business governance

How to get buy-in for a contract management software purchase

Posted on by

Let’s assume that you’ve decided that your company or department needs contract management software. You’ve done your legwork, examined all the features, maybe you even took advantage of a 30-day trial.

But that may not be enough – there’s another step that’s highly recommended. For users who work in large enterprises, the true effectiveness of contract management software is magnified many times when there is full buy-in from key stakeholders. Contract management for large enterprises is rarely a one-department function, so wider interest for a solution will help you get to implementation quicker.

By sharing what you’ve learned about the way contract management improves efficiency and reduce risks (from missed contract deliverables, rising admin costs, etc.) you can also share the workload during roll-out.

To get enterprise-wide buy-in for a solution, consider the following tactic. Form a working group to examine the need for contract management:

  •  Get participation from likely hands-on users, but also those in departments most likely to use the information gathered from contract management software.
  • For possible end-users, try to expose them to a trial version or to participate in any live demos.
  • Be sure to record the working groups efforts to share with management (to document progress).
  • Get input on objectives/goals of centralized contract management from all stakeholders.
  • Ensure the goals go beyond administrative goals (for example: make contract info records easy to access) to specific financial goals (for example: document operating costs such as invoicing preparation time).
  • Have the working group prepare questions for a prospective vendor about key support needs beyond implementation (different users may have different ongoing needs).

While it could feel daunting to roll-out contract management at once to an entire company, forming a working group and “spreading the workload” among all the interested parties will make the job far easier.

Beware of the Evergreen Clause

Posted on by

Unfortunately, some businesses only recognize the need for contract management software once a problem arises – when it’s too late to enact “an ounce of prevention.”

Here’s a perfect example: Consider the “evergreen clause,” or the autorenewal.

Investopedia defines the evergreen clause as: “A contract provision that automatically renews the length of the agreement after a predetermined period, unless notice for termination is given. Evergreens are often used for long term agreements such as memberships or maintenance contracts.”

How does this sneak up on the unsuspecting contract administrator? In an article on the website Mondaq, author Steve Dutton poses the situation of a business owner deciding to cancel the license agreement for a certain computer software which was purchased to improve productivity, but ended up not being effectively used.

Upon calling the vendor, the representative notifies the business owner that the license agreement does not allow a simple cancellation. Instead, the business owner is contractually obligated to continue paying for the software for another full year. The real culprits here are the terms and conditions of the software license containing the automatic renewal or evergreen clause.

Automatic renewals often come with a definition of when notice must be given to cancel a contract. The problem isn’t that evergreen clauses are inherently bad. It’s that notification dates for cancellation have a habit of being institutionally “forgotten” – unless there’s a serious problem.

Contract management software helps you shed light on these forgotten contracts in two key ways. First, you can customize notes and fields to record specific deliverables of vendor/service providers, thus giving you a history of performance. Second, you can set up automatic reminders for key renewal dates. This feature is in all Contract Assistant versions, and in the Enterprise edition you can even configure alerts to be distributed via email.

Setting an alert or reminder 60 to 90 days out from a renewal notice cut-off notice date should give you enough time to review performance and get input before contacting the vendor/service provider. At the very least, it may give your business the leverage it needs to alter a contract to meet your company’s needs better.

For additional discussion and recommendations about evergreen clauses, read this blog post by Law 4 Small Business.

It may not always be possible to avoid evergreen clauses, but you can certainly get ahead of any potential problems if you’re using good contract management software.

10 Years in Business … and a cautionary tale

Posted on by

Image

Blueridge Software this month celebrates the 10-year anniversary of Contract Assistant – the leading contract management software for organizations of any size and budget.

Ten years of stable growth, product releases, and customer support is a proud milestone. It is something our customers can also appreciate, considering Contract Assistant is the business tool they use to help manage the contracts and documents that govern business-wide operations of all types.

Yet all is not necessarily good in the contract management world. Many software companies offer their products as software-as-a-service (SaaS), offering their services on a subscription basis via the web. It sounds like a good idea, but consider what happened to Mumboe.

A few months ago, our industry reported the hasty closure of Mumboe, an SaaS contract management company. It gave clients just two weeks to access and download all of their stored data before shutting down its site and web-based service for good in November 2011. Such a rapid shutdown was a tough enough situation for Mumboe customers, but consider, too, that many were left to scramble and search for replacement contract management software.

