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ROI on Contract Management Software

  • How to measure the true return on investment in contract management software.

  • Contract Management Myths

    Solely an administrative cost

    It is tempting to see contract management as an administrative burden. Spreadsheets are good enough to keep a list of contracts together.

    Purely a process problem

    Many business people see the legal department as the “business interruption team,” meaning that contracts take a long time. The myth is that improving the legal department’s contract drafting process will accelerate contract production.

    Document management

    Yes, contracts are reduced to documents in the vast majority of business deals. The myth is that contract management is just about document management. If we know where the documents are, then the contracts are managed.

  • Contract Management Facts

    Improves financial performance

    Businesses operate on a network of contracts for revenue, expenses, assets, and liabilities. Careful management improves financial performance. Software designed to expose the financial structure of contracts and to identify risks can help grow the business.

    Demands expertise

    To extract more value from contracts, requires a thorough understanding of the risks and opportunities embedded in the terms of a contract. Reports that show performance obligations, insurance requirements, and indemnification provisions add more financial value than processing a language change more quickly.

    Promotes better risk management

    When contracts are managed as data, instead of words, they can provide insight into the business, especially for the entire contract portfolio.

  • Return on Investment calculation

    DIRECT FINANCIAL CONSEQUENCES

    Benefits

    Protect revenue

    Prevent revenue contracts from expiring, structure revenue contracts for best revenue recognition.

    Expense control

    Prevent unexpected auto-renewals of expense contracts.

    Costs

    Licensing

    Fees, users, document storage

    Subscription or maintenance

    Annual fees, escalations

    Services

    Third party services, internal service requirements

    RISK MANAGEMENT

    Benefits

    Identify and prevent breach of contract, by either party.

    Manage legal policy exceptions, like choice of law and indemnification.

    Costs

    Unexpected losses

    Adverse legal rulings with unknown scope.

    Loss of remedies

    Lack of data prevents timely use of contractual remedies.

    COMPLIANCE REQUIREMENTS

    Benefits

    Avoid or mitigate regulatory violations with compliance reviews based on external legal requirements.

    Costs

    Government regulatory reviews.

    Third party enforcement

    Private enforcement rights.

  • Return on Investment for Lextree

    DIRECT FINANCIAL CONSEQUENCES

    Benefits

    Protect revenue

    Prevent revenue contracts from expiring, structure revenue contracts for best revenue recognition.

    Expense control

    Prevent unexpected auto-renewals of expense contracts.

    Costs

    Lextree provides an annual subscription for unlimited users and unlimited contracts.

    All services are provided on a fixed bid basis.

    RISK MANAGEMENT

    Benefits

    Identify and prevent breach of contract, by either party.

    Manage legal policy exceptions, like choice of law and indemnification.

    Costs

    Lextree provides insight to the entire contract portfolio for proper risk management.

    Track legal provisions by document or contract.

    COMPLIANCE REQUIREMENTS

    Benefits

    Avoid or mitigate regulatory violations with compliance reviews based on external legal requirements.

    Costs

    Lextree support compliance obligation tracking for any type of regulatory requirement.

  • Last updated on .
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