According to research conducted by Dolphin Software, over 80% of organisations manage contract milestones and critical dates by spreadsheet.
I am sure that Microsoft will be delighted to know that Microsoft Excel has become the de facto contract management tool in the market, but Dolphin Software’s research also indicates that this is not the only interesting fact about the way that the contract process is handled in many organisations and that there is much room for process improvement.
Dolphin Software’s research shows that contract managers, legal counsels and procurement professionals use Microsoft Word more often than not to draft new contracts, they use their email client as a rudimentary approval workflow tool, they save contract documents in a variety of locations (Windows file share folders, desktops, paper filing cabinets, or in content management repositories) and if they keep track of the terms and conditions that have been negotiated in their contracts, they use Microsoft Excel spreadsheets to keep a record of key contract data.
This ‘Word>email>file share>spreadsheet’ process for contract management is not always the most efficient way to manage the contracting process and could expose organisations to unnecessary delays, costs and may mean that contracts are not being managed to optimise their value.
Spreadsheets tend to be maintained by a small number of specialist contract manager users, and even when they are made available to other business users, this research shows that spreadsheets are seldom reviewed frequently by users outside of the contract management group and therefore have limited value as an enterprise contract management tool. Another issue with spreadsheets is that they are excellent at capturing structured data, like contract milestone data (dates, locations, values, currencies, etc), but not so good at capturing unstructured data, like contract obligations or commitments –that are present in most contracts.
Dolphin Software’s research clearly shows that organisations that are looking to streamline and control their contracting processes more effectively through the use of software solutions, will look for a central electronic repository for contract documents and a central database for contract data first, before looking at more advanced features and functions. High up on the priority list is the ability to create proactive user alerts on contract data and the ability to run management reports to analyse and manage milestones.
Additional functionality like automated contract authoring, legal clause libraries, workflow, external collaboration, advanced reporting and integration with third party systems is seen as important, but secondary to getting the basics right.
Contract Management software solutions, like Dolphin Contract Manager, have the propensity to significantly streamline and improve contract processes, particularly if they are managed in a manual and disjointed way today; and should be seen as a critical tool in a contract manager’s quest to extract the greatest possible value out of contracts.