How to prepare your business for contract lifecycle management - collecting your business's contracts (Part 2 of 2)

If you've completed the actions from our first article on preparing your business for Contract Management, then you're ready to move on to collecting your business contracts.

This can be challenging and, if you’re not prepared, it can rapidly halt the momentum of your project, so it pays to put the process in place as early as possible.

If your business is mature and decentralised then you will likely encounter a variety of different ‘systems’ for storing contracts. Some business units may be managing contracts using Excel or storing them in email accounts. Others may have a hard-copy filing cabinet containing their contract archive.

Others may have no system at all and therefore present not only a logistical challenge but a potentially serious source of business risk.

Your focus should be on building awareness amongst the management group responsible and then following with a program of communications to drive delivery.

How to collect all your business’s contracts

Ultimately, all of your business's active contracts need to be collected. Depending on your confidence in your process and team, you can either cast the net wide and look to get all contracts sent in or potentially start with a specific subset.

You should be prepared for the rate of contract collection to be low to begin with. The people involved often have heavy workloads, may be unable to give any priority to the collection process and may not have direct or immediate access to their local contract documents, especially if they are paper-based.

The first thing you need to do is raise some initial awareness of the project. The best method for this is a communication from enterprise-level management to appropriate business unit management requesting assistance and commitment to the task.

You then need to be persistent and organised with your process and keep track of response rates.

Buy-in from different management groups is vital because by the very nature of the process, you’re unlikely to have an exhaustive list of contracts to work from to begin with.

You’ll be reliant on the management group to be diligent and motivated to uncover and provide a full list of their contracts.

Your 10-Point Checklist for Collecting Your Business's Contracts

1. Establish the selection criteria to be used if a subset of active contracts is required initially
2. Formulate a communication for issue by senior management to business unit leaders very early in the contract management planning process, explaining the CLM project and its rationale, describing the need for electronic copies of active contracts and associated documents, requesting transfer of a copy of those documents to a specified place and the timeframe for doing so, and asking for the contact details of a business unit representative who will oversee the collection process
3. Set up an electronic, contract repository for storage of the contract document copies. For ease, this will likely take the form of a contract management software but may initially be a folder within a shared drive.
4. Send repository usage instructions to each business unit representative
5. Monitor document delivery rates and work with business unit representatives when necessary to overcome slow delivery
6. Regularly report business unit delivery performance to senior management to allow relevant responses to low rates
7. Regularly check received documents and convert scanned contract images into searchable format documents
8. Obtain searchable translations of contract documents that are not written in the specified common language. Remember to have some budget set aside for this if there are no internal skills available with experience in translating legal documents
9. Update all received contract documents using the agreed naming conventions
10. If you’ve not been using your contract management solution to manage the process to this point, you can now upload all the renamed documents to it.

What's likely to happen is that you'll receive an initial rush of responses and contract details and this will then tail off. You can almost always assume that there are more contracts out there so further investigation and communication is recommended.

Once you have your contracts recorded in your central repository and prepared for digital transformation in the contract management function, you can start to manage them more effectively and pro-actively.

To help you with this process, we've put together a free 38-page ebook, covering all the stages of the contract lifecycle.