Transparency, efficiency and accountability have long been high on the government's list of priorities for its agencies. Due to the role technology plays in assisting these efforts, President Obama has mandated that federal agencies embrace new technologies, particularly when it comes to managing documentation. To this end, the administration has ordered all federal agencies to transition to paperless processes, which really speaks to the overall trends found in both public and private sectors.
Streamline Business Processes
In truth, most organizations can benefit from going paperless. Not only does this mitigate the risk of losing physical documentation from theft, misplacement or a natural disaster, it can also promote compliance, particularly when managing contracts. Going paperless is often seen as a means to preserve natural resources. It also offers the opportunity to automate and streamline business processes and to provide easier access to information. For businesses managing a portfolio of contracts, comprehensive Contract Lifecycle Management (CLM) solutions ensure documents are easy to locate, easy to search, easy to review, easy to track and easy to share, all required elements to achieve good transparency, efficiency and accountability.
A Lack of Transparency
A lack of transparency does not necessarily indicate that an organization is trying to hide something. Often, the business might simply not know where a document is located or after several months have elapsed, exactly what it contains. Difficulty in finding documentation can hurt overall efficiency, not only by disrupting the flow of operations, but also by limiting access to information it truly wishes to access and share.
Suppose a company is required to report information pertaining to a contract at regular intervals. The required information might reside in any number of documents related to the contract or to a previous version. Using a CLM solution, the required document(s) can be discovered quickly, a summary of the data related to the document (its metadata) can be found and easily reported and any information that was not recorded as a part of the meta data can also be searched internally and discovered across all documents in the complete document data base. Internal document search capability, provided by enabled CLMs, helps companies to better manage and limit their liability exposure when require information is not a part of recorded meta data.
CLM Solutions Help with Sarbanes-Oxley Compliance
Once a company exceeds a certain size, it becomes virtually impossible for chief executives to know every detail that occurs within their enterprise, including the details of their contractual obligations. The accountability to which CEOs are now held, with the passage of Sarbanes Oxley and other regulatory requirements, is comprehensive. Following major corporate and accounting scandals at companies like Enron, it became clear that investors needed a greater sense of what was going on in the companies they invested in. Those who were impacted by such scandals lost billions of dollars. No longer is “I didn’t know” considered to be an acceptable reason for non-compliance, and penalties can be severe, including imprisonment for as long as 20 years. CLM solutions make it easier for CEOs and CFOs to see their contracts “big picture” and to be able have staff monitor compliance though built-in contract auditing functionality. This visibility affords executives the ability to confidently provide better, more accurate required information and transparency to shareholders.
CLM Solutions: Business Transparency, Efficiency, and Accountability Enablers.
It is a given that the vast majority of companies wish to avoid contractual agreements that are illegal or unethical. Given recent history, it is also understandable that investors and regulators are wary of business activity that appears overtly secretive. Sharing information of course provides challenges. Companies naturally want to limit the information they share externally, so as to not disadvantage themselves by educating their competitors. It is intuitive therefore, that equipped with a better understanding your own information, it is also much easier to skillfully disseminate information in ways that both protect your company confidential information and that will meet the letter of the law. Through a better understanding of the contracts landscape, CLM solutions provide a means to better achieve this goal. CLM solutions are business transparency, efficiency, compliance and accountability enablers.
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