What’s the difference between document management and a contract management system? This is a common question in contract management.
Although they look similar, they serve very different purposes. A document management system cannot handle contract administration. However, a contract management system is not the best way to manage paper. Each system performs different tasks, which can impact how these papers and contracts will be handled.
Let’s take a look at what the differences are between document management and contract management system.
What Is a Contract Management System (CMS)?
According to contractsafe.com contract management software is software that manages contract lifecycles. It allows users to edit, track instantly, and revise contracts. A CMS is a central repository that stores all your contracts, drafts, templates, and other information. This allows for easier sorting, searching, filtering, and filtering. A CMS’ main purpose is to create, negotiate, amend, sign, and analyze all your legal contracts. A contract management system’s ultimate goal is to automate the contract management process, thereby increasing efficiency.
Most contract management systems allow users to create and store templates. These templates can then be used for future contracts. This allows your team to save time and avoid creating new contracts for every occasion. For easy collaboration, other legal team members can log in with their credentials to access these templates and any active contracts. Users don’t need to send contracts via email, and there is no risk of them being lost.
Many CMS solutions today integrate eSignature technology to help save time and money. All contractual parties can log into e-signature integration to sign instantly, reducing turnaround time and delays.
A quality CMS will provide data analytics tracking and lifecycle monitoring after signing a contract. The CMS compiles data automatically for you and provides a dashboard that allows you to view the data. This allows you to analyze and take action to correct any issues quickly. This applies to all phases of tracking contract lifecycles. A user-friendly dashboard makes it easy to see where you are in the contract management process and can ensure that it happens promptly. The contract tracking system automatically tracks these items.
What’s A Document Management System?
Document management systems (DMSs) are used to create, store, retrieve, and manage documents. DMS allows secure collaboration on documents. Collaboration on documents can include editing, version tracking and audit trails. Document management systems are designed to improve organization and efficiency. This allows employees to collaborate seamlessly and create document-based projects. In addition, a document management system allows employees to reduce the need to rely on email and other communication types due to the centralized and collaboration-friendly software offered by a DMS.
Most document management systems allow users to keep track of all details about each document. You can easily access details like the creation date, author, most recent editor and what the document is related to or associated with. Also, you can see document tags, size, and document tags.
DMS makes it easier to organize these details by categorizing them and making it easy for users to search through all the documents and data within the repository. This allows employees to quickly find what they are looking for without going through thousands or hundreds of documents.
A DMS is an excellent tool as it allows certified users to control documents completely. You can set permissions to allow users to view, edit, or revert previous versions of documents. DMSs can be used to reduce the amount of paper needed and stored. A DMS makes it easy to collaborate with colleagues and send them documents. A DMS allows you to collaborate effortlessly with clients and business partners outside your organization.
What system do I need to use?
Depending on the specifics of your company’s goals and objectives, you may pick any approach. If you are in the legal department, as an example has to deal with a substantial number of complicated contracts regularly It is highly recommended that you make use of a contract management system to boost your productivity and results. It is possible to investigate the possibility of a document management system that’s well-organized and controlled to aid in the storage and management of documents.
CLM systems are designed for contract management in an organization. CLM systems simplify the contract management in all phases. Although they are not suitable for large-scale contract administration, they can be useful for managing certain aspects of contracts within the department. In this case, they could play multiple roles. They can be linked to knowledge management systems and matters management systems to enable the creation of documents from different law departments in a collaborative environment.
Document management systems have a wide range of functionality. They do not include specific features that are specific to contracts. These can be integrated into CLM systems such as automated obligation management, approvals or associated automated notices. However, they can be modified to assist in managing contracts within the legal department. They are particularly useful in contract drafting, as they provide templates and examples. They can facilitate approvals and collect information about profiles for future contract management.