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Contracts are an important aspect of any business. But without a plan in place, the contract management process can become overwhelming and full of risky manual errors.
Contract management is the process of overseeing contracts entered into with vendors, partners, customers, and/or employees to ensure the compliance, accuracy, and validity of commercial agreements. This process is risky and error-prone, and training employees to handle contract administration is complex and expensive.
Smart contract solutions for efficient contract management are changing the face of contracts and agreements, and many companies are adopting it as part of their digital transformation. In order to understand the full benefits of automation that smart contracts bring, it’s important to consider the part the blockchain plays in the different stages of a contract management lifecycle.
Blockchain smart contracts provide a solution by formalizing relationships between people and institutions and the assets they own over the Internet. They do it by establishing a Peer to Peer (P2P) system that doesn’t require trusted intermediaries. While digital contracts are not new, the use of blockchain acts as the catalyst for smart contract implementation.
Blockchain is a decentralized ledger that follows the principles of a peer-to-peer network. It augments business processes by providing transparency, security, and immutability. All these features can effectively improve various business processes, empowering contract management solutions as well.
A smart contract enables network automation and turns paper contracts into robust, immutable, transparent, and efficient digital contracts. We can refer to smart contracts as legal codes that carry the similar legality of a paper contract. For instance, at Trakti, our smart contract solutions for efficient contract management can enable smart contract solutions that bring parties into play. When both parties agree to the terms of the contract, it is executed, making everything official. As smart contracts are computer codes, they can automate various contract-based processes.
Businesses can use blockchain smart contracts for a verifiable and accurate representation of transactions executed on the network. There is no need for contracts to rely on mediators for their execution with blockchain-powered contract management solutions. They can enable information among the parties regarding the contract, which can be related to a transaction or any part of the contract.
Smart contracts for CMS can make it more efficient and cost-saving. Blockchain smart contracts can enable automation to save both time and cost related to contract management.
Significantly, the use of smart contract solutions for efficient contract management solutions can enable various opportunities as well as optimize the existing ones. The integration of smart contracts with traditional CMS has the potential to improve the domain drastically.
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