Risks That Multiple Storage Devices Pose to Contract Management

Today’s paperless office is a great thing. But it’s also somewhat of an albatross around the necks of contract managers, administrators, attorneys, procurement officers, and CFOs that can introduce risk and inefficiencies into the contract management process that only gets worse as the organization scales.

Consider the number one culprit – storage devices, or rather the multiple storage devices that characterize today’s working environment.

As data grows, companies are making big investments in storage. In the ideal scenario, all your contract documents are in one place, so everyone on the team isn’t wasting hours searching for contracts in shared drives and Inboxes and weeding out duplicates.

That’s the desired state. We all know the process never runs that smoothly. Consider the typical contracting process.

Screen Shot 2018-12-23 at 11.48.52 AM.png

This workflow assumes that there is one drafter, one reviewer, and one round of negotiations or redlining. But, even in a simple process like this, numerous versions of document files are being created and stored across disparate storage devices. This may not appear to be a problem, until you consider the complexities of contract lifecycle management and why we launched e-Agree.com.  Let’s assume a typical negotiation involves five people, each of whom work through three rounds of negotiations. Just imagine the amount of times a document gets saved, by different people, then calculate the various versions that may or may not be in circulation (as we did below).

Estimated # of Copies with Five Parties Involved (Typical Scenario)

Screen Shot 2018-12-23 at 11.50.24 AM.png

The more versions that exist of a contract draft (internally and externally), the more likely a user will refer to and/or edit the wrong version. Each time a team member opens a contract she must question whether she’s using the correct version – something that can be difficult to ascertain with complete confidence. As a result, older versions may be inadvertently edited or, even worse, wrong versions may be sent to the other party.

Contract drafting and execution can be a major pain, but without a centralized storage capability with enforced “check-in / check-out” policies, it’s almost impossible to ensure a single source of truth and defend against errors.

e-Agree was developed to address this challenge (among others) and centralize deal management in ways not previously possible.

e-Agree lets you instantly access and assess your ongoing contract activities on a single dashboard that gives a global view of all contracts and upcoming contractual events as well as communications by and between your team members and contractual partners – no more searching through email and storage devices. It also automates version control reducing the risk that comes from comparing outdated versions. With e-Agree, you can quickly compare two agreements, track changes, and avoid inadvertent comparisons of the wrong versions during negotiations. Easily track changes and rest assured that your team is always working on the current version.  See more here.

This gives the Legal team complete control over which contract templates to use, eliminating the need for Legal to email a new contract template when updates are made – a process fraught with problems as most employees have already downloaded older versions.  A solution that automates template control will eliminate errors that email-based sharing creates while ensuring that employees use the correct version and form to commence their drafting.

For more insights into the risks and limitation that today’s paperless office tools present to your contracting environment, read our whitepaper: How Decentralized & Divided Contracting Environments Threaten Business-as-Usual.