business intelligence

Can you answer these 5 questions about your business’s contracts?

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Take a moment to think about your business and the vendor contracts that govern its operations. Can you answer these basic, yet crucial, questions?

  • Which is your most profitable contract?
  • Which is the least profitable?
  • Is your business paying for duplicated or overlapping services?
  • Which contracts are up for renewal?
  • Is your business already past the time to decline any auto-renewals?

If you can answer these questions quickly and confidently, congratulations. But there is a good chance that you don’t have an answer for some or even most of these questions.

It’s easy to think of contract management software as a “nice to have” administrative tool. But having a full-featured contract management tool will give you the kind of information you need to answer the above questions – and know a lot more about the true costs of contracts.

If you think of contract management software as a key reporting tool, you are closer to the mark than thinking of it as primarily “administrative” in nature. Reporting is a crucial step in the contract life cycle and one that can be automated and enhanced by using contract management software.

Contract Assistant, for example, has rich reporting functions. Knowing the importance of reporting to end users, Blueridge Software includes in the Standard Edition a library of starter report templates. At the PRO and Enterprise edition level, users get a rich starter library as well as a report generation tool – Report Designer.

Reporting even basic information on all your company’s contracts on a regular basis for review and analysis can really pay off. Depending on your management structure, contract managers may be required to report on the full spectrum of contract performance metrics, or may only be asked to deliver reports and notifications when exceptions are discovered. In either case, the information gathered from contract management software from the very beginning of a contract becomes the basis for all reporting, no matter the format or detail.

The flexibility of Contract Assistant, for example, allows for so much customization that you can gather data on select fields quickly and easily.  If you want to find out more about all the benefits of contract management software, download this complimentary executive summary report, “Contract Management Software – Reduce Risk While Saving Time & Money.”

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

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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

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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

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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.

Contract Information Doesn’t Belong in Just Your Employees’ Heads

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If your organization doesn’t use contract management software, perhaps this potential situation may sound strikingly familiar.

In every office, there is one go-to person who knows just about everything to do with the operations and administration. For this example, let’s suppose the office is yours and this person is “Sue”. Continue reading →