Much has been written about how Covid-19 has transformed our working habits in ways that may become permanent and how work-life balance definition has changed in this new normal. Is there any way to bring work-life balance to contract managers? CLM is hard because managing a contract over the lifecycle touches so many hands and departments in a company. The volume of agreements the organizations are doing has steadily increased over the last few years. So, many contract managers are getting to a point where the inefficiencies are glaring and burning hotter. It is hard for them to free up more time focussing on various contract management areas that need attention.
At a large organization, contract managers can be responsible for 20,000 to 40,000 active contracts at any given time. Such an intense workload can make it difficult to stay on top of deadlines and renewal dates.
Can an intelligent CLM solution manage the work-life balance of the contract management teams working day in day out by bringing better visibility into contracts and automating more of the processes, helping to reduce manual effort?
Let’s check out the possibilities before we debate!
Do you know how many of your contract managers are overloaded?
When you do not know how many contract managers are assigned against how many contracts, and if that assignment is well-balanced, you will have a bunch of contract managers who would be overloaded and another bunch of contract managers who are just sitting idle contributing to nothing.
Overloaded contract managers may suffer from stress, burnout, and an imbalance between work and home. One of the indicators of a packed contract manager is high turnover. Lower productivity and decreased quality are two outcomes of contract owners performing under too much pressure on the job.
Are you able to monitor, benchmark, and optimize their performance?
You cannot manage what you cannot measure. The same applies to the performance of your contract managers. The answers to these three key questions will give you the exact idea of how best your contract managers are performing:
- How long does it take your organization to move from proposal to signed contract?
- Is your company entering into contracts that the firm lacks the capacity to meet?
- Is your business making good use of contract renewals or has an issue with excessive churn?
Despite having a great team of contract management professionals, you might get undesired answers to the above questions. This can happen when the workload isn’t distributed and defined properly.
In the CLM solution, you can measure and monitor the performance of contract owners with well-defined KPIs, and get real-time insights into who is doing what.
How can a CLM solution manage the work-life balance of contract owners?
Setting up a robust self-service model can be a key in driving efficiencies, removing bottlenecks, and maintaining a healthy contract portfolio and a balanced work-life of contract owners. Contract analytics dashboards that display contracts managed by contract owners can help balance the work distribution and result in significant benefits. A few of them are highlighted below:
(1) Reallocation of underused resources
The above chart displays that Emma is overburdened by the number of contracts she handles. In contrast, the rest of the contract managers are holding only 44% of the total contracts. It clearly shows that resources are not optimally utilized, resulting in stress, burnout and may result in a high attrition rate. Higher attrition rates of contract managers can result in delayed time-to-signature, fruitless negotiations, reduced profit margins, and perhaps more revenue leakages.
(2) Performance measurement of contract owners
Looking at the same chart, another inference that could be drawn is how well a particular contract owner is performing. Are the other contract owners on track to get the contracts digitally signed on time and take care of important dates? Is Emma only underperforming? What are the reasons behind this?
All these key insights can be drawn and analyzed further for overall contract management performance improvement. Over and above, the use of AI in CLM can help find patterns and anomalies in contracts being handled by managers, increases spend visibility, and improves the transparency of where exactly your money is going.
(3) Digitization of fragmented processes
Work overload occurs when contract managers simply have too much on their proverbial plates. In traditional contract management, often processes are fragmented. It eats up a lot of the productive time of contract managers and keeps them over-burdened 24X7. A CLM solution eliminates the drawbacks of traditional contract management processes and improves workflows to improve efficiency and reduce risks. Digitized contracts securely store and manage the contract portfolio in the cloud and automate each aspect of the contract management workflows, which not only improves the process but also provides breathing space to contract managers.
(4) Automate approvals and workflows
Getting the proper approvals on time is another significant difficulty in customer success contract management. Two major roadblocks to the old email and MS Word way of “managing” contracts are: Identifying who needs to approve an agreement and if you do, verifying that contracts are sent to the right person every time. It is a headache for contract managers, they have to go through a vicious cycle of identification and verification for getting timely approvals. The most immediate consequence of overworking is a spike in stress levels and negative consequences to their physical and mental health.
A good, modern CLM solution, certainly helps to streamline and automate your contracting process, more importantly, it enables the “human” to perform better, with reduced stress and anxiety. Contract managers do not have to struggle to determine where a contract is currently, what action is pending, who is it waiting on, etc. There is tremendous visibility that enables the contract manager to immediately analyze what needs to be done on a contract. Increased automation also means there is much less manual work that needs to be done thus relieving the contract manager from the burden of mundane, routine tasks and activities. Ultimately, you would have a more productive and happy workforce, helping you drive better business across the board, after all, a company is only as good, healthy, and happy as its people are.
The future of contract management
The adoption of AI-enabled CLM solutions might be relatively low in the current world. However, today AI promises much to dynamically create metadata from the provisions and clauses in the contracts at the time of query, meaning search terms can be dynamic and not static metadata dependent. So, the future of contract management lies in the hand of artificial intelligence, machine learning, and natural language processing. Embracing the latest technologies will not only optimize your workflows but also align your resources with tasks that overall augment your contract management performance along with striking a proper work-life balance of contract managers.