Contract Management Software: Buy or Build - Which is Best

Contracts are the make or break for the success of many businesses. One tiny error could lead to massive financial losses and compliance issues. This is why most organizations now rely on contract management software. 

These programs automate the contract management process, increasing accuracy and compliance while shortening approval times.

The one question many struggle with is whether to buy or build contract management software (CMS) tailored just for their business. This article sheds more light on CMS and highlights the pros and cons of each option.

Understanding Contract Management Software

We’ll start with the basics: contract management is the process of designing, administering, and managing legally binding agreements from start to finish. 

A contract's life cycle involves several key stages: preparation, negotiation, routing, signatures, approval, and termination. The main object of managing is to ensure that everyone involved adheres to the stipulated terms while mitigating potential risks. 

Now, contract management software simplifies this process by automating the mentioned activities. 

It has features that allow it to trigger specific actions in each stage. This means it automatically routes the document to the next party after each phase. This not only streamlines its lifecycle but also ensures that companies remain compliant. 

Furthermore, most contract management software also offers a central location for keeping all the essential documents. This increases transparency and visibility between parties while facilitating better control of the process. 

Build vs. Buy: The Key Considerations

Deciding between contract management buy and build is not as cut and dry as it seems. Companies have to consider several factors to ensure they make the right choice. These aspects include:

Cost

Your company’s budget is one of the most crucial factors to consider when making this decision. Here’s the deal: purchasing contract management software will be cheaper upfront. However, you will likely incur recurring costs in the form of subscriptions and upgrades.

Conversely, developing your own software from scratch requires a hefty investment right off the bat. But in the long run, it saves you money as you won’t incur recurring expenses. As such, figure out the total cost of ownership so you can make an informed decision. 

Customization

To make the right choice, it’s also important to consider the level of customization you’re looking for. 

Are you looking for a solution that will solve the specific needs of your business? Or, would you be okay with an off-the-shelf option that works for every other business? If it’s the former, you’re better off building the software. But if it’s the latter, then you can buy the contract management software.

Implementation Time

Yet another point you should take into account is the implementation time. Building and integrating the custom software management will likely take longer, and understandably so.

For one, you want a solution that addresses a very specific need. Second, you’ll want the CMS to be flawless as it’s designed in-house. Third, you’ll need to test the program to ensure its compatibility with existing IT infrastructure. All these factors combined lead to a longer implementation period. 

Conversely, implementing an off-the-shelf contract management software is likely to take a shorter time. That’s because the vendor has already worked out potential hurdles, which means you can hit the ground running. 

Scalability

Another way to narrow down your options is to consider your company's growth rate. If your business is expanding quickly, customized software is the best alternative. You can easily alter its features to accommodate your organization’s growing needs. 

However, if your business has more stable, obvious needs, off-the-shelf contract management software will suffice. 

Support

Considering the post-launch support can also help you make a more informed decision. Choosing the build option ensures that you can always address potential issues as soon as they arise. 

On the other hand, buying the CMS from a third party means you have to rely on external support. This exposes your company to unnecessary downtime in cases where the support team isn’t available to address issues. 

Security

Don’t forget to consider the security concerns that stem from each solution. By choosing the buy option, you’ll be forced to entrust and store delicate contract details to an external platform. Conversely, building the software minimizes security risks. Since the software is designed in-house, you can control its access and usage better. 

When Building Your Own CMS Might Be the Right Choice

Designing your own contract management software is no mean feat. However, it’s the best option when you’re looking for:

A Customized Software

For businesses looking to address specific contract needs or issues, custom software tailored for the organization is the best. Such a program is built with specific features to accomplish the desired objectives.

A Flexible Solution

Building your own contract management system also makes sense for individuals who expect their businesses to grow rapidly. Since the software will be personalized to the business, it can easily be adjusted to support your firm’s growing needs. 

Long-Term Cost Savings

Building custom contract management software does not come cheap. It requires advanced infrastructure and a skilled team of IT developers. And if you have to outsource the building project, it becomes an even more expensive affair. 

However, the savings you’ll enjoy in the long run are much more than this initial investment. Once it’s up and running, you won’t have to worry about paying recurrent license fees, subscriptions, or upgrade charges. 

Maximum Control

Designing your own contract management system grants you unlimited control over the end product. You can use it as you see fit, scale it up or down, and more. Essentially, you’re not limited by the software’s current configuration. You can always modify it as you’d like. 

More importantly, building the CMS gives you exclusive control over security and compliance. This eliminates the risks that might arise from entrusting the software to third-party vendors. 

When Buying a CMS is Often the Better Option

Although building a CMS offers several benefits, there are a few instances where buying is a better option. These include:

You Are on a Time Crunch

If you are on a time-crunch, buying the contract management software is your best bet. The off-the-shelf programs come with pre-built features, enabling you to use them right away. Besides, the vendor will help with the implementation process, saving you more time. 

By comparison, building the contract management system from the ground up can take several weeks or months. You need to first identify your business needs. 

Next, figure out the infrastructure required to develop the software. And even after the software is designed, you’ll have to test it several times to ensure optimal performance. All these stages take a lot of time. 

You Lack Development Expertise

If you don’t have much experience using or developing software from scratch, starting with an off-the-shelf solution makes more sense. This not only offers a lower upfront cost but it also doesn’t require any expertise on your part. Once you the hang of it, or your business needs change, you can switch to a custom solution. 

You Prefer a Hands-off Approach

One benefit of purchasing an off-the-shelf solution is that it lets you transfer maintenance obligations to the vendor. This eases the burden of updating, fixing bugs, and other post-launch duties. 

So, buying might be your only option if your development team is too busy to design or handle the ongoing CMS maintenance. 

Choosing the Right CMS Development Team

Contract management software development is a massive undertaking. For this reason, you’ll want to entrust the project to a development team with ample experience and expertise. Here’s a list of factors to look for when picking your contract management system development team:

• Technical Expertise - The company should showcase its proven track record in developing similar custom software. So, check its previous projects to gauge the length of its experience.
• Communication - It’s also good to check whether the development team has stellar communication skills. After all, communication is the foundation of every successful project. Ideally, the team should provide regular updates on the project's progress and be transparent in relaying challenges and modifications.
• Industry Experience - when assessing the team’s expertise, check whether it’s handled projects in your niche or industry. This helps to guarantee a faster delivery with minimal errors.  
• Quality Assurance - Don’t forget to examine the team’s quality assurance policy. Do they test the software thoroughly before delivering it to the client? Which technologies do they use to maximize quality assurance? What’s their reputation like regarding the quality of their deliverables?
• Post-launch Support - The right CMS development team offers consistent support post-launch. As such, you should check whether they maintain long-term relationships with their clients. Determine their willingness to fix bugs, offer updates, and continue maintenance after the software’s release. 
• Security Standards - Lastly, remember to check the team’s security protocols. Ideally, they should have safety measures that safeguard the security and usage of your software and subsequent data.  

Also Read: A Complete Guide to Building Custom Order Management Software

Partner with Imaginovation for Your Contract Management Software Needs

After weighing the pros and cons of each option, it’s clear that building custom contract management software is the better choice. Collaborating with an expert software development company like Imaginovation guarantees that you’ll get your desired results. 

Our team excels in process analysis and optimization. They will develop an innovative and intuitive contract management system. This program will streamline your contract management processes, resulting in a seamless workflow. 

Furthermore, the Imaginovation team is committed to offering secure and scalable solutions. Therefore, you can rest easy knowing that the contract information is secure and the software will grow with your company’s needs. 

Are you ready to transform your organization with a cutting-edge contract management system? If so, feel free to contact us.

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