Today's General Counsel, December 2021

Page 20

FEATURE

Legal and Financial Risks in Your Contracts By  DAVE PARKS

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ontracts play a critical role in helping companies manage their relationships with all parties in the supply chain, but poor contract management processes can impact a company’s bottom line. The risks due to ineffective contract life-cycle management (CLM) include overlooked penalties, missed obligations, lost revenue, lost savings, misplaced contracts, unauthorized access to sensitive information, unwanted renewals and potential brand damage.

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Despite the importance of contracts, many organizations still don’t have true insight into how their employees, partners and customers access and manage them. Contracts could be stored in file cabinets, in folders, on personal computers or shared drives, and might be circulated inefficiently and insecurely throughout the organization via email or paper. And what about the data? How do organizations monitor and ensure compliance with critical dates, deadlines, milestones

TODAYSGENERALCOUNSEL.COM DECEMBER 202 1

and obligations? Some use spreadsheets or email calendar reminders, which are risky. Some use nothing at all. By digitizing and modernizing CLM processes, in-house legal teams can mitigate risks associated with human error and inefficiency, and spend more time on valuable and strategic risk management initiatives. A data-driven approach to CLM is the most effective way to mitigate risk in contract management efforts. Enterprise CLM software gives busy teams in legal, procurement and contract administration a digital, integrated set of tools to handle the tasks associated with contract creation, negotiation, execution, and ongoing management including post-award rights, obligations, amendments and addendums. The main benefits of enterprise CLM software are visibility, automation, accuracy, security and collaboration.

VISIBILITY Centralizing all contracts and related documents is the backbone of the contract management process, supporting and enabling all the other key benefits. Centralizing contract data in a secure, dynamic, digital contract repository enables legal teams to search the organization’s contracts for information such as documents, contacts and dates, and to run reports and BACK TO CONTENTS


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