Three Reasons That Some Contract Management Systems Fail and How to Avoid Them

Randy Bishop | September 04, 2018

To avoid contract management system failure, centralize all your contracts, know your company's needs, and prioritize communication.

Here’s a story we have heard a million times from managerial personnel at organizations in many industries: Business is booming and everyone is working to capacity. Thus, the company needs help. Maybe the solution is to hire more employees. Maybe technology can increase productivity and save the day. The problem is, everyone is so busy that it’s a struggle to find time to address the problem.

Finally, management understands that a good contract management system would provide a wonderful opportunity to increase revenue and efficiency while reducing expenses. The company acts on the idea, only to be stymied in the process of implementing and adopting the contract management software. While management was spot-on in its determination that the organization needed a modern contract management system, poor (and avoidable) decisions and mistakes in choosing the contract management software unfortunately led to failure.

In this article, we’ll discuss some of the reasons that contract management systems fail. But have no fear – we’ll also tell you how to avoid them.

1. Failure to Centralize all Contracts

Purchasing contract management software (CMS) but only adding new contracts to the system is a huge mistake. The whole idea is to have all contracts in one location so that deadlines and important terms can be managed in their totality. If employees are still sorting through a filing cabinet for paper contracts executed before the adoption of your CMS, the whole point has been missed.

Solution: Using OCR technology, ContractSafe makes it so easy to digitally scan and upload all contracts into a single repository, this mistake will be avoided from the outset. In fact, it’s so simple you can even use our turnkey service to do it for you!

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2. Too Much Too Soon (or What We Sometimes Call “The Frankenstein Effect”)

The idea to implement an advanced CMS can originate from lots of different places within an organization. Sometimes, it starts with people who do not necessarily manage other employees, but who are frequently tasked with compiling, sorting, and maintaining contracts and other documents.

Good examples are secretaries and paralegals. Consider a paralegal who is frequently asked to track down contracts and/or extract relevant information from them to assist lawyers or managers. The paralegal may realize sooner than others that modern contract management software would be incredibly helpful, and suggests that it be considered.

As the request makes its way up the chain, each person who reviews the idea adds requirements to the proposed contract management system features. By the time the CFO and procurement team have weighed in, the paralegal’s simple idea has turned into an expensive “Frankenstein” that will take nine months to implement and even longer to understand. The company nixes the idea, or even worse, spends the money on something no one will use! The paralegal continues to waste time on manual searches through file cabinets and disc drives.

Solution: Slay Frankenstein. The company needs to avoid overly complicated programs which take many months to understand. Resist the urge to “put in one solution to rule them all!” With contract management system features that assist the paralegal and meet the company’s needs, but that is also easy to implement, easy to learn, and easy to use, buy-in is a breeze. You can always upgrade/migrate after a few years if the needs of the organization evolve further!

Enter ContractSafe, the Frankenstein-slayer. We provide a centralized contract repository where all contracts are easily uploaded and can be searched instantaneously with Google-like searches. Simple user permissions are available. The system is scalable, with tons of features that are shockingly easy to use. The important thing is that you’ll be up and running almost instantaneously at a price that makes your CFO break into a wide grin. And...if you’re ready for that Frankenstein system, you can easily export all your data and files for the migration (but you won’t want to!).

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3. Poor Communication

Good managers know that poor communication creates all kinds of problems. This is certainly true when implementing a new contract management system. People resist change for lots of reasons, and these reasons need to be addressed.

Solution: Really listen to all of your stakeholders, especially employees. They often have fears that are reasonable but unfounded, like the fear of being marginalized or replaced by automation. Once these fears are allayed, buy-in comes much more easily. Communicate what will happen early and often, using a wide variety of media, such as meetings, emails, and posters.

At ContractSafe, we know what you need and how to help you succeed. We’ve worked overtime to create amazingly functional contract management system features, all while avoiding the pitfalls that so many other systems encounter. Start your free trial today!

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