What is Contract Management?

TABLE OF CONTENT

Contracts form the basis of all business transactions. In a written contract, at least two parties lay down their common intent: for example, how they want to work together, which services are to be provided and how they will be remunerated. The consequences in the event of non-performance are also contractually regulated – as well as many more details.

Contracts are therefore often complex and lengthy documents. To ensure that they are legally secure and cannot be challenged, they must be drafted in a legally flawless manner. Optimal contract management is the prerequisite for this. Contract management is also referred to as Contract Lifecycle Management (CLM).

But what exactly is meant by this term? We would like to answer this question and show you, using the Approovd software as an example, how your contract management can also be automated in a timely and cost-effective manner.

1. What Does Contract Management Mean? A Definition

Contract management encompasses the legally sound management of all processes involved in the creation of a contract. This includes, for example, the following aspects:

However, contract management does not only concern the drafting of new contracts. It also includes regularly reviewing existing legal documents or contracts to ensure they are up to date and making adjustments in the event of changes in the law.

2. Innovation in Contract Management: LegalTech

In recent years, contract management has been greatly modernized and automated thanks to advancing digitalization. In the process, a new term has emerged: LegalTech. The Approovd software, for example, is one of the leading LegalTech tools. Using the example of contract automation, we will outline to you what advantages legal tech brings with it.

2.1. What is LegalTech? A Definition.

Generally speaking, LegalTech is the abbreviation for legal technology, i.e. an IT-supported technology with which legal work processes can be digitally managed and partially or completely automated. LegalTech applications help to control contract management or processes closely linked to contract management more efficiently and cost-effectively.

Examples of applications already exist in the following areas:

2.2. LegalTech Pioneer: Contract Automation

In general, the field of legal technology is still very young, but it is characterized by an enormous density of innovation. It is therefore foreseeable that LegalTech tools will immensely simplify legal work in all conceivable legal areas in the near future.

However, while many applications are still in the development phase, contract management can already be managed digitally with a high degree of reliability and is therefore one of the fully mature legal tech applications. Software solutions such as those from Approovd enable even non-lawyers to create legally compliant contracts very easily and with minimal effort. Even if the contracts are complex.

Contract automation can be explained quite simply using Approovd’s software: Users basically let the software guide them step by step through the process and, where necessary, just enter a few details in the input fields provided. Based on these answers, the software automatically generates a document tailored to the user’s individual needs, which has been legally reviewed by the best Swiss lawyers and is therefore ready to use. How does this work in concrete terms? We would like to present this to you in more detail in the following sections.

3. LegalTech Best Practice: Which Processes can be Streamlined Through Contract Automation?

Approovd assists in all stages of automatic contract creation:

Find out now how easy it is to integrate contract management into your everyday life.

3.1. Draft Contracts and/or Documents

Dashboard von Approovd - alles was man braucht für ein effizientes Vetragsmanagement

To draft contracts and/or documents, users first choose in Approovd's online library the right one from over 100 documents. All contracts or legal documents are available in German, English and French. By entering a search term in the keyword search, users can find the document they are looking for with just a few clicks. No matter whether it is an employment contract with the option of a home office, the data protection declaration for the company's own website or the minutes of the annual general meeting.

Eine Geheimhaltungsvereinbarung mit Approovd's intelligenten Vorlagen schnell und online erstellen

In the next step, the user answers specific questions in a dynamic, digitally managed interview process. On this basis, the tool automatically generates individual text modules and inserts them into the contract at the right places. The result is a document that is precisely tailored to the company’s needs. Done. On average, the creation of a document takes between five and ten minutes. You do not have to invest more of your valuable time. Managing documents and contracts once they have been created is also effortless. These can be downloaded again at any time and as often as the user wishes, as a Word document or in PDF format, reused or adapted to changed conditions if necessary.

3.2. Negotiate, Sign and Manage Contracts and/or Documents

Contract management software like Approovd also enables seamless teamwork. You are probably also familiar with this: often several parties are involved in the creation of a contract and the document goes through various approval stages within the company. Without digital contract management software, the documents must be sent by email and made available to all the people involved.

 

And this often results in more than confusing communication: one mail after another fills the inbox. The attachments contain many different corrected or commented versions of the original contract. Hand on heart: how is the person in charge supposed to keep track of everything and bring it all together? It is practically mission impossible.

3.3. TeamWork by and with Approovd

The TeamWork feature within Approovd offers a tailor-made solution. Users have the option to involve different people in the creation and editing of a legal document. The collaboration takes place in a virtual space, independent of time and place. Very important: work is not done in different versions of a document, but in one and the same digital document.

 

The principle is very simple:

The advantages at a glance:

3.4. Contract Signature and Data Protection

Documents can also be signed electronically using Approovd. Keyword: electronic contract signature, also called eSignature. Employees, customers, and partners are thus not only pleased about paper-free processes without breaks, but also about a highly modern and efficient contract management.

 

The feature of electronic contract signature has gained importance, at the latest since the outbreak of the Corona pandemic. Since then, more and more employees have been working remotely. In times when remote working is becoming increasingly widespread, it is important to be able to control as many company processes as possible fully digitally.

 

This also applies to signature management: if, for example, contracts that require the signatures of several parties first have to be printed out and sent by post to various addresses, valuable time is lost until the return of the documents is completed. This does not have to be the case. Thanks to the possibility of electronic signatures within Approovd, contracts are legally signed within seconds – and completely independently of time and place on a smartphone or computer. It doesn’t matter whether parties involved are in the office next door or on another continent.

