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Cloud solutions like SaaS offer significant scalability, efficiency, and accessibility to enterprises that use them. As more organizations embrace cloud services, effective contract management is critical for better cost optimization and vendor relationships.
Cloud contract management is a comprehensive approach streamlining the entire contract lifecycle—from draft contract creation and negotiation to execution and renewal. This approach helps organizations maintain control and mitigate cloud contract-related risks.
By leveraging cloud-based contract management platforms, businesses can centralize contract data for renewal automation and financial and SLA-related decision-making and ensure compliance.
This blog explains the nuance of cloud contract management, exploring its significance, challenges, and compelling reasons why organizations should prioritize it as an integral part of their cloud strategy.
What is Cloud contract management?
Cloud contract management refers to the process of storing and managing contracts securely in a cloud environment. Cloud contract management tools are software or technology that help IT and other teams manage the contract process online.
Contract management software is designed to centralize, streamline, and optimize the end-to-end stages of the contract lifecycle—from creating to negotiating and signing to reporting.
Teams can leverage contract management solutions to create, store, manage, and track contracts in a single workspace. You can eliminate your spreadsheets and shared folders and start organizing your contracts in one place.
Why should you prioritize Cloud contract management?
Let's quickly discuss the benefits of cloud contract management:
1. Effective cost optimization
Cloud services often involve complex pricing models. Organizations may overpay for resources without proper SaaS contract management because they won't have access to price benchmarks. Leveraging contract management tools helps optimize costs, identify opportunities for savings, and align costs with budgets.
2. Maintains security and compliance
Failing to adhere to cloud providers' security and data protection policies can result in penalties or data breaches. Cloud-based contract management ensures that enterprises always comply with the cloud providers' data protection policies and secure contracts from data theft.
3. Complete visibility over contracts
Effective cloud contract management lets you get complete visibility over your SaaS contracts. You can easily keep track of contract renewals and analyze vendor performance over time to make better renewal decisions. You’d never miss out on contract renewals anymore.
4. Convenience & Accessibility
Contract repositories stored in clouds can be accessed anywhere and from any device. Whether the team works from the office or anywhere else, you can access, analyze, and even verify contracts using electronic signatures.
CLM software with cloud storage will allow you to organize documents and set up reminders and alerts easily. You can also look for your documents by typing a snippet of text - any format, PDF, document, or even image.
5. Cost savings
Cloud contract management ensures timely renewals by automating workflows and sending reminders well before expiration. This allows for analyzing usage, preparing negotiation plans, and strategically engaging suppliers to secure optimal terms.
Proactively renewing contracts avoids auto-renewals, potential service disruptions, and additional costs while providing ample time for due diligence and negotiation leverage.
Challenges in cloud contract management
1. Limited Visibility and Control
Many organizations manage their cloud contracts decentralizedly. Usually, different departments or business units are involved in procuring and managing cloud services, which isn’t a recommended practice.
This type of decentralized approach limits visibility and control over the organization's overall cloud footprint. Hence, effectively monitoring and managing cloud contracts is a challenge.
Centralized contract lifecycle management is crucial as it will provide a comprehensive view of all cloud agreements and establish consistent terms and conditions across the organization.
2. Contract Migration
As you migrate their workloads and data from legacy systems to the cloud, you may face challenges transitioning existing contracts to cloud-based models.
Legacy cloud contracts are not designed to accommodate the dynamic nature of cloud services. Conflicts or misalignments may arise when your needs clash with the cloud provider's contract terms.
3. Vendor Reliability and Lock-in
Cloud services are provided by third-party vendors. Organizations must carefully evaluate these vendors' reliability and long-term viability and assess their compliance and reputation before signing a contract.
Vendor lock-in is a pressing concern, as moving from one cloud service provider to another can be complex and costly due to data portability issues and potential vendor-specific dependencies.
Thoroughly vetting cloud vendors, considering multi-cloud strategies, & negotiating favorable terms for data portability help mitigate vendor reliability and lock-in risks.
4. Data Security and Compliance
One of the primary concerns in cloud contract management is data security and compliance. Organizations today must ensure that the cloud service providers they choose adhere to strict data protection and privacy regulations.
Failure to comply with regulations, such as GDPR, HIPAA, or industry-specific standards, results in penalties and reputational damage. Therefore, ensuring that your cloud contracts explicitly outline your data security and compliance obligations is paramount.
Addressing these challenges requires a proactive approach. It involves robust contract negotiation, centralized contract management processes, and continuous monitoring of cloud service providers and their offerings.
Implementing the strategies mentioned above and the right cloud-based contract management platform can help you efficiently navigate the challenges of the cloud contract ecosystem.
Why do you need a cloud contract management system?
As mentioned earlier, cloud-based contract management software provides organizations with a standardized and systematic platform for storing and managing contracts.
These systems provide your business with mobile contract access, data collection features, automated workflows, and more.
Here are the benefits of using a cloud contract management solution in your organization:
1. It is collaborative
Cloud-based contract solutions facilitate seamless collaboration with teams and stakeholders working from different locations, even remotely. They can also work simultaneously on the same document at any time.
These tools also have collaboration features, such as browser-based contract redlining, automated approval workflows, and contract reminders.
2. It is cost-effective
Cloud contract management solutions typically operate on a subscription-based model.
