The contract lifecycle at any company can be a laborious process, but the hospitality industry presents its own unique operational and logistical challenges that can make contract management difficult to streamline. Large hospitality groups are tasked with figuring out how to coordinate this process across multiple teams, departments, and properties, or they run the risk of facing potential legal and compliance issues down the line.
Without an automated contract process, legal risk isn’t the only problem companies will face. A high volume, complex contract lifecycle is also time consuming and expensive from an operational standpoint. Once businesses reach a certain size, they can’t afford not to streamline the contract lifecycle in the most efficient way possible.
As a result, most hospitality businesses rely on contract management software to manage risk and reduce operating expenses by accelerating the contract lifecycle and securely storing documents. But when it comes to meeting the needs of a hospitality group, not all contract management software is created equal.
Why is Contract Management Software Important for Hospitality Companies?
Most contract management software offers a secure cloud-based document storage solution with a robust set of tools that help businesses streamline the creation, negotiation, execution, and storage of important legal documents.
Every industry faces a unique set of operational challenges, and the hospitality industry is no exception. With many companies managing multiple properties, juggling contracts, permits, and licenses can be time consuming and expensive. Without an automated, centralized solution hospitality companies may lack enterprise-wide visibility into each of its property’s vendors and contracts. The renewal of property-specific licenses and permits with varying expiration dates can be difficult to streamline, and the operational expense associated with manually tracking, logging, and searching for documents can be draining.
As hospitality companies grow, so does the need for contract management software, and most businesses will reach a point where it’s nearly impossible to operate without it. The sooner a hospitality company adopts a contract management solution, the sooner the business is able to optimize processes and reduce operational costs.
What are Some of the Ways Hospitality Companies Use Contract Management Software?
When it comes to features and functionality, not all contract management software offers a one size fits all solution. When evaluating options, be sure to carefully consider the features that are most important to your business and industry. Hospitality companies will benefit from the following features of a robust contract management platform.
Streamline Document Management
Contract management software can be a centralized storage location for all legal documents across your business and individual properties. Your business can use it to organize documents into a searchable, cloud-based central repository that is easily accessible by authorized business leaders, property managers, and employees.
Effective keyword search and filtering capabilities make finding documents from any location a breeze, and eliminates the need for an on-staff contract librarian. To further facilitate quick document access, some contract management software is equipped with OCR technology that can help you convert scanned documents into searchable text. With OCR, you can quickly locate scanned documents with just a few keywords, or search within scanned text to find specific terms, clauses, or expiration dates.
Manage Vendors and Services Across Properties
By storing all vendor contracts in a single location, business leaders can gain visibility into each property’s vendors and their associated pricing and contractual obligations. They can also quickly find the status of any specific document within the contract lifecycle. Having the ability to keep track of the various landscapers, elevator maintenance, and cleaning service contracts at each property gives companies the business intelligence needed to standardize or improve the vendor management process while optimizing budgets across each location.
Ensure Security and Compliance
An effective contract management solution allows you to establish a secure framework that minimizes risk and protects your documents from employee error, unauthorized internal access, or external data breaches.
Contract management software allows you to mitigate risk with access controls. Hospitality groups may need to grant the finance team access to all lease agreements or liquor licenses across all properties, while a hotel manager may only need to access documents pertaining to the hotel that he or she manages. User roles, such as read/write permissions are an important security feature that promotes collaboration while simultaneously restricting who can edit, view, or access specific documents.
Knowing that only your legal team can edit contracts, or that confidential documents such as employee offer letters are protected can provide peace of mind to any contract manager.
Additionally, a contract management solution should be built on a secure hosting environment. Look for solutions that encrypt data and documents, and contain malware and virus detection. It can be helpful to conduct a SOC2 audit prior to choosing a vendor just to ensure that the right data security measures are in place. Automatic back-ups are also essential.
Plan Ahead of Key Contract Dates
Staying ahead of auto renewing agreements and expiration dates is a typical part of the contract lifecycle, but hospitality companies have even more to worry about. With a large amount of vendors servicing multiple hotels, tracking contractual obligations, servicing dates, licenses, permits, or project milestones is big task. A simple contract management software has alerts and notifications that allow hospitality companies to track contract-related dates such as regularly scheduled elevator maintenance or the expiration of a locked-in pricing period with a food vendor.
Small businesses may rely on spreadsheets and shared calendars to manage auto renewing contracts and expiration dates, but once your company reaches a certain size, manually tracking key dates can become impossible to manage.
Companies depend on contract management software for automated alerts and reminders about upcoming dates to ensure deadlines and expiration dates are never missed. Both in-platform reminders and calendar views can help you plan around upcoming renewals or expiring contracts. But email reminders are crucial, especially if your team isn’t logging-in to your platform on a daily basis.
Accelerate Your Contract Lifecycle
Most companies quickly reach a point where manual contract lifecycle becomes unsustainable, but this is especially true for hospitality companies. Contract management software is built to automate the contract lifecycle by providing companies with tools to collaborate across departments on document creation, execution, and storage. With versioning control, you can be sure everyone on your team is reading the latest version of the contract. Audit trails also give you the ability to keep tabs on who uploaded the latest version or was responsible for specific changes to the document.
Many solutions also can easily integrate with other third party tools, such as your CRM or e-sign solution, which further support an efficient document execution process.
How Easy is it to Implement Contract Management Software in the Hospitality Industry?
Contract management platforms vary in terms of features and functionality. In some cases, the more features a product offer, the longer it can take for employees to adopt it. On the other hand, a simpler solution may make more sense for larger companies.
Large hospitality groups have tens of thousands of employees working across multiple locations. Not only is contract management software essential to business operations, it also must be easy to use. With large number of employees needing access and training, a simple solution is often the better option. While feature-rich products may have some additional selling points, they are also more expensive to implement and have a better chance of resulting in a failed implementation.
How Will Contract Management Software Help My Business?
As a business owner or operations manager, you know that as your business grows, so does the volume of contracts that flow through your organization. With multiple teams and properties, relying on manual processes, spreadsheets, and shared drivers is not only inefficient and risky, it’s expensive.
Contract management software gives you tools to increase the speed at which documents move through your organization, while ensuring your legal documents are safe, secure, and compliant. It can also give business leaders visibility into the contract lifecycle, the vendors used, and status and terms of agreements throughout your organization.
Contract management software can help improve operational efficiency and reduce costs for businesses of all sizes. Manually managing the contract lifecycle across multiple business tools may work for start-ups, but it’s unsustainable in the long-run, especially for companies who are in a growth phase. Not all solutions are a good fit for hospitality companies, so when selecting a platform be sure to carefully evaluate the features above to be sure it meets your needs.