Most business owners and executives understand that the efficiency of their organizational work flow is important to the success of their business. The fact is, delays simply cannot always be anticipated and are unavoidable. Events will occur that we cannot plan for that take us off task. Whether their impact is significant or minor has everything to do with whether we can easily return to well-defined, predetermined procedures, after an interruption is no longer present. Not having a disciplined work flow can negatively impact operations and hinder productivity. In the case of contract management, maintaining strong work flow is crucial, as contractual documents and agreements typically contain obligations that must be honored throughout the life of a contract.
The correlation between document management and work flow was brought up in a recent Accounting Web article. Brock Philip, the article's author, suggests work flow begins immediately during the document management process, and it may need to be adjusted as a result of changes in the working environment.
"Work flow starts at the point at which documents are gathered from any source as they stream into your firm," Philip writes. "At any time, there are multiple unique work flows occurring within the firm, all of which are subject to change as the ecosystem of a firm changes. From the gathering phase of document management through process, storage, and delivery, every task for each engagement is subject to a distinctive work flow."
One example is during contract reviews. Contract reviews require an efficient and organized work flow since it is all too easy for documents to become lost, the wrong versions to be inadvertently reviewed, for reviews to be postponed indefinitely (then forgotten) as other urgent tasks are discovered, and for reviews to take excessively long to complete. Such tasks require the ability to impose document work flow structure, to be able to adapt and change work flow as reviewers discover the need for changes and for the overall process to be tracked to keep everything moving forward. Contract Life Cycle Management (CLM) solutions dramatically improve the ability to create, manage and monitor contract work flows.
Efficient work flow requires every party involved in a particular project to complete their tasks in a timely manner. To accomplish this, individuals need to be notified when tasks are assigned to them and they must be cognizant of pertinent information, such as what their respective task is and when it must be completed.
Contract Lifecycle Management (CLM) solutions allow businesses to keep reviewing parties on point during the creation and maintenance of a contract, as well as provide visibility to others who monitor work flow to assure that tasks are not forgotten or delayed. If applicable parties know they have a task to complete and all pertinent details of that task, they will likely finish it in a more timely manner, which prevents the entirety of the process from being held up.
Once a contract is finalized and signed, it must be stored in an environment where it, and its related data is easily accessible and searchable. Unfortunately being easily accessible isn’t enough. To manage large number of contractual obligations, contracts must be organized in such a way as to provide visibility as to imminent and approaching tasks and key events. Not only is work flow related to the flow of documents through an organization and the tasks related to them, but also to how responsible parties are notified regarding discrete contractual obligations that exist across all contracts. Without this capability it is only a matter of time that key events are missed and late, or missed altogether.
It can be difficult to assign a cost to ineffective or chaotic work flow, but additional expense does result when contracts are delayed because information is lost and obligations and key action dates are missed and when contracts take an excessively long time to execute. A recent article, available in 2 parts, looks at the financial implications of Contract Life Cycle Management (CLM) solutions for a large enterprise. While work flow improvement is not specifically monetized, it does shed light on many of the different places that CLM can provide benefit to organizations and their bottom line.
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