What’s Going Wrong With Obligations Management and How To Do It Better

Over the decades, the evolution of corporate health and safety has been matched by dramatic regulatory change. As the importance of safe working practices has gained in profile, the laws by which they are governed have also developed at pace.

Organizations are required to adhere to specific, and increasingly stringent directives. This should be welcomed for raising the standards and protections afforded to workers and the public. However, for businesses, it can pose a significant challenge.

Companies juggling multiple contracts across different jurisdictions find themselves in the situation of having to adhere to many different regulations. The requirements of these are liable to change at any time. It can feel virtually impossible to keep up. However, when the legal viability of a company relies on effective management and adherence to these regulations, non-compliance is not an option.

What is obligations management and why should companies pay it more attention?

Obligations management is the practice of managing the contractual and legal responsibilities of a company or organization.

At the heart of this is the issue of compliance or adhering to the regulations. However, it is much more than just a box-ticking exercise. Poor contractual management can have massive implications for workers and the company as a whole. World Commerce and Contracting (WCC) has found that companies lose on average 9% of their annual revenue from poor contract management. And it doesn’t stop there:

• Legal implications – if a company fails to adhere to the required regulations or standards, it could face severe penalties.

• Worker safety – companies that do not keep up to date with required standards risk the health of their workforce and the wider public. The regulations are there for a reason and disregarding them puts everyone at risk.

• Potential breach of contract – if the necessary requirements are not fulfilled, the company is in danger of breaching the terms of their service and risks a termination of the contract.

• Damaged reputation – a company that fails to fulfill its obligations or adhere to the correct regulations attracts the kind of negative publicity that can send it under.

• Loss of trust – existing clients may choose to not work with companies they see as unreliable or negligent.

• Potential litigation – companies that break their obligations or prove negligent may be exposed to serious litigation costs.

Why is obligations management so difficult?

When companies are juggling different contractual obligations and multiple different regulatory requirements, there is a lot to keep track of. Just performing the role of compliance becomes increasingly difficult.

Each minor change to a regulation or a contract highlights the following main 3 challenges for businesses:

• Lack of control – when details of contracts or regulations are buried deep within files or on disparate spreadsheets, it's a challenge to find the right piece of information when you need it. Without instant access to the details or oversight across the range of contracts, you lack a holistic view. Details can easily be forgotten or overlooked, and you risk failing to adhere to your obligations.

• Manual workload – when regulatory compliance relies solely on human activity, the workload is intense. The process of updating details within contracts or practices within an organization is time-consuming and inefficient. Deadlines can easily get missed.

• Lack of task transparency – often within companies there is a team that completes the contract in addition to the team who carries out the work. It can be hard to allot direct responsibility for individual activities quickly and efficiently. Confusion can occur as to who is taking responsibility for different activities. Sometimes key details are overlooked as people assume others have completed them.

How obligations management software can help

The challenge of managing multiple requirements across contracts and adhering to every changing regulation can feel impossible. Keeping track of every detail of every contractual obligation all of the time, even as these details are changing, puts an intense burden on those responsible. If it is all done manually, it is hugely time-consuming and inefficient.

This is where the right software can help. Bringing all the contract information into one place, it can help you access details quickly, monitor contracts transparently and assign responsibilities to the right people. Giving a 360 view of all contractual obligations, it makes compliance so much easier and altogether more streamlined.

What features to look for in obligations management software

The right software is designed to make your job easier not more difficult. Therefore, it should be intuitive, easy to use and allow you to do what you need to as quickly and efficiently as possible.

It is worth looking out for the following features:

• Dashboard – that is user-friendly and helps you access the right services fast.

• Centralized contract storage – that you can navigate easily to help you find the right detail in the relevant contract quickly.

• Automatic regulatory updates – the best software links to systems that automatically update as regulations change. This means your systems are always fully compliant and the right alert will flag 100% of the time.

• Automated reminder feature – to allow you to customize reminders for when certain actions are due.

• Automated task notification – to allow tasks to be assigned and the appropriate personnel to be notified of impending tasks so due dates are not missed.

How will it help you?

Comprehensive obligations management software will help you streamline all your ESG activities. You will easily be able to navigate multiple contracts and regulatory requirements without the need to wade through paper files or endless spreadsheets. Instead, all the details will be at your fingertips at just the click of a button, giving you:

• Control – for a tighter handle on all the details of every contract in real-time, even as details or regulations change.

• Confidence – knowing that you will always be contacted by automatic alerts when action is needed.

• Time – reducing the labor-intensive process of trawling through files on a regular basis to make sure you are fully compliant all of the time.

• Peace of mind – as your job is made easier and more efficient, knowing that compliance is built into all of your systems all of the time.

The right obligations management software helps you keep track of every important detail and stay on top of requirements all of the time. Taking out a lot of the manual legwork, it makes your job easier and streamlines all the minor details taking the headache out of compliance management.

To find out how Evotix can help transform your system for obligations management, click here.