Contract Management Best Practices: The Merits of a SaaS Management System versus Paper-Based Management System – A Case Study

Are you a contract manager for a medium-sized corporation? And is your contract management system still manual or paper-based? 

If so, it is worth considering moving onto a SaaS-based contract management software system to automate and simplify the contract management lifecycle.


By way of answering this question, let’s consider the following points:

What is SaaS-based software? describes Software-as-a-Service (SaaS) as a “software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted.”

It is also known as rent-ware or subscribe-ware; both terms are apt descriptions of the business model.

SaaS is also part of the cloud computing model where the software is hosting “in the cloud” and accessed from anywhere in the world by its subscribers or users. The direct access or entry point is via a web browser on a thin client.

The thin client-server model is a low-performance computer (the thin client) that has been optimized to access the software hosted on powerful servers via a web browser via a remote connection such as Microsoft Edge, Chrome, or Safari.

A brief history of the SaaS business model

This model’s foundations go back to the 1960s, where mainframe providers like IBM instituted a business application known as a service bureau business or time-sharing computing. In summary, this model offered database storage and mainframe computing power to large organizations that needed powerful and centralized computing resources such as banks and other financial institutions.

Fast forward to the 1990s where the popularization and expansion of the Internet resulted in a model known as the Application Service Providers (ASP). These centralized computing companies provided big business with specialized business software application hosting and management.

In summary, the SaaS model is actually just an extension of the ASP model.

The merits of a SaaS contract management system versus a paper-based system: A case study

One of the best ways to describe the SaaS contract management software’s benefits and merits is to consider the following scenario.

Let’s assume that you own a small service-based contractual company. Your business model is to provide outsourced cleaning and janitorial services to medium-sized higher education institutions such as community colleges.

When you take on a new client, a contract must be drawn up specifying the services offered, the contract’s length, the number of contract staff placed at the institution, and the monthly payment. It also needs to specify whether you will provide cleaning materials and items like toilet paper, and paper towels to dry hands in the bathrooms.

There are 4 essential points to note:

  • You pay your employees contracted out to each institution.
  • Each contract runs from January to December of each year.
  • Most contracts are rolled over without too much fuss and renegotiating of the contractual terms.
  • You retain a contracts lawyer to look through all of your contracts before they are finally signed by yourself and the client.

You’ve never considered signing up with a SaaS contract management system until now because you believe that the number of contracts you currently have are manageable using a paper-based system.

What if you were to think about a SaaS-based contract management system? Would it improve your business processes and workflows?

Let’s consider your business model within the contract management software model as an answer to these questions.

Centralized storage

Instead of printing out multiple copies of each contract and couriering (or emailing) them to your lawyer and your clients for comments, changes, and finally signing, an online system will manage the contract signing lifecycle on your behalf. You can use a predefined template to draw up the initial contract, store it on the SaaS contract management system in the cloud, and use the software’s email-based workflow processes to email all the signatories in the order that they need to review and sign the document.

For example, you draw up the contract, and you would like your lawyer to review the contract before sending it to the client. Therefore, the workflow route is yourself, your lawyer, back to yourself for revisions, back to your lawyer, and then the client. The software will monitor who accesses the contract and when. It will also send an email to the next person on the contract’s workflow route to alert them that they have actionable items on the list to complete.

Backup and security

Contracts form part of the definition of sensitive data. They contain your business details, including tax and business registration numbers, your client’s details, as well as your banking details. Therefore, these contracts must be securely backed up and stored behind the latest firewall and cybersecurity best practice applications.

One of the challenges with the COVID-19 pandemic is that there has been an increase in the number of hackers looking to break into systems and steal sensitive data. One of the cyberattacks of choice is the phishing email. Therefore, sending draft copies of each contract via email is not a secure option at all. There is always the chance that a hacker might get hold of these emails while in transit to the sender from the receiver.

Secondly, if copies of these contracts are stored on your laptop or desktop computer, there is a good chance that you might fall prey to a ransomware attack. It happened to some of the biggest US companies like Garmin. Therefore, it is about securing your data, not worrying about making mistakes, and opening emails that contain ransomware, for example.

A secure SaaS-based contract management system with regular backups and the latest cybersecurity measures implemented is preferable to sending contracts via email or storing them on your device. This business model never sends the contracts via email or text message. They stay on the server, and emails or messages are sent to authorized users.

Manage the contract renewal process

One of the real benefits of managing your contracts with application software is that you can set a contract’s date to be renewed on the system. When the contract is about to expire, the system will send an email alert to you to kick off the renewal process.

Final thoughts

These are just a few of the benefits of implementing a SaaS-based contract management system, no matter how small your business is. Time will demonstrate the full worth of the automated system over the paper-based system.

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