 

Last but not least: data protection is also taken into account. All contracts processed within Approovd are subject to confidentiality and secrecy in accordance with Swiss law. For this purpose, the applications have technical and organizational security guidelines and procedures to protect data from misuse as well as modification and destruction. Furthermore, pseudonymization or anonymization techniques can be applied to protect the data – again fully automatically.

4. Who benefits from Contract Automation?

Anyone who has ever worked with an automated contract management tool such as Approovd will no longer want to work without it in their everyday life. With the smart technology, all steps of contract management can be reliably controlled – from the creation of an official document to the coordination with the parties involved directly in the system to the electronic signature.

 

And in the simplest : the principle of Approovd is based on the streaming model from the music industry. Users find a contract on a platform starting at CHF 19 per document, fill it out directly online, customize it and then download the finished document. Specialist knowledge is not required.

 

The benefits of an automated contract management solution like Approovd at a glance:

 

 

SMEs and young companies in particular benefit from contract automation. These companies often do not have the necessary budget to employ an in-house lawyer to draft or adapt contracts or to give the job to a law firm. Instead, their own employees within the various departments often draft the contracts on their own, to the best of their knowledge and belief. Or they research the internet for free templates.

In this way, they want to save their budget and speed up the process. But the opposite is often the case. Errors often occur when documents are adapted by the users themselves. In addition, the quality of the documents found on the internet is often not optimal – many of them are outdated and do not consider current case law.

Even the smallest inaccuracies in official documents or contracts can lead to considerable legal pitfalls, which in the worst case end in complicated court proceedings or expensive settlements. This danger is constantly increasing. This is because laws and ordinances are changing constantly and ever faster. This makes a legally unobjectionable approach to contract management all the more important.

5. Risks of Inefficient Contract Management

And even if such a worst-case scenario does not occur, a handmade process is usually inefficient because it entails many discussions and votes. The whole thing usually has a noticeable impact on the overall balance of a business deal. According to the Harvard Business Review, experts estimate that inefficient contract management causes companies to lose between up to 40 per cent of the value of a deal.

These are all the more reason why the time is ripe for the introduction of innovative, cost-saving, efficient and legally watertight processes in contracting. Approovd’s technology not only helps businesses to overcome time hurdles when negotiating contracts and to make them legally watertight at a fair price. This actually leaves only one question unanswered: When will you automate your contract management?

6. CONCLUSION: After SMART TV and Smartphones, the Time has come for Smart Contract Management

We all experience in various areas of our daily lives that smart applications make many things easier. At the breakfast table, we use an app to order a book that will be delivered in the evening. On the way to work, we carry out banking transactions on our smartphone with a few taps, and in the evening, the same device informs us via push notification that the partner of our dreams is just a swipe away. Everything is uncomplicated and instantaneous.

 

At the same time, we have also observed in recent years, for example, that television and computer are slowly merging into one device. Thanks to SmartTV, we use the TV to call up apps for streaming videos, TV content, films, our own pictures and music, surf the Internet on the large and razor-sharp screens or use the screens for video conferences.

6.1. Digital Standstill in the Legal Sector

While digitalization in most private and professional environments enjoys a high level of acceptance, the legal sector has not only been at a digital standstill for a long time. The first LegalTech applications were also viewed rather skeptically by experts.

The Professional Law Barometer of the Soldan Institute also provided the reason for this in 2017. 46 per cent of the respondents thought that legal tech applications could displace lawyers from typical lawyer business. However, the skepticism was mainly due to the fact that many were not particularly familiar with the exact use cases for the legal work process: One in three participants stated that they had not yet looked into legal tech in detail.

Over the years, however, acceptance has increased noticeably. After the revolution of smartphones and SMART TVs, the time has come for smart document and contract management in the legal sector.

 

6.2. Digital Contract Management for All: from SMEs to Multinational Corporations

Digital contract management noticeably relieves companies of all sizes: create first-class contracts and legally impeccable documents with ease and retain full control over your content and costs at all times. Retrieve them when you want and adapt them as you need at any time. You determine which text components are combined in which order and what they should contain. If changes are necessary, you can call up your contracts again at any time, make updates, then send the contract update with just a few clicks and have it signed electronically by all contracting parties. It couldn’t be simpler, faster or more efficient.

Working in a team is also child’s play. Not only because people always work in the same document. In addition, individual authorization levels can be set for all participants with just a few clicks, so that team members can only adapt the passages that are within their decision-making authority. Automate and accelerate negotiation and signing processes and ensure full compliance at all times.

6.3. Advantages of a Cloud Solution

At the same time, you can fully rely on the security of your data located in the Swiss cloud at all times. For you, this is not only a plus in terms of data protection and IT security. A web-based solution also means that you can dispense with the time-consuming installation and subsequent maintenance of additional software on your local servers.

Approovd’s cloud technology does not eat up your expensive local storage space, nor does it interfere with your company’s IT resources. In short, we offer you the cost-effective, straightforward and readily available technology you need for modern contract management.

Do you want to learn more? We invite you to a free live test or advise you directly. Get in touch today. We look forward to welcoming you to Approovd.

Do you have any questions or would you like to schedule a presentation? 

Please fill out the form below: Tobias will get in touch with you

Tobias Güntenspenger - Sales Manager bei Approovd - Schweizer Vertragsmanagement Software

T: +41 44 700 60 04

Tobias Güntensperger
Your Sales Expert

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