Google Drive Vs Contract Management System: How a Customised CLM Outweighs Cloud-Based Systems
While Google Drive offers convenience and affordability, it falls short in handling the complexities of contract lifecycle management. As organisations scale, so do their contract management challenges – making a capable CLM system not just beneficial but essential. But does ‘custom’ always mean ‘capable’? Read on to find out!
In today’s fast-paced digital landscape, contracts are the lifeblood of business success. Yet, a staggering 9 out of 10 businesses suffer revenue leakage due to poor contract management, losing an average of 9.2% of their annual revenue, according to a report by World Commerce & Contracting (WorldCC). These inefficiencies not only drain resources but also expose businesses to compliance risks and missed opportunities. While cloud-based tools like Google Drive have revolutionised how we store and share documents, they fall short when it comes to managing the complexities of contracts. Enter Contract Lifecycle Management systems (CLM) – specialised platforms designed to streamline every stage of the contract lifecycle, from creation and negotiation to compliance and renewal. Companies that adopt CLM solutions see a 35% reduction in contract cycle times and a 25% improvement in compliance rates, as reported by Aberdeen Group. Moreover, Deloitte estimates that businesses using advanced CLM tools achieve up to 30% cost savings in operational expenses.
But with technology developing at the rate it is, all CLM platforms have no choice but to evolve. The need of the hour is ‘Customisation’; and a Custom Contract Lifecycle Management system is the latest phase in the evolution. This article explores how a customised, tailored CLM system outperforms cloud-based solutions like Google Drive in managing contracts efficiently, and securely. While Google Drive remains a convenient and cost-effective tool for smaller businesses handling a limited number of contracts, it lacks the specialised capabilities needed for comprehensive contract lifecycle management. As organisations expand, their contract management needs grow in complexity, making a capable CLM system that addresses specific demands of the organisation, essential for maintaining compliance, optimising workflows, and reducing risks. While it acknowledges that Google Drive can still serve as a stepping stone for those at an earlier stage of growth, as you read on, this article will have you convinced that investing in a custom CLM is a strategic move for your business, if you are looking to stay ahead. So, let’s get started!
What Does Google Drive Do?
Google Drive is one of the most widely used cloud-based storage platforms that allow users to store, share, and collaborate on documents, spreadsheets, presentations, and more. It integrates with Google Workspace tools like Google Docs, Sheets, and Slides, making it a go-to solution for everyday file management. Users can organise files into folders, set sharing permissions, and access documents from any device with an internet connection. Other providers online too provide similar solutions, but like all things online, Google Drive seems to be at the forefront of that particular market.
While Google Drive excels at basic document storage and collaboration, it is not designed to handle the intricate demands of contract management. For instance, version control can become chaotic when multiple stakeholders edit documents simultaneously. Who among us hasn’t been victim to the complex battleship-like strategies we need to come up with when editing excel sheets simultaneously? Additionally, Google Drive lacks specialised features for tracking contract milestones. So, critical deadlines can easily be overlooked without automated reminders. But where it falls short the most, is when it comes down to managing approvals, or ensuring compliance with legal and regulatory requirements. With things up in the cloud, security is all but a digital coin toss – at the whim of hackers who can easily access an entire drive with just one shared link!
What Is Custom Contract Lifecycle Management?
In contrast, a custom Contract Lifecycle Management System (CLM) is a purpose-built software solution designed to automate and optimise the entire contract lifecycle—from creation and negotiation to execution, compliance, and renewal. Unlike generic storage tools, custom CLM platforms offer a suite of advanced features tailored to the unique needs of contract management. They include:
- Automated Workflows: Custom CLM platforms streamline contract processes with predefined templates and approval chains, reducing manual intervention and ensuring consistency. Automated workflows route documents to the appropriate stakeholders, track progress, and eliminate bottlenecks, saving time and improving efficiency.
- AI-Powered Analytics: A CLM leverages artificial intelligence to extract key terms, deadlines, and obligations from contracts. It provides actionable insights, such as identifying risks, tracking performance metrics, and flagging compliance issues, enabling data-driven decision-making.
- Audit Trails: CLM platforms maintain detailed records of every change, comment, and action taken on a contract. This ensures transparency, supports compliance, and provides a verifiable history for audits or dispute resolution.
