Gone are the days when we struggled to store piles of files on shelves or a storage unit. With digitization taking the business world by storm, physical copies of all kinds of documents gradually become a thing of the past. And this is very true for contracts and other enterprise legal documents as well. In the initial stages of the transition, the documents were created and stored in silo systems, leaving no scope for org-wide visibility. However, the genesis of Contract Management Systems (CMS) has centralized the entire process, starting from storing, organizing, accessing, and reviewing, no matter the location.
Contract Metadata – the invisible protagonist
Embarking on the digitization of Contract Management is a tough call. It is due to the arduous task of discovering, scanning, and converting contracts to a machine-readable format conforming with a specific CLM system. Here comes yet another significant process, without which the system cannot reach its true potential or deliver its purpose. Yes, we are talking about contract metadata!
Whether the metadata part is left empty or updated wrongly, the goal of benefitting from the deployment of a Contract Lifecycle Management (CLM) system can never be realized. To understand the importance of contract metadata, we first need to know what exactly it does.
Digital Contract Management is the best alternative to the conventional process owing to its galore of benefits. And, it is the metadata that makes it happen. Interesting right? When you delve deep into the power of contract metadata, the findings will be quite astonishing. It is ideally the factor enabling:
- Search capability within a CLM system
- Access to inputs for new contracts
- Effective tracking of contracts for updates and key events
- Delivery of insights for business decisions
- Streamlined communication between the teams involved
The role of Contract Metadata in scaling a business
The title might seem overstated, but looking into the reality will change your perception. For instance, the whole purpose of moving from a paper-based contract management system to a comprehensive digital solution is to save time, minimize errors, and optimize business processes. Business organizations that have adopted a CLM system enjoy many benefits to the extent of bolstering their brand value.
When discussing the merits an organization reaps out of a CLM solution, the real catalyst is contract metadata. On a superficial level, it might appear as something to organize contracts. Well, that might be the case to start with. But its job doesn’t end here.
Let’s say you want to identify all contracts based on an author, executed date, or the type. This very ability is built in a CLM system using the metadata. While this helps significantly in the search and discovery of contracts, the benefits extend further. This capability also provides you with the visibility of task distribution, which is vital to track the progress of a project. So, it is not only about saving time but bringing transparency to the entire contract management.
Metadata is also the tool to link dependent contracts and allied documents, so you would no longer have to remember the entire list of documents connecting to a particular contract. Thus, you get to fill multiple needs with one deed!
Risk can be called a closely associated term with contract management. Every organization is bound to build a risk management strategy to minimize the impact on business and steer the efforts towards their goal. And, we can say metadata is a harbinger of compliance issues by triggering the tool to flag documents of concern. Reaching this level of accuracy in identifying potential risks by the CLM system is feasible only with the right metadata. You can also categorize and tag vendors and suppliers if they are of high risk or benefit to the business. This data serves as an evidence-based insight for your business decisions.
As you get to track all contracts and their performance/outcomes at a click of a button, you are equipped to distinguish the truly beneficial business relationships. This visibility gives you an edge to pursue the right customers and vendors who can add value to your business and be a catalyst to sustain its excellence.
So, it is perfect to say that you stand to benefit in one swell swoop with contract metadata. However, the results are dependent on the quality of metadata captured. The one-size-fits-all approach definitely would not help here. You need to thoroughly analyze your needs and contracts’ workflow before getting on with the metadata extraction. Making a list of what you would like to capture from each of your contracts is the first step towards building a truly-reliable CLM system. Hence, you cannot take any chances with it.
So, how do you ensure the accuracy and effectiveness of contract metadata extraction? Leave the task in the hands of experts. Yes, outsourcing the process can unfold many benefits beyond your expectations. To rest assured, watch the video to learn how contract metadata is extracted by highly efficient CLM experts. To know more, talk to CLM experts at Cenza, a preferred partner for Ironclad and ContractWorks.