How to Organize Your Contracts
The larger the company, the more the contracts – that is a given. The larger the company, the more the divisions. The larger the company, the more these divisions work in silos. All companies run on contracts – buy side and sell side. How can you organize all the contracts? One way is to put them in a shared repository – either a shared folder on a network drive- which gets impossible as the geographic locations change, or put them on a shared document management system, such as Sharepoint or Documentum. That itself has its limitations.
When you organize your contracts by document, you are not actually getting insight into these contracts – we call it Contract Intelligence. So, for example, if you have a repository of your contracts, and want to get all the buy side contracts with suppliers in, say, USA, which are expiring in the next three months, the only way to get that information is to open each contract, extract the necessary information, and put it in a spreadsheet. What if your CFO asks you to do the same for, say, contracts expiring in the next 1 year? This process is then repeated. Wow, that is a herculean task.
Contract management systems, go beyond a document repository. They allow you to input the salient information that you wish to track from your contracts. They even allow you to create contracts with work flow and authorization levels by user and user types. This then allows you to do the queries as I indicated in the last paragraph with ease.
So even though contracts can be managed using shared folders or document repositories, a contract management systems can be really handy for managing them more effectively.