5 Challenges from Traditional Contract Management System & How to Avoid Them

Ouch! Your Old-School Contract Management System can pinch you hard as well, by the way!

According to McKinsey. Missed deadlines, hidden fees, and misplaced agreements add up to a whopping 10% of lost value.That's a significant chunk of revenue vanishing into the thin air of poor contract management systems.

Just think paper-based contracts stacked in filing cabinets, spreadsheets scattered across different departments, and email chains overflowing with revisions. It's the "handshake and hope for the best" approach, often plagued by inefficiencies and hidden risks.

Instead, modern contract management tools and methods offer a better way out of this paper-fueled purgatory.

In the next section, we'll shed light on the five biggest foes of traditional contract management and offer actionable strategies to vanquish them, along with how you can utilize PACT by Optimizory for efficient Contract Management for your company or organization.

However firstly, lets understand our problem properly:

What is traditional contract management?

Traditional contract management refers to the manual, paper-based, and often decentralized methods of handling contracts within an organization. Precisely speaking, take it as like, filing cabinets overflowing with folders, emails with attached PDFs, and spreadsheets documenting key dates and obligations. It's the classic way of doing things, and while it has served businesses well for decades, it comes with a growing list of challenges in today's fast-paced and digital world.

What are 5 Challenges in a Traditional Contract Management System?

Traditional contract management systems, while familiar, can be riddled with inefficiencies and risks that hinder your business. Here are 5 key challenges they pose:

1. Siloed Data & Lack of Visibility: Contracts become lost in filing cabinets, email threads, and personal drives, creating information silos and hindering visibility into contractual obligations. Missed deadlines, hidden fees, and overlooked renewal dates become real threats.

2. Inflexible & Time-Consuming Processes: Manual workflows for drafting, negotiating, and approving contracts are slow, error-prone, and lack real-time collaboration. This consumes valuable time and resources that could be better spent on core business activities.

3. Non-Compliance & Risk Management Issues: Manually tracking obligations and ensuring compliance with regulations exposes your business to potential legal and financial risks. Identifying and mitigating risks becomes a manual, tedious process, leaving room for costly oversights.

4. Inefficient Search & Analysis: Extracting insights from contracts buried in physical or digital folders is cumbersome. Identifying key clauses, analyzing obligations, and assessing risks in large contract portfolios is a labor-intensive and inaccurate process.

5. Limited Scalability & Collaboration: Traditional systems struggle to handle growing contract volumes and complex collaboration needs. Sharing and tracking contracts across departments and stakeholders becomes a logistical nightmare, hindering overall agility and efficiency.

These challenges underscore the need for a modernized approach to contract management. By embracing contemporary solutions like Contract Management Softwares ( for example. PACT by Optimizory that is seamlessly into your pre-existing Jira Workspace) businesses can overcome these obstacles and unlock the true value of their agreements.

How do you overcome contract management challenges?

Conquering the beast that is traditional contract management challenges requires a multi-pronged approach. Here are some key strategies to tackle each of the five common enemies we identified:

1. Break Down the Silos:

• Centralize your contracts: Invest in a modern Contract Management system that serves as a single source of truth for all your contracts, accessible from anywhere, anytime.
  One of the Best recommendations for a Contract Management System is Pact by Optimizory, that comes handy and simple enough!
• Automate data capture: Integrate your Contract Management Tool with other business systems to automatically pull relevant data, eliminating manual data entry and redundancies. PACT is already seamlessly integrated within your JIra workflows, so that hassle is straight off chopped away with PACT.
• Implement clear governance: Establish ownership and access protocols for different contract stages, ensuring everyone knows their role and responsibilities.

2. Streamline the Workflow:

• Embrace templates and automation: Utilize pre-built contract templates and automated workflows for routine tasks like approvals and deadline notifications.
• Leverage collaboration tools: Use built-in features for real-time document editing, discussions, and version control to streamline collaboration and decision-making.
• Adopt digital signatures: Eliminate the need for physical signing and expedite contract execution with secure digital signatures.

3. Enhance Compliance and Risk Management:

• Build automated compliance tracking: Implement Contract Management Tools features that automatically highlight relevant regulations and deadlines, minimizing compliance risks.
• Conduct continuous risk assessments: Utilize AI-powered tools to analyze contracts for potential risks and trigger warnings for proactive mitigation.
• Integrate with risk management frameworks: Connect your Contract Management system to your broader risk management strategy for a holistic approach.

4. Empower Search and Analysis:

• Utilize advanced search tools: Leverage AI-powered search capabilities within your Contract Management to quickly find specific clauses, keywords, and contract terms across your portfolio.
• Extract key insights: Employ analytics dashboards and reporting tools to identify trends, track KPIs, and gain valuable insights from your contract data.

5. Scale Up and Collaborate Seamlessly:

• Choose a scalable Contract Management solution: Opt for a platform that can handle your growing contract volume and integrate easily with future technology advancements.
• Foster cross-departmental collaboration: Encourage information sharing and joint workflows across departments and stakeholders using centralized contract data and collaboration tools.
• Utilize external collaboration features: Enable secure contract sharing and collaboration with external partners like vendors and customers through your Contract Management system.

Remember, overcoming contract management challenges is an ongoing process, not a one-time fix. Continuous evaluation and improvement are key to maximizing the value of your contracts and ensuring your business operates efficiently and confidently in the modern contract landscape. So, take heart, fellow business warriors, the tools and strategies are at your disposal.

How can contract management be improved with PACT by Optimizory?

PACT by Optimizory breathes new life into contract management for existing Jira users. By seamlessly integrating with familiar workflows, PACT erases the misinterpreted lines between agreements and daily tasks, saving time and effort. Its custom fields transform Jira issues into financial powerhouses, meticulously tracking budgets, deadlines, and deliverables.

Say goodbye to data scatter! All crucial contract information resides in a centralized dashboard, offering instant insights into milestones, risks, and overall status. But PACT doesn't stop there. It dives deep into the heart of your agreements, allowing you to dissect specific requirements, monitor negotiations, and pinpoint potential issues before they snowball. And because security is paramount, your contracts rest safely within the secure confines of your Jira Cloud.

Finally, PACT empowers collaboration and data-driven decision-making by letting you export graphs and contract information for further analysis and sharing. In essence, PACT is the missing piece that transforms your mismanaged contracts into seamless and smooth automated ones!