal terms and conditions with suppliers, and updating contract data on the ServiceNow platform.
ServiceNow Contract Management Renewal can be automated to reduce manual work and risk associated with noncompliance or contract lapse. The ServiceNow Contract Management Module features automatic notifications, renewal reminders and customizable workflows, which assist organizations in efficiently handling contract renewal.
Challenges of Contract Management
Many organizations struggle to manage contracts despite their importance due to various challenges:
- Manual Processes: Hand-managing contracts is time-consuming and subject to error, making tracking versions of agreements challenging. Legal Risks can arise should contractual obligations not be adequately fulfilled.
- Lack of Visibility: Without an integrated contract management system in place, organizations lack real-time insight into contract performance.
- Communication Obstacles: Lacking a central platform may make collaboration among stakeholders challenging.
ServiceNow's Contract Management module
ServiceNow's Contract Management module delivers features designed to address many challenges organizations encounter when managing contracts effectively. Discover its many capabilities today - you may discover new solutions.
- Easy Contract Authoring and Creation: ServiceNow makes contract creation and authorship simple by using its template library, making the creation process straightforward according to your organization's standards and automating features for populating contracts with relevant information, which reduces errors while saving both time and effort.
- Contract Lifecycle Management: This platform excels at overseeing the life cycle of contracts by automating milestone tracking, renewals and compliance monitoring - essential functions for meeting contractual obligations.
- Collaboration and Communication: ServiceNow promotes collaboration among various stakeholders by offering a central platform that allows teams to work on contracts collaboratively while communicating amongst themselves, exchanging input on contracts explicitly tailored for every person or group, thus meeting everyone's requirements and preferences.
- Visibility and Reporting: Keeping track of contract performance on an ongoing basis is vitally important to making decisions effectively, which is why ServiceNow provides powerful reporting and analytical tools that give an in-depth view of your contract landscape.
- Integration With Other Business Applications: ServiceNow doesn't exist as an isolated solution; it works seamlessly and cohesively with other business apps to form an efficient ecosystem of productivity and collaboration.
Case Studies
ServiceNow's real value in contract management can be seen through real-world examples from many organizations that have utilized its service; one multinational corporation reduced its contract management processes by half while also experiencing a 30% decrease in disputes related to these contracts.
Comparative Evaluation with Other Contract Management Solutions
ServiceNow stands out as unique because of how closely its IT Service Management and Automation offerings integrate for an expansive view of business operations. Furthermore, ServiceNow's versatility allows it to automate entire processes more than standalone contract management software can.
Security and Compliance
ServiceNow emphasizes compliance and security, adhering to industry regulations to protect your contract data.
Cost considerations
Before purchasing ServiceNow, it is vitally important to evaluate its return on investment (ROI). With automation and efficiency helping contract management processes run more smoothly over time, investing can result in considerable cost savings.
User Experience and Training
ServiceNow stands out by being user-friendly; its intuitive user interface and support make the transition between platforms relatively seamless, while training and onboarding programs provide your team with everything it needs to use it effectively.
Future Trends in Contract Management (CM)
Contract management solutions have become an invaluable asset in today's rapidly evolving business environments, with ServiceNow's contract management offerings continually adapting to stay abreast of emerging trends and meet business requirements.
Conclusion
ServiceNow has proven itself as an indispensable contract management solution in numerous organizations, thanks to its powerful features, seamless integration into other processes and focus on compliance and efficiency. Businesses looking for simplified contract administration workflows will likely opt for problem management servicenow due to its automation features, collaboration tools and real-time insights it can offer them.
ServiceNow's Contract Management Module is an invaluable way of ensuring accuracy and efficiency within today's fast-paced business environments. By automating contract administration tasks with ServiceNow, you will no longer experience manual administration hassles.
