Despite the need for better contract management practices, many companies are still floundering as to what to do with their contracts. It is widely accepted today that upgrading to a contract management system saves companies thousands of dollars a year and improves business relationships across the board. There are still some though, that prefer the tried-and-true old fashioned paper methods.
There are five pervading myths that tend to act as stumbling blocks for most companies when it comes to considering implementing a paperless contract management system. In this article we’ll address those myths to better understand why implementing an automated contract management system is still the most cost-effective, secure, and accessible, and compliant choice a company can make for contract management.
CLM Myth #1: CLM Software is Just for Big Businesses
Yes, it’s true that contract lifecycle management (CLM) software greatly benefits those larger, Fortune 500 companies tremendously. In the earlier years of CLM software, it was actually primarily larger companies that used it. In recent years though, CLM software has become much more accessible to smaller and medium sized businesses. Even as small as one-man operations can also increase efficiency and savings through using CLM software. Concord offers free e-signature and contract drafting/storage to make CLM software as accessible as possible to as many as possible. For small businesses who use software instead of paper, they realize increased efficiency and savings. These savings could translate to hiring new employee and applying resources to other areas which are directly related to revenue and growth. CLM software helps companies to grow from the tiniest fruit stand to a sturdy business.
CLM Myth #2: My Contracts Won’t Be Secure in the Cloud
Many businesses feel that if their data is not stored within their own brick-and-mortar walls, it is less secure. Using cloud-based storage for managing contracts though, can actually be more secure, and eliminates the need for businesses to maintain their own IT infrastructure and personnel. Concord’s cloud-based storage system has bank-level security. All of your contract data is encrypted and stored in data centers that pass the most stringent of security and confidentiality audits. These server sites have high level security that protects your data from any type of intrusion. Rest assured that your data will be protected from any kind of hack or cyber-attack.
CLM Myth #3: I Can Manage My Contracts Just as Well with a Manual Process
While it may be true that businesses that have only one or two contracts total, organizing and managing those contract by hand is not terribly tedious, it is still a much better practice to use dedicated contract management software. Remaining in the paper-age, even for just a couple of contracts means that the potential for growth is capped, or will require the implementation of a new system further down the road. CLM software drastically increases the number of contracts that your company can manage simultaneously, which translates to a greater potential for future growth. Using CLM software also means that contracts will never go missing. They’re always accessible in the cloud. On the other hand, 10% of contracts managed manually go missing, which translates to penalties and missed opportunities. The simple fact is that manual processes are simply not as efficient as CLM software.
CLM Myth #4: E-Signatures Aren’t as Valid in Court
Electronic and digital signatures have been legal in dozens of countries since the 1990’s. They are given every bit as much weight in court as a paper and pen signature. The reason for this is the powerful encryption involved in providing a digital signature. The process involves certain checks that ensure that a signature was provided by the proper person, in the proper location, and at the proper time. This information is all encoded into each signature, making it every bit as legally binding as a traditional signature.
CLM Myth #5: Others can Alter My Document Without Consent
With specific administrator oversight into every contract, you control who can view, edit, or comment on a contract. This means that potential partners can view the contract without having editing rights, though they may still make comments and suggestions. All these features can be activated and applied to a specific user profile by the administrator. You are always in complete control of your data. Grant your team the proper level of access for their roles, like editing a contract, and you will still have complete oversight into the process. If you don’t like an alteration that your team has made, then you can change it and leave a comment describing why you made the change. Nobody can modify the contract without your approval.
To learn more, feel free to schedule a demo here.