Nothing demonstrates the pitfall of trusting SaaS quite as well as the Mumboe event. SaaS companies store your information and records on their system. And in the event of a service failure or company shuttering, you may or may not get those records back; and if you do, they may not be in a viable file format for you to use. Granted, the anytime/anywhere access and instant software updates have a certain appeal, but keep in mind the drawbacks of vulnerability to Internet service interruptions and application closures.

Now, consider the difference we offer with Contact Assistant: when you purchase and own the software outright, your critical contracts and other legal documents remain on your system and under your full control.

Access to your data and to the program is indefinite, regardless of the selling company’s future state, your Internet service connection, or whatever else. With virtualization options available, you can set up anytime/anywhere access to the program across the devices and access points you use to run your business. Plus, you can rest assured that with your information stored on your network, you have control over its security.

So while Blueridge Software celebrates the 10th year anniversary of Contract Assistant, we hope all our customers have found some peace of mind with our purchased solution.

Hot topics in contract management solutions

Posted on by
Contract Management Software

Contract Management Software

We started this blog just 18 months ago, so we thought this would be a good time to take stock of what feedback we’ve received from visitors. It is clear that readers have an interest in our blog, but the following are the three most popular blogs posted (so far, that is).

Top Three Most Popular Posts

  1. News Flash: Introducing Contract Assistant PRO Edition 3.7!
  2. Key Benefits of Contact Administration
  3. 8 Steps to Choosing a Contract Management Solution

What’s driving the interest in new versions, key benefits and how to select contract management software?

Taken together, these three topics are a snapshot of where many people in large and small enterprises find themselves: knowing there has to be a solution out there, and wondering what the real benefits are. After all, businesses today have more contracts than ever — and those contracts are increasingly complex. Add to that situation an ever-increasing pressure to drive costs lower and the result is longer-term agreements with suppliers of all types.

For many employees and business owners, this combination of circumstances cries out for a way to better manage contracts to reduce risk, centralize information and generally make a difficult, disjointed process more coherent.

So we see the interest in choosing a contract management solution, and interest in benefits. And of course, interest in Contract Assistant naturally follows that. We see a lot of interest in our free 30-day trial as well as our free 30-minute demo of the product as well.

Considering the list of risks associated with no or poor contract management, is it any wonder why readers are exploring the benefits, best practices, and case studies?

For more information about document retention policies, see this prior post. And here is a quick case study of how Texas A&M-Corpus Christi solved their contract management issues with Contract Assistant.

Stopping overpayment with contract management software

Posted on by

stop-overpaying-contractsOne of the biggest advantages of contract management software is the ability to uncover overpayments. Even on a small scale, a small monthly overpayment can add up to a significant amount. For mid-size or large enterprises, duplicated services and overpayments can be downright disastrous.

Overpayment is remarkably easy to do. In a post on the Apex Expert Blog, Jim Arnold wrote about tracking down the scourge of overpayments in the context of ERP systems. He cited a couple of excellent examples in his blog of overpayments.

In one example, an automotive company ended up paying $421,000 more on a vendor contract because someone misplaced a decimal on the invoice. In another example, a large manufacturer contracted to pay 75 cents per cubic foot for gases, but on the invoice that was
changed to $75 per cubic foot. It got paid because the calculation made sense.

That’s how easy it is to overpay. When you have invoice payments being made but not recorded against an easy-to-view record of a contract, these kinds of mistakes are possible – even likely.

Consider the upside to catching these kinds of oversights. You could save your enterprise or branch a lot of money – helping to boost net profits and reducing expenses. We know of one example of a small city that implemented contract management software and in the first six months discovered $70,000 in overpayments on expired contracts — and an additional $200,000 in the next fiscal year.

Any version of Contract Assistant, for example, allows you to input key information on contract records, including payments made and details on contract rates and payment conditions. Even if you don’t catch something minor, you can set alerts to remind you when to check invoices to ensure that billings match agreed prices. Those are just two very quick examples of how contract management can help.

Don’t forget the reporting function too. If you are recording and sharing payment information within internal department groups, you have more “eyes” on the subject matter, and therefore more help in catching something irregular.

In any case, the real risk is letting contracts get signed, filed and forgotten by one department, then letting another handle the invoices with little to no information on the contract conditions. It’s just too easy for mistakes to be made at some point in the process. Giving your company the ability to record payments, review key deliverables and invoice information – pulling these things out into the daylight – makes it less likely to let overpayments go unnoticed.