- Custom Alerts: CLMs send automated notifications for critical events like contract renewals, breaches, or unmet obligations. These alerts ensure stakeholders stay informed and deadlines are never missed, reducing risks and improving accountability.
- But the best part: with a custom CLM platform, you get to pick and choose exactly what you need – a crucial benefit that is sadly missed out in the other off-the-shelf CLM solutions that seem like a better option. Loopholes, costs, and inconveniences are aplenty in those options, but that is a topic best tackled in a separate article.
Difference Between Google Drive and CLM: One Stores, While the Other Transforms
For those who say that their Google Drive is as efficient as a custom-built CLM system, we say that comparing the two is like comparing apples to oranges. Here’s why:
| Feature | Google Drive | Custom CLM |
|---|---|---|
| Storage | Stores documents in a centralised cloud-based location. | Stores contracts securely with advanced encryption and access controls. |
| Collaboration | Allows real-time editing and sharing with multiple users. | Enables role-based collaboration with controlled access to sensitive clauses and data. |
| Workflow Automation | Lacks structured workflows; manual processes for approvals and reviews. | Automates workflows with predefined templates, approval chains, and task assignments. |
| Searchability | Relies on file names or keywords for search, making it hard to find specific clauses. | Uses metadata tagging and AI-powered search to instantly locate clauses or terms. |
| Security | Offers basic encryption and sharing permissions. | Provides enterprise-grade security, including encryption, multi-factor authentication, and granular access controls. |
| Compliance | No built-in compliance monitoring or risk assessment. | Automates compliance checks, identifies risks, and ensures adherence to regulations. |
| Deadline Tracking | Manual tracking of deadlines, increasing the risk of missed dates. | Automatically tracks and alerts stakeholders about key deadlines and obligations. |
| Analytics | No built-in analytics; requires manual analysis for insights. | Uses AI-powered analytics to extract key terms, track performance, and identify trends. |
| Integration | Requires third-party tools for integration with CRM, ERP, or e-signature platforms. | Seamlessly integrates with business tools like CRM, ERP, and e-signature platforms. |
| Scalability | Suitable for small-scale document storage and sharing. | Designed to handle high volumes of contracts with ease, including bulk edits and automation. |
| Cost Efficiency | Low upfront cost but may incur hidden costs due to inefficiencies over time. | Higher upfront cost but delivers long-term savings through automation and risk mitigation. |
Why a Customised CLM Is a Better Choice for Managing Contracts
While Google Drive is a practical solution for small businesses with limited contracts, a customised Contract Lifecycle Management System (CLM) becomes essential as organisations grow and their contract management needs become more complex. Here’s a quick sample of what you get when you go the custom route and how mid-sized to large companies can benefit from it:
1. Enhanced Security
Google Drive offers basic security, but a CLM provides enterprise-grade protection, including encryption, multi-factor authentication, and granular access controls, ensuring sensitive contract data remains secure. Insert AI and Biometric tech in the mix, and you have a system as comparable to Fort Knox!
2. Proactive Compliance
A custom CLM actively monitors contracts for compliance risks, flagging issues like non-compliant clauses or missed deadlines. Google Drive lacks this capability, leaving businesses vulnerable to penalties.
3. Intelligent Analytics
A custom CLM comes with the option to use AI to extract key terms, track performance, and identify trends, providing actionable insights. Google Drive on the other hand, requires manual analysis, which is time-consuming and less accurate.
4. Seamless Integration
A custom CLM can just as easily be integrated with CRM, ERP, and e-signature tools of your choice to create a unified ecosystem. Google Drive often is limited in this regard, introducing friction and inefficiencies.
5. Scalability
A custom CLM grows with your company, effortlessly handling high volumes of contracts as needed. This singular feature makes it ideal for growing businesses who seek prosperous futures.
Conclusion
Google Drive serves as a seemingly versatile tool for casual document sharing, but contracts demand more than just safe storage, they require orchestration. Customised Contract Management Systems empower businesses to handle agreements with agility, foresight, and ironclad security. In a landscape where contracts define relationships and revenue, settling for generic tools risks inefficiency, vulnerability, and stagnation. Softwares like those created by BIGFORMULA exemplify how tailored solutions turn contractual complexity into competitive advantage. For organisations serious about scaling intelligently, investing in a CLM isn’t just logical; it’s imperative.
Curious to see how you can upgrade your contract management? Discuss your needs and goals with BIGFORMULA.
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