Obligation Management-2

In our previous blog post, Obligation Management-1, we established the importance of managing contractual obligations well. Today’s blog post will address the reasons why it is difficult to ensure obligations are successfully met by all parties involved.

A lot of enterprises rely either on manual methods or on Microsoft Excel to store contract data. However, when there are a lot of contracts to be managed, Microsoft Excel lacks the scalability and functionality to cater to an organization’s dynamic requirements. The main issues faced by organizations in tracking obligations are:

Too many to track: Large organizations have an overwhelmingly large number of contracts containing an even greater number of obligations. Keeping track of such a huge number of obligations, without any way to configure alerts and reminders, is an arduous task.

Difficult to determine: Identifying obligations in a sea of complicated technical wording, page-after-page, makes the process even more complicated.

Taxing to enter data manually: Updating data for milestones, penalty clauses, and more, in spreadsheets, is cumbersome and error-prone. Even if the data is laboriously entered, tracking it effectively is still a problem.

Obscure ownership: There is often a lack of clarity regarding the ownership of obligation management duties for specific contracts. Often, the spreadsheet owner and the person responsible for managing the obligations of a specific contract, is not the same.

Data across disparate systems: Actual and target value comparison is difficult to observe since actual value data is spread across multiple disparate systems such as ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), FMI (Financial Management Information) and HRM (Human Resource Management).

Furthermore, obligation management isn’t something that you do once and then rest easy. It needs to be performed on an ongoing basis, throughout the lifecycle of every contract. There is, however, an easy way around this. To manage such a staggering number of contractual obligations, one needs an automated system that can offer configurable alerts, reminders, and act as a secure repository of all contracts and supporting documents with user-defined access.

Our next blog post will describe how a CLM solution effectively takes your obligation management woes away. Stay tuned.
For more information on contract management, write to us at info@ultria.com.

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Author Arthur Raguette

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