From the CEO to sales reps and project managers, each person in the manufacturing industry is pressured to speed up operations and adapt to managing complex business configurations and relationships. A critical area of transformation for this sector is Contract Lifecycle Management (CLM).
Contract lifecycle management is the step-wise automation and subsequent management of stages in a contract lifecycle using digital contracting platforms. For the manufacturing sector, smart CLM helps manufacturers and various other stakeholders build a solid foundation for their businesses and keep track of large-volume contracting procedures in an efficient way.
For instance, manufacturing firm employees have to update contract status and details from time to time, along with responding to repetitive email queries from clients and team members, and keeping track of contracts on the go.
This means the focus would be on providing support instead of moving the contract forward, leaving crucial contracts vulnerable to mismanagement, misplacement, or expiry. Manufacturers, therefore, require a robust and comprehensive contracting solution to manage expanding business horizons.
As India has the potential to transform into a global hub for manufacturing by 2030, the volume of contracts that need to be created and tracked would be enormous.
Manufacturing companies thus need to implement a digital approach to manage complex business contracts throughout their lifecycle. This would be a significant step to accelerate not just the contract management process but also the business’s velocity. The approach also improves compliance and minimizes risk.
Challenges Faced By Manufacturing Companies In Contract Administration
- Lack of Visibility: Due to a lack of contract visibility, companies in the manufacturing sector can frequently be subject to missed commitments and payments, as well as delays in contract renewals.
- Limited Opportunity For Collaboration: Manual contracting processes provide limited scope for collaboration and system integration between various teams and the client when the parties are not physically present in one place.
- Process Delays: Manually drafting and amending documents leads to delays in contract processing. The system also increases the back and forth of contracts and can lead to higher procurement costs and discontented customer relationships.
- Absence of Centralized Storage: Without a software-based CLM tool, businesses observe an absence of a singular space to store and access all their contracts.
- Confidentiality is Compromised: Without a cloud storage feature, manual contracts face the risk of getting into the wrong hands. Lack of security also makes it easier for intruders to manipulate confidential business contracts.
Why Does the Manufacturing Industry Require Automation in Contract Management?
- The growing speed of businesses across the globe demands a fast contracting process:
Manufacturing services structure their services with subcontractors to complete their projects, requiring business contracts to be linked across various people with different capabilities. Tracking the contract’s status throughout its journey requires a fast enterprise-wide tool, which is facilitated by smart contract lifecycle management software.
- The power of the cloud has made software-powered documentation procedures highly efficient for manufacturers:
Manufacturing companies can observe efficiency in their workflow by automating contracting processes. CLM can help these companies cut spending and free up time for employees to work on business-critical tasks. - Staying compliant with industry regulations is essential for businesses to avoid penalties:
The shift in industry regulations requires manufacturing businesses to constantly keep a check on ensuring their contracts stay compliant. When attempted manually, verifying thousands of manufacturing contracts against government laws becomes incredibly complex and time-consuming for employees. Contract automation makes the process reliable and quick. By directing documentation procedures towards a digital approach, manufacturers can create and execute contracts while adhering to regulatory policies.
How Contract Lifecycle Management Works
CLM offers multiple features that add convenience and efficiency to the contracting processes of manufacturing firms.
- Request Initiation: The manufacturing company requests a new contract, which can be created and formatted quickly with the help of pre-existing templates provided by the clm software.
- Collaborate Seamlessly: The various parties involved in the contract can easily work together to create its terms and conditions.
- Negotiate Remotely: CLM software enables parties to negotiate on contract terms from anywhere they may be.
- Authenticate the Contract: Through electronic signing and stamping integrations, businesses can quickly validate contracts.
- Analyze Performance: Manufacturing entities can effortlessly keep track of their contract’s performance through CLM, which provides timely notifications regarding critical contract processes.
- Store Securely: Post the creation and approval of a contract, firms can store it in a digital repository that enables quick retrieval and safe storage.
- Modify On-Demand: Businesses can conveniently alter a contract’s terms whenever required by setting up a cloud-based contract lifecycle management system.
How Can CLM Benefit the Manufacturing Industry?
Contract lifecycle management puts forward a number of advantages over physical contracts that can help manufacturing firms add efficiency to their business processes.
- Create secure and compliant contracts: Manufacturers can securely draft, negotiate, and finalize client contracts through a smart CLM system. The AI-driven approach ensures the contracts remain industry-compliant and prevents them from being tampered with.
- Contract Amendments Made Easy: With features like real-time online negotiations and a digital document repository, manufacturing businesses can effortlessly modify the existing terms of their contracts.
- Get Notified On-Time: With CLM, organizations receive timely reminders and updates regarding their contract’s status, enabling them to stay on top of payments, contract renewals, and many other such functions.
- Total Transparency of Contracts: CLM makes contracts visible across several people, especially for the manufacturing sector, which involves multiple channels across departments, outsourced services, and the client. The digital process offers a centralized contract repository that can be accessed as required by the intended users.
Conclusion
Tracking contracts and their information across the company manually is a time-consuming task and one of the major gaps in the commercial process for manufacturers.
By introducing AI-integrated contract management software for the manufacturing sector, these firms can cut down on contracting inefficiencies and automate the management process of contract lifecycles.
SignDesk offers a smart platform for manufacturing businesses to seamlessly manage all their official contracts. CONTR.ACT offers an AI-based solution using which manufacturers can automate their contract management processes and introduce speed and efficiency into their workflow.
Contact one of our sales professionals to learn more about how our Contract Lifecycle Management works.
Get a free trial now!