The risks associated with contracts have an effect on the everyday operations of the business, hence their timely mitigation becomes crucial. At the same time, the more effective the risk mitigation, the higher the time taken for contracts to realize their full cycle. So, then how can companies find a balance for maximum efficiency?
Some of the most common contract risks that businesses face are the regulatory risk/ compliance risk, third party obligation risk, security risks such as privacy and data breaches, financial risks generally stemming from missed obligations or errors in contracts, and reputation risk. Every day, businesses have to face a range of risks with varying complexity, but the good news is that all of them can be tackled with an effective Contract Lifecycle Management (CLM) platform, which translates into:-
- CLM platform that ensures automated contract management workflows, accelerating turnaround by giving visibility and access rights to all the concerned stakeholders.
- Employing or appointing CLM experts who would help the company make the right tradeoff between the risk and opportunities associated with CLM.
- The right CLM tools and the team will help the company create a CLM system that can quickly adapt to the changing business requirements, but also keep consistency and uniformity intact.
- A well-trained CLM team prevents companies from going into firefights to manage risks and rather helps the organizations realise maximum value from contracts and achieve improved compliance
To make the most from an enterprise-wide automated Contract Lifecycle Management solution, it is necessary to assess business objectives, assess the best CLM solution from all the available ones, and employ the right talent who has hands-on experience with the tools. A combination of CLM experts and technologies is the answer to finding the balance between adequate risk mitigation and a quick contracting process.
Today, contract risk is one of the biggest challenges that companies are facing due to its direct influence on the bottom line. Companies are still in the process of becoming more agile to the emerging risks of the 21st century. But as your organization adapts for the better, it is important to understand that there is no way contract risks can be completely eliminated (without going out of business). Hence focussing on mitigating the risks while always being on the lookout for new opportunities is the way to success.