Better Contract Management in Six Manageable Steps

Better Contract Management in Six Manageable Steps, by Nada Alnajafi, for Contract Nerds“The secret of getting ahead is getting started. The secret of getting started is breaking your complex overwhelming tasks into small manageable tasks, and starting on the first one.” ~Mark Twain

Most people hear better and think expensive. Before you roll your eyes at yet another article trying to convince you to buy a fancy contract management tool, hear me out. While investing in a contract management tool is undoubtedly a step in the right direction, it should not be your first. In fact, there is a lot of work to be done internally that will significantly improve your contract management process without costing you a single dime. And with all the choices out there, this work needs to be done before you can even attempt to identify the right tool for you.

In this article, I will break down the overwhelming task of modernizing your contract management process into six manageable steps. Over the years, I have successfully modernized contract management processes for startups and public companies using this method. In my experience, preparing to purchase a contract management tool should, alone, take about six months – one month per step.

1.     Map Out Current Process

Create a process map of your current contract management process to identify your baseline issues, gaps, and inefficiencies. You can use post-it notes, a whiteboard, paper, or a fancy process mapping tool. My favorite is PowerPoint because it is easy to use and most of us already have it installed on our laptops.  Interview other stakeholders and users for their input. You might realize the process isn’t quite what you expected it to be. Be sure to update your process map frequently and use it as a guide throughout this initiative.

2.     Re-Assign Tasks

Review the distribution of roles and responsibilities on your team. You are bound to notice a few mismatches that have naturally developed over the years. Re-assign tasks to the correct department or individual to improve workflow efficiencies. For example, if the attorneys on your team are currently handling administrative tasks, consider asking your legal support personnel to help out instead.

3.    Refine Workflows

You might have several different workflows to address a particular contract type or contract value. Refine your workflows and create a process map for each unique scenario. For example, Non-Disclosure Agreements may not need approval from Finance since the contract value is $0, whereas all other contracts do. If you decide to implement a contract management tool, you will need to provide these workflows to your vendor.

4.     Build Template Library

You should have contract templates to cover the most common business use cases for your organization. The more templates you have at your fingertips, the less time you will need to spend customizing standard contracts and negotiating the same clauses over and over again. For instance, I have a long-form and short-form version of my Software-as-a-Service template.

5.     Create Intake Form

Every contract management process begins with an intake form. Now that you have a better understanding of your current contract management process, and even made some substantial improvements to it yourself, you should have some ideas about how to improve (or create) your intake form. Whether your form is via email, using Word, through a ticketing system, or part of a contract management tool – you will need to identify what pieces of information you need to review contracts as efficiently as possible.

6.     Source & Implement Contract Management Tool

If you completed Steps 1 through 5, you should have a baseline understanding of what you need from a contract management tool. Sourcing and implementing a contract management tool is the ultimate and last step towards creating a modern contract management process.  Use your findings to create a requirements list which you can then share with your purchasing team and potential vendors to help select the appropriate tool. If you’re low on budget, I share your requirements list with IT to see if there are any tools that your company already pays for that can help you on your path towards a more modern contract management process.

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Stay tuned for more detailed blog posts about each of these steps in the coming weeks.

“Nothing is particularly hard if you divide it into small jobs.”

Henry Ford

 

Nada Alnajafi currently serves as Corporate Counsel for Franklin Templeton, a Fortune-500 global financial services organization. She has been practicing in-house for 11+ years and created Contract Nerds to connect with and serve the people who love contracts just as much as she does.
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