How digitalized contract management for a railroad’s legal department is a win-win for the organization
Legal teams in the rail transportation sector have long been the custodians of the contract.
From storing contracts and making them accessible to others in the organization, to managing all stages of the contract management process—from authoring to signing and managing compliance considerations with regulatory bodies—the legal team stands to gain the most leverage from digitalized contract management.
That being said, the information contained within a contract is not exclusively significant for legal teams. Contracts usually contain payment terms, contract obligations, compliance regulations, contract risks, liabilities, and other commercial terms as well. Procurement, executive, sales and marketing, and real estate or leasing teams can equally benefit from the digitalization of contract management.
How legal teams are specifically burdened by outdated contract management methods
Legal teams are at the forefront of contract management. Naturally, they are presented with the difficulty of manifesting governance, best practices, and command over contract lifecycle management (CLM). Legal teams explicitly face the following challenges:
- Outdated methods of managing and storing contracts—like SharePoint sites or a content management system—makes retrieval of contracts difficult, and leads to contract mismanagement. This can pose legal liabilities for railroad enterprises.
- Legal teams govern the contract language, but frequent inconsistencies in the terminology and lack of standardization impacts the organization as a whole. Every department requires a different set of contract clauses and libraries.
- Lack of automated workflows for managing the contract process slows down the entire time-to-value process, considerably decelerating departments across the organization.
- Need for third-party contract risk assessment and review causes major trouble to legal teams. With paper-based contracts or agreements stored in network folders, there is no visibility and opportunity for assessment of contract risks and anomalies. This can be effectively tackled through AI-enabled contract reviews that proactively highlight contract risks and irregularities.
Challenges encountered by departments utilizing traditional contract management processes
A railroad that acquires hundreds of contracts in a month cannot rely on manual contract management. A delayed turn-around time and lengthy process of obtaining signatures from required individuals has long been a major pain point for organizations. This method creates a siloed approach to contract management, and contract language lacks standardization across departments, locations, and business functions. This approach leads to:
- Little-to-no visibility into legal clauses and contract terms
- Non-compliance with regulatory bodies such as the FTA, FRA, and Railinc
- Delay in responses to new regulatory requirements
- Non-standardized CLM processes
- Lack of contract performance analysis and analytics-driven insights
The executive team relies on the legal team to manage the post-execution obligations and rights according to the contract terms. Similarly, for the supplier data, the procurement department is dependent on their colleagues in the legal department.
As a result, digitalization of contract management for legal departments can empower multiple other departments of the enterprise as well. Plus, a streamlined contract management workflow is essential to minimize risks and compete at the business level.
Digital rail contract management software: An integrated solution
The global and U.S CMS markets are predicted to expand at a CAGR of 18.70% and a CAGR of nearly 10%, respectively, by 2025. More and more companies are realizing the potential to turn contracts into assets so that they can mitigate risk, more agilely respond to external changes, and manage growing volumes of contracts.
With cloud-based contract management software (CMS), teams across the enterprise get equipped with crucial technologies such as electronic signatures for quick contract approval, a centralized contract repository in the cloud for enterprise-wide visibility, AI-powered contract reviews that accelerate time-to-value in contract execution, and pre-approved contract templates that are standardized for customer agreements, vendor agreements, and more in order to enable rapid contract authoring.
Another outcome is customized, pre-approved, rail-specific clause libraries that can be used to customize your contracts, which protect your business from lawsuits or hits to profitability.
While legal teams are, more often than not, tasked with managing the enterprise’s contracts, divisions across the organization can benefit and reduce the challenges of the contract process by employing competent contract management software.
Let’s take a look at how a contract management software (CMS) helps key railroad organizational departments:
- Legal standpoint: From a compliance standpoint, a CMS empowers legal staff to manage compliance with regulations and regulatory bodies like the FRA, FTA, and Railinc. In addition, streamlined, end-to-end contracting and risk mitigation is offered by an intelligent CMS platform. Employ ready-to-use, imported templates and clause libraries, along with customized workflows, to achieve CLM process standardization and accelerate the contracting process.
- Sales and marketing division: The sales department gets equipped with contract performance and contract risk mitigation metrics for each contract. Up to 89% of operational cost-cutting and 69% better risk management can be achieved with the help of CMS. Visibility into changing market dynamics such as price changes—along with insights into contract performance during negotiations or post-contract signing—can be acquired.
- Procurement standpoint: A rail CMS helps procurement teams gain insights on contract risks and procurement metrics like expiries, due dates, renewals, and more. Monitoring the efficiency and speed of the supplier contract process can be effectively achieved. Procurement can also draw insights from third-party data and support supplier checks for interline settlements and key references.
- Executive teams: The executive and finance teams’ objective is to maintain the overall company operations and ensure profits. To support this, a CMS enables them to visualize contract efficiency and accuracy to cut labor costs. It also provides access to contract risks for intelligent decision-making. Besides, analytics-driven decisions help discern ways to maximize revenue and avoid revenue loss.
One major benefit of digital contract management solutions is that you can expect seamless integration of your internal infrastructure with the solution. This enables legal teams to achieve a highly comprehensive and cohesive view of contract performance, and, thus, effectively manage contracts across the organization.
How does CloudMoyo come into the picture?
Years of experience collaborating with railroads, to modernize critical applications and leverage cloud, analytics, and AI technologies has intersected with our domain expertise as a CLM implementation partner of Icertis, cumulating in a powerful, rail-customized platform: CloudMoyo Rail Contract Management (CRCM).
The leading contract management platform built for and used by today’s innovative railroads, CRCM is part of a global CMS market that is predicted to reach a valuation of $3.30 billion by 2025.
An intuitive, cloud-based contract management platform, CRCM is built exclusively for railroads and transportation companies to enhance their contractual relationships. The solution gives railroads the ability to digitalize contracts and speed up the contracting process across all key parts of the business: procurement, real estate, legal, sales and marketing, leasing and real estate, and finance.
CRCM’s AI-enabled and automation capabilities allow our customers to improve their quote-to-contract speed and contract agility through intelligent analytics-driven decision-making. Packed with tailor-made pertinent functionalities and apps, CRCM offers you:
- Centralized contract repository in the cloud and seamless integration into your organizational infrastructure
- Standardized procurement with labor unions and regulatory bodies (FTA, FRA, and Railinc)
- Enhanced profitability through effective workflow management and deep visibility into processes like proposals, onboarding of vendors, negotiations, and collaborations.
- Diminished procurement risks with an AI framework and decision analytics
- Accelerated authoring for contracting processes with pre-configured clause libraries, e-signatures, customizable approval workflows, renewal alerts, and configurable proposal templates
- Quick extraction and analysis of contract terms, obligations, renewal terms, expiries, incentives, pricing, payment terms, and more
CRCM is here to help you redefine regulatory compliance, negotiation time, sign-off cycle time, risk mitigation approach, and enhance the overall operational productivity for your railroads. CloudMoyo’s comprehensive and customizable solution will help you lead the disruptive remodeling of your bottom line.
Get in touch with us today to witness transformation first-hand with CloudMoyo’s customized rail contract management solution, built exclusively for railroads.