Your contract management system is important. Contracts are the backbone of business relationships, defining the terms of engagement, and setting the foundation for operational success. But if your people can’t find the contracts and information they need--or worse, they're missing key dates, frustration and costs can build quickly.
That’s where a contract management system comes in.
Contract management systems put all your contracts in one place, creating a single source of truth, managing important dates and granting secure access to contracts and data.
But where to start?
Companies first starting out with contract management are at a crossroads. Do they make do with cobbled-together piecemeal tools? Do they start from scratch and DIY their own solution? Or do they invest in a dedicated Contract Management Software?
Here’s everything you need to know about Contract Management Software vs a DIY solution.
Table of Contents:
Common Complaints about Home-grown Contract Management Solutions
Risks of Using SharePoint, Dropbox, or Google Drive as a Contract Management System
How Much Does a Contract Management Solution Cost?
How long does it take to get started with a CMS vs. Building Your Own?
What Resources Do You Need to Build Your Own Contract Management Tool?
Contract Management Software Can Grow with Your Organization
Resources for Finding an Easy Affordable Contract Management Software
Discover ContractSafe: An Easy, Affordable Contract Management Software
TL;DR
- DIYing a new contract management tool is more expensive than you think.
- It takes a lot to train your team and get everyone up to speed.
- It's glitchy and slow to update.
- Dedicated contract management tools are more affordable than you think.
Common Complaints about Home-grown Contract Management Solutions
We work with a lot of companies just getting started with contract management. Some are moving from physical copies and filing cabinets. Some just have everything saved on their desktop. Others have been using tools like Dropbox, Sharepoint, or Salesforce to store all their documents. And many are moving off of home grown systems!
We’ve heard it all, but here are some of the most common complaints:
- We can’t find what we’re looking for
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Risks of Using SharePoint, Dropbox, or Google Drive as a Contract Management System
SO THE SCOPE OF THIS ARTICLE HAS CHANGED FROM WHAT I PROPOSED. IT'S NOW MUCH BIGGER AND COVERS DIY TOOLS AND ALSO BUILDING AN IN-HOUSE SYSTEM (USING SHAREPOINT OR OTHER TOOLS). I THINK IT MIGHT BE BETTER TO SPLIT INTO TWO ARTICLES AS THE AUDIENCES ARE DIFFERENT (AND THE ARTICLES WILL BE SHORTER/MORE FOCUSED).
Dropbox is an affordable file storage platform that many freelancers are familiar with. And since SharePoint is often included with an Office 365 subscription (and Google Drive is included in with Gmail), they’re a common choice for teams first trying out digital contract management. They’re convenient and widely available, but they has some serious limitations:
- Limited functionality: While suitable for basic file storage and sharing, SharePoint. Google Drive and Dropbox lack the advanced features (LIKE WHAT--YOU CAN'T JUST SAY THIS AND NOT PROVIDE EXAMPLES. AI, Date Alerts, Reporting, Summary Pages, Approvals, E-signing...) necessary for effective contract management.
- Difficulty in document retrieval: Despite being a file repository, Google Drive's shared nature can make it challenging to search for and access specific documents, including the most current versions of contracts. (THEY ALSO DON'T OCR DOCS IN MOST CASES SO THEY REQUIRE CRAZY NAMING CONVENTIONS AND
- Folder system constraints: Users may find themselves restricted to a hierarchical folder system for organizing legal data, hindering efficient access and overview of contract scope.
- Security concerns: SharePoint's security settings often offer binary access permissions, leading to increased risks of unintended alterations to important documents due to numerous users accessing the same files.
- Manual approval workflows: Approval processes in any of these systems are typically manual, relying on forwarded emails and signatures for the latest versions of agreements, making it prone to errors if older versions are circulated or attachments are lost in spam filters.
- Limited exploration of data: Contract documents stored as static PDFs in SharePoint or Dropbox limit the ability to extract valuable business intelligence before making decisions.
How Much Does a Contract Management Solution Cost?
A DIY solution might seem cheaper at first, but there are several factors to consider. Contract management software pricing can vary widely, so it’s important to find one that fits your needs.
Check out this buyer’s guide for helpful price points to get a feel for how affordable some contract management solutions can be.
You also have to consider the Total Cost of Ownership, not just the initial investment.
Initial Development Costs
Building a custom contract management system from scratch is a significant financial undertaking. It requires a substantial upfront investment in terms of software development, including hiring skilled developers, project managers, and quality assurance testers. These costs can quickly escalate, especially if the project experiences delays or requires additional features not initially anticipated.
Ongoing Maintenance and Support
After the initial build, the software will need continuous maintenance to fix bugs, ensure security, and update functionalities. This ongoing support can be costly and demands a dedicated technical team.
Conversely, when you buy an affordable contract management software, these maintenance and support costs are typically included in the subscription or purchase price, ensuring predictable expenses.
Infrastructure Costs
A custom-built solution often requires specialized infrastructure, which can include servers, databases, and additional IT resources. These infrastructure costs can be significant and add to the overall TCO.
Ready-made solutions usually come with cloud-based options, minimizing infrastructure costs and offering scalable resources.
How long does it take to get started with a CMS vs. Building Your Own?
Developing a custom solution is a time-intensive process. From initial planning to deployment, the development cycle can take months or even years. This delays the time when your organization can start reaping the benefits of an efficient contract management system.
When you purchase a dedicated Contract Management Software, you know it will work right out of the box. Some tools do charge an onboarding fee and could take several months, but others, like ContractSafe, offer free implementation support and can have you up and running right away.
What Resources Do You Need to Build Your Own Contract Management Tool?
Technical Expertise
Building a custom solution requires significant technical expertise. This means diverting your skilled tech resources from other critical projects. For many companies, especially small to medium-sized enterprises, tech teams are already stretched thin managing core business applications and infrastructure. By purchasing a ready-made solution, you can free up your tech team to focus on other strategic initiatives that drive business growth.
Training and User Adoption
User-friendly, off-the-shelf contract management solutions come with built-in training resources and user support. This eases the adoption process and ensures that your team can quickly learn and start using the software effectively. Custom-built solutions often lack comprehensive training materials, leading to longer onboarding times and potential resistance from users.
Contract Management Software Can Grow with Your Organization
Affordable contract management software solutions are designed to scale with your business. As your organization grows, these solutions can easily accommodate increased volumes of contracts and users. Custom solutions may not be as flexible and could require significant re-engineering to scale effectively.
Additionally, Ready-made software providers continuously enhance their products, releasing regular updates that include new features, improved security, and bug fixes. These upgrades are part of the service agreement and ensure that your software remains up-to-date with the latest technological advancements. In contrast, maintaining a custom solution means that your tech team must manage and implement upgrades, diverting resources from other critical tasks.
Resources for Finding an Easy Affordable Contract Management Software
See how easy finding a dedicated contract management tool can be! These resources can help:
How to Find a Contract Management Software that Suits Your Needs (+ Implementation Checklist)
How to Know if You’re Ready to Invest in a Contract Management Tool
23 questions to ask yourself about your CLM readiness
14 Best Contract Management Software: 2024 Buyer’s Guide
WEBINAR: CLM Made Easy from Evaluation to Implementation
How to Migrate to a New Contract Management System
Focus on the Real Work
Every organization has its core competencies that drive business success. Diverting focus and resources to build and maintain a custom contract management solution can detract from these core activities. By investing in a ready-made software solution, your organization can stay focused on what it does best, leveraging the expertise of software providers who specialize in contract management.
While the idea of building a custom contract management solution might seem appealing, the reality is that it comes with substantial costs, resource demands, and risks.
Purchasing an affordable, off-the-shelf contract management software solution offers a more effective and efficient alternative. It ensures a lower total cost of ownership, faster deployment, better scalability, and the ability to leverage ongoing support and upgrades.
By making this strategic choice, your organization can optimize its contract management processes while staying focused on its core business objectives.
Discover ContractSafe: An Easy, Affordable Contract Management Software
Discover the ease and efficiency of managing your contracts with ContractSafe. Our platform streamlines every aspect of contract management, from automated workflows to seamless integrations, ensuring your contracts are always up-to-date and compliant.
Ready to take the next step?
Schedule a personalized demo today and witness firsthand how ContractSafe can simplify and enhance your contract management strategy.
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