This payment mode eliminates the need for organizations to pay any hefty upfront amount for hardware, software, and maintenance.
This pay-as-you-go approach allows enterprises to derive maximum value from their resources and optimize their budgets more effectively.
3. It is flexible
Cloud-based solutions are inherently flexible. Cloud contract management solutions allow organizations to scale their contract management capabilities up or down as their needs evolve.
This scalability allows businesses to meet changing demands without stringent infrastructure limitations.
4. It provides complete visibility
A centralized cloud-based platform for managing contracts provides end-to-end visibility into all vendor agreements. It also enables organizations to track and manage their entire contract lifecycle effectively.
This comprehensive view of contracts in an organization facilitates enhanced and faster decision-making, compliance monitoring, & risk mitigation for teams.
5. It has robust security features
Reputable cloud contract management software providers invest heavily in competent security measures. They add powerful security features, like advanced encryption, continuous monitoring, and access controls.
By leveraging these security measures and functionalities, organizations can protect their sensitive contract data without needing costly in-house security infrastructure.
6. It has automatic backups & disaster recovery features
Cloud-based contract management solutions offer robust automatic backup and disaster recovery capabilities that ensure data integrity and business continuity across the organization.
Regular automated backups protect your enterprise against accidental data loss, while disaster recovery mechanisms enable seamless system restoration in the event of unexpected events like cyberattacks or hardware failures.
This secures critical contract data while minimizing potential financial or legal risks.
By integrating a cloud contract management platform into your organization’s workflow, you can benefit from increased cost savings, scalability, and productivity, as well as enhanced security and better collaboration.
With automatic backups, remote access, and end-to-end visibility, enterprises can manage their contracts effectively while staying agile and adaptable in today's ever-changing business landscape.
CloudEagle - The Ideal Cloud Contract Management Platform in the Market
As seen above, managing diverse, complicated contracts can be challenging for teams. It encompasses tasks such as contract signing, negotiation, renewal, and maintenance, and managing them using spreadsheets is not feasible in the long term.
CloudEagle is a powerful cloud contract management platform designed to address these cloud contract challenges. It provides users with a comprehensive cloud-based solution that streamlines the contract management process, optimizes costs, and enhances overall efficiency.
CloudEagle allows enterprises to stay on top of vendor contracts and provides features for everything from contract signing to cost optimization.
Centralized Contract Repository
CloudEagle organizes all your contracts into one unified dashboard, identifying them by integrating them with your internal systems and contract management suites. Its centralized inventory simplifies contract audits and data retrieval.
Our platform automatically extracts and populates contract metadata into the platform, enabling you to start tracking them efficiently.
Dynamic filters are available to help you retrieve the required contracts from the repository without hassles.
License Optimization & Management
Through direct integrations with applications, CloudEagle will provide an extensive overview of individual licenses and their usage. You can configure license reclamation workflows for low usage, facilitating optimal license utilization and maximum return on investment.
Workflows will automatically de-provision users from licenses for low usage and harvest them for the next user. With license reclamation workflows, you can ensure that licenses are utilized efficiently.
Streamlined Renewal Workflows
CloudEagle’s automated workflows can streamline contract renewals effectively. Reminders will be initiated 90 days in advance, and the appropriate stakeholders will be alerted via Slack and email.
You’ll have enough time to analyze your usage, prepare a negotiation plan, and ace your negotiations.
Customized Reporting
CloudEagle offers 43 report types across multiple categories. These reports equip your teams with customized insights for cost optimization, budget planning, and other key aspects of contract management.
Assisted Buying Expertise
CloudEagle's assisted buying functionality is designed to help organizations negotiate better and confidently.
Expert SaaS buyers use usage data and the latest pricing benchmarks to negotiate on your behalf. This tool can help you procure the right products at the right prices, whether with new or existing vendors.
Automated Procurement Workflows
Flexible contract terms necessitate an effective automated procurement procedure. CloudEagle's automation-powered workflows, including customizable intake forms, help businesses speed up their SaaS purchase processes, reducing manual efforts and enhancing efficiency.
Seamless Slack Integration
With CloudEagle's integration with Slack, you can enjoy features beyond mere notifications and alerts. The Slack integration in CloudEagle allows users to submit purchase requests and manage renewals directly within the Slack platform, fostering seamless collaboration and streamlined processes in the organization.
Simplified Vendor Research
CloudEagle simplifies vendor research by providing honest reviews from reliable platforms like G2 and Capterra. It also offers pricing and feature comparison features that empower users to make informed decisions when evaluating potential vendors.
Conclusion
Effective vendor contract management is no longer an option but is necessary for business success.
As the complexity and volume of cloud-based services continue to grow, organizations prioritizing cloud contract management will be better positioned to navigate the intricacies of the cloud ecosystem and drive long-term growth.
CloudEagle's blanket suite of features, including centralized contract repositories, automated workflows, customizable reporting, contract negotiation, and assisted buying expertise, empowers organizations to gain complete visibility into their SaaS landscape.
The solution ensures efficient procurement, license optimization, and cost-effective software investments.
By embracing CloudEagle's innovative cloud contract management solution, businesses can unlock the true potential of cloud computing while maintaining control, compliance, and a competitive edge in an increasingly digital world.
Book a demo for our solution today.
