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What are the Pros and Cons of Contract Management Software?

Yellow background. Circle crop of photo of man working on laptop, with a graphic overlay of him checking boxes. Title: What are the Pros and Cons of Contract Management Software?

In today’s fast-paced world, it’s crucial to manage contracts efficiently. Many businesses turn to contract management software to help them oversee contracts through various life cycles, streamline their operations, and manage compliance, among other things.

If you’re looking into contract management software, knowing where to begin and which option is best for your business can be daunting. And while contract management software offers many benefits, it does come with some drawbacks.

But don’t worry—we’ve got you covered.

Read on for everything you need to know about the pros and cons of contract management software.

What is Contract Management Software?

Contract management software is a tool designed to make your contracting process more streamlined and efficient. These tools automate many steps of the contract management process that are traditionally manual, saving you time and resources.

Contract management software also allows you to manage your contracts all on one platform rather than having to switch between multiple platforms and tools. This makes it easier for business teams to create, review, and sign contracts.

Fast-growing companies often use contract management software to scale their contract workflow without losing productivity. Teams who may utilize contract management software include legal, finance, sales, operations, and human resources teams.

Pros of Using Contract Management Software

Contract management software brings some major benefits for businesses looking to increase efficiency, collaboration, and risk management efforts. Here are a few.

Increased Efficiency

Since contract management software eliminates many of the manual steps of the contract process, it allows companies to scale their contract workflow and manage more contracts without additional human labor.

Improved Collaboration

When managing contracts that involve multiple stakeholders, collaboration is essential. Contract management software allows for improved collaboration across various departments and teams. It provides the ability to collaborate on documents, share them, and communicate within one centralized platform. This reduces the risk of miscommunication.

Enhanced Risk Management and Compliance

Contract management software helps to ensure that nothing falls through the cracks. It provides reminders for things like renewal or termination dates—ensuring contract terms are adhered to. Some tools can also be configured to alert stakeholders of potential legal risks, saving businesses a lot of money and headaches in the long run.

Better Searchability

Since contract management software allows you to store all your contracts within one system, you can find and review contracts quickly. Contract management tools ensure that no contracts are lost. With some tools, you can even search for specific terms or keywords within the contract, allowing you to find what you’re looking for quickly,

Enhanced Security

Saving contracts to your desktop isn’t exactly the best security move. Contract management software allows you to keep contracts in a safe and secure place where sensitive information is protected. Only authorized users can view, edit, and share contracts. This reduces the risk of data leaks and cybersecurity breaches.

There are some compelling reasons to use contract management software, but it’s important to also evaluate the drawbacks that can come with these tools.

Cons of Using Contract Management Software

You may determine that the pros of contract management outweigh the cons, but it’s helpful to understand the issues you may run into when implementing contract management software.

Dependency on Technology

Contract management software relies on technology—which means it’s subject to technical errors and downtime. This is true of any software that relies on servers, networks, and updates. When evaluating contract management software, make sure the platform you choose has adequate technical support. And make sure you have a backup plan in case something goes wrong.

Implementation and Learning Curve

Contract management software will require implementation. Depending on the tool you choose, this may not be too heavy of a lift, but it will more than likely require some time and resources to set up and configure. You’ll also need to ensure that new users are trained to use the software correctly. This initial setup and learning curve could cause a temporary decline in productivity.

Complexity

Contract management software can be highly customizable, which can be both a pro and a con. The level of flexibility that comes with some tools can lead to complexity and may require technical expertise to set up. This complexity can mean that organizations need to dedicate technical resources to get the software up and running efficiently.

Cost

Of course, contract management software comes with a price tag. The cost depends on the provider and the needs of your organization. Small businesses may find the software to be too expensive.

Less Human Interaction

With contract management software handling some of the manual aspects of contract management, less human-to-human interaction is needed. The relationship-building aspect of contract management is important and isn’t something that you’ll want to eliminate entirely. Human communication is invaluable when it comes to resolving contractual disputes and issues.

Features to Look for When Evaluating Contract Management Software

When evaluating contract management software, you’ll likely want to keep an eye out for these helpful features.

