Why do SMEs need to set up an ERM Process?

For any business to taste success, it must face several threats and cross the hurdles of finding solutions. To see any explanation, implement a planned enterprise risk management (ERM) method to mitigate and control the risk of daily operations, accounts, and strategic direction within the organization. Also, to take control in case of any unforeseen events.

The purposes of the ERM are to:

• Improve the organization's risk management capabilities by upgrading the already existing ERM functionalities.
• Consideration and coordination of various verticals and integration of the risk assessment.
• A consolidated output that provides a complete report to the various stakeholders and improves the organization's ability to risk management.

Entrepreneurship involves taking huge risks, and small and medium enterprises are more vulnerable to such risks' adverse effects compared to the more prominent organizations.

The SMEs, among several risks such as insufficient capital, workforce, competition, etc., mainly face the contractual execution of the business operations.

It is time that the entrepreneurs realize that the investors look beyond a simple revenue estimation, i.e., sustainability.

Is contract management lifecycle a good choice for SMEs?

Contracts constitute an inherent part of any business that guides the entire cycle relevant to the product or service delivery. A well-managed arrangement facilitates a clear understanding between both parties and reduces any obstacle of confusion.

Contract Lifecycle Management (CLM) strategically tracks and manages contracts signed among their stakeholders. A contract management solution guarantees the best maintenance of the contract in terms of performance and legal compliance. Though the digital contract management cycle is not a one-stop solution for businesses, it is an essential part that renders several legal and financial benefits.

The digital contract management system is a technique to track a contract from end to end and manage it during its life cycle. A CLM tool confirms that both parties profit as intended at every step of the intelligent contract, starting from the proposal to execution, storage, update, and expiry/renewal.

A CLM software confirms that all fundamental aspects of a contract – mutual approval, legal validity, acceptance, sufficiency, consideration, and legality are maintained smoothly. The contract lifestyle management also ensures the key performance indicators such as - contract stages, risk score, time management, and execution.

How will digital contract management software help SMEs in risk management?

Since 2018, the CLM tools started gaining much popularity, but it started being a necessity after the COVID-19 pandemic, as the changed working environment demanded digital adaption.

The digital intelligent contracts helped manage the risk of disparity between the order and delivery, improving the delivery and cost-saving and reducing manual errors.

In a report, Goldman Sachs claims that a CLM process enjoys a reduction in operational process cost by 20% and the error in payments reduces by 80%.

There are more benefits of using CLM which are listed here: