Contract Management In The Cloud
Contract management doesn’t have to be cumbersome and a hassle for the organization. Usually, contract management is associated with stacked up files gathering dust somewhere in the organization, and people rummaging through the files in the hope of getting hold of vital information that the organization needs for a particular purpose- dispute or monitoring deadlines.
Cloud computing has made it possible for organizations to manage their business from anywhere on the planet. But what is cloud computing? In simple language, cloud computing is providing IT resources over the internet. The pricing depends on the usage of the organization. It benefits the organization since they don’t have to create or build, or service physical data centers or servers. They can access IT services such as computing power, storage, and databases, depending on its need, from a cloud provider like Amazon Web Services (AWS).
What is Cloud Contract Management?
Contract management entails several stages that range from pre-executing to post-executing of contract. An operating organization executes several contracts for it to exist as a going concern, and therein lies the rub. It can be challenging for the organization to manage contracts given the volume and complexity of contracts efficiently.
Cloud Contract management has its root in cloud computing and uses SaaS as software for managing the contract lifecycle. SaaS represents a software distribution model where the Service provider hosts application for customers and customer accesses it over the internet. It doesn’t make use of spreadsheets or offline systems to direct the contract lifecycle.
Contract management consists of several stages-identifying the needs, negotiation, executing, and other- and for effective management inputs from several sources are required. Cloud Contract management captures data/inputs from various sources. It provides a holistic picture to the organization before it enters into an agreement.
As a corollary to the above, it helps the organization to manage the contract post-execution better—for instance, meeting deadlines, enforcing their rights, and other similar aspects.
The fallout of manual or limited automation process
An organization has contracts spread across various departments. The whole process of monitoring the contract becomes inefficient sans centralization. Organizations store data in multiple databases that are not integrated, and thereby constant movement of data back and forth makes contract management a nightmare. As a result, the organization is unaware of the scope of each agreement leading to:
Falling beyond the project milestone deadlines
Not able to track or streamline contract and vendor spend
Oblivion to supplier’s obligations under the contract, consequently an increased possibility of a compliance breach
Expending significant resources on low-value work such as searching for information concerning contract responsibilities
Contract management involves collaboration among different teams within the organization. To successfully execute a contract, Legal, marketing, finance, and other teams must collaborate, and a fragmented approach doesn’t aid in combining resources.
Access to data
Without cloud contract management, access to data entails a resource-draining and tedious exercise. For instance, if the finance team requires project related document, the finance team needs to ask the department that has the document in possession. A possibility exists that although a particular department has access to the document, how does the department ensure that it has the updated document. The whole exercise of communicating and sending emails between departments to get hold of the updated document is unproductive and prodigal.
Modifying the document
A contract inevitably gets modified after the parties execute the contract. It may be due to transactional or other factors that warrant the contract to mould according to the prevailing circumstances. In the manual management process, the altering of the contract is fraught with chokepoints that make the exercise a resource depleting one.
Data entry and management
Organizations squander their limited resources in data entry and managing. Further, the traditional data managing process requires setting up of expensive hardware and data operating personnel. Nevertheless, data management still exists as an inefficient process within an organization that requires a major overhaul.
How does Cloud contract management resolve the issues?
The organization’s workforce can access the contract data from anywhere on the planet. They don’t need to drive to the office for feeding contractual data. Therefore, it saves time both for the organization and its workforce.
The cloud service providers invest considerably in securing data transmission over the internet. They understand these documents contain sensitive data, thereby providing the customers with a safe and secure digital environment. As administrating contract entails several steps- data entry, reporting, searching, tracking, reviews and approvals, termination and renewals- both the staff and management can access the data from anywhere, as a result, better collaboration is witnessed between organization’s departments.
The cloud service providers offer bespoke software that is cut out according to the organization’s needs. It only leaves the organization responsible for providing their employees with the internet and system to access the browser.
The collaboration and centralized storage enable the organization and concerned personnel to supervise executing or administrating the contract adequately. For instance, any change made by the finance team can be tracked and discussed. It helps in understanding the perspective of different stakeholders and thereby finding a middle ground that incorporates each stakeholder’s interest.
The organization doesn’t have to invest in establishing separate hardware or system to integrate the cloud system- the software adapts to the organization and not the other way around.
Organizations can work on actively cooperating at the pre-adoption stage of hiring cloud contract systems-Not just internal but external cooperation. Vendors, suppliers should be consulted, and their views can be sought before adopting cloud contract management. As adopting the system will impact different stakeholders, their interest must be integrated with the system.
Furthermore, technological tools like A.I, blockchain, cloud computing can only propel the organization towards their goals when they interact synergistically.
About the author : Suryash Kumar, working at Vidma Consulting Group LLP, who loves exploring the uncharted territories. He has always been fascinated by the legal field, and he believes writing is one of the ways through which he contribute to the growth of the legal field.