Approval Workflows

Approval workflows allow users to get contracts reviewed and approved quickly. You don’t want approvals to slow down the contract approvals process since these delays can lead to lost revenue. Some tools offer the ability to send approvals reminders to keep things progressing.

Native e-Signature

Native e-signature functionality allows contract signers to sign legally-binding contracts from anywhere—including from their phones. This also eliminates the need to use a different tool for signing contracts.

Browser-Based Redline Functionality

Browser-based redlining allows you to negotiate contracts in real time. The process slows down when you have to switch between different documents and tools to negotiate and redline contracts. And it can be downright frustrating, not to mention difficult to track changes.

Renewal Reminders

With automated renewal reminders, you won’t have to worry about keeping track of renewal dates in another system or spreadsheet. Automated renewal reminders help to ensure that you don’t miss important renewal dates.

What is the Best Contract Management Software?

Many tools on the market today may work for you depending on your business needs. Here are some of our top picks.

1. PandaDoc

PandaDoc is an all-in-one solution for businesses of any size.

Benefits:

  • Unlimited documents, users, and e-signatures
  • 24/7 customer support on paid plans
  • E-signature
  • Real-time notifications

Cost:

  • 14-day free trial
  • Free eSign: Get unlimited legally-binding signatures and document uploads at no cost
  • Essentials: $19 per month per user
  • Business: $49 per month per user
  • Enterprise: A personalized solution with an unlimited number of users plus additional custom features

2. DocuSign

DocuSign is a great solution for small businesses that need access to affordable contract management tools.

Benefits:

  • 24/7 chat support
  • Flexible workflow configurations
  • Real-time comment notifications
  • Recipient reminders

Cost:

  • 30-day free trial of e-signature solution
  • Personal: $10 for a single-user plan. Includes five documents per month.
  • Standard: $25 per month per user.
  • Business Pro: $40 per month per user. Includes bulk-send functionality

3. Concord

Concord is ideal for large businesses for its enterprise-grade features.

Benefits:

  • Unlimited contracts and e-signatures
  • Bulk-upload features
  • Live editing
  • Chat feature
  • Deadline reminders

Cost:

  • 14-day free trial
  • Standard: $17 per user per month for bulk-send and amendment management
  • Pro: $49 per user per month. Includes several integrations.
  • Enterprise: Get a custom quote for an SSO and custom branding

4. Outlaw

Outlaw is great for businesses of any size. It allows you to track key data points for enhanced visibility.

Benefits:

  • Unlimited contracts, storage, and e-signatures
  • Quick setup
  • Live chat support
  • Native e-signature capabilities
  • Cloud-based redlining

Cost:

  • $125 per month per user with full control
  • $60 per month per user for collaborators without full control

5. ContractWorks

ContractWorks is quick to set up, offers customization, and utilizes AI technology.

Benefits:

  • Unlimited users
  • 24/7 support team
  • Several customization options
  • Automated reminders
  • Built-in e-signature

Cost:

  • Standard: $600 per month, five e-signature licenses, and up to 2,500 documents
  • Professional: $800 per month for 10 e-signature licenses and up to 10,000 licenses
  • Enterprise: $1,000 per month for 20 e-signatures licenses and unlimited documents

6. Agiloft

Agiloft offers solutions for companies of all sizes and is highly customizable.

Benefits:

  • Free plan for SMBs
  • Free online training
  • Unconditional guarantee
  • 99.9% uptime service level agreement

Cost:

  • You can choose to pay on a monthly, quarterly, or annual basis. All plans start at $65 per user per month, and the price increases depending on the number of users you need.

Bottom Line

Contract management software offers advantages in terms of efficiency, scalability, collaboration, risk reduction, and security. When evaluating whether a contract management solution is right for your organization, you’ll want to consider the implementation costs, technical complexity, and features that your organization needs.

Be sure to weigh the pros and cons of contract management software. Do your research to choose a tool that will meet your specific needs and improve your overall contract management processes.

And if you need help scaling your legal teams along with your contract management processes, get in touch.