Digital transformation has changed the way companies manage their contracts. Today, companies are relying on contract management automation to improve their performance.
Your Smart Personal Assistant eliminates repetitive tasks from your daily routine to free up your time for more in-depth subjects.
Manage your negotiations more efficiently and reduce the number of internal back-and-forths without effort.
Measure the performance of the legal department and provide evidence of the positive impact on the business to your management.
Contract management automation refers to the optimization of the creation, negotiation, execution and storage of contracts through digital tools. In other words, contract management automation relies on technological solutions to foster collaboration (between parties, but also between internal teams) and make each step of the contractual life cycle more fluid. It is opposed to a more traditional and manual management of contracts.
Contracts are at the heart of a company's life. They define and frame all of its projects, and in this respect, contribute directly to its growth. Contract management is therefore a key issue.
According to a study conducted by the International Association for Contract and Commercial Management (IACCM), poor contract management can reduce a company's annual revenue by 10%.
Today, many companies still use manual and non-optimized management of their contracts.
This leads to many frictions, among which we can mention:
· A multiplication of low value-added tasks, for legal teams, but also for commercial and financial teams.
· A slowdown in the negotiation phases, with numerous round-trips between the parties, duplication of work materials and versions... According to a DocuSign report, 33% of employees estimate that the process to negotiate a traditional contract (without legal complexity) takes more than 30 hours.
· Difficulties in controlling all contractual risks.
· Unsolicited contract renewals.
· Smoother, more efficient negotiations. According to a study conducted by Goldman Sachs, Contract Management Automation could speed up the negotiation phase by 50%. *
· Lower costs. According to the same study, Contract Management Automation would reduce processing costs by 30%. *
· Better control of contractual risks.
· Better internal collaboration.
Automating a company's contracts is relatively simple. You just need to put the right tools in place.
Here are the most commonly used solutions in a Contract Management Automation strategy.
With this tool, each new contract is generated from a catalog of proven models that comply with regulatory requirements. Of course, these models are not fixed and can be adapted to the specific situation.
There are three major benefits:
1) The contract creation phase is faster. Legal teams are relieved of time-consuming and repetitive tasks.
2) Contractual risks are better controlled. Each model has been validated beforehand and includes all the necessary clauses to comply with legislation.
3) Operational teams have more autonomy and can finally launch contractual projects.
This function allows you to automatically fill in certain data related to the contract, such as the date or the identity of the contractors.This is a real time saver and limits errors related to manual data entry.
The collaboration phase often requires numerous email exchanges. On this occasion, several versions of the contract can be created and in the end it becomes difficult to know which modifications have been made. The risk is that each party works on a different version.A better alternative is to use a collaborative text editor. Thus, everyone works on the same document. There is no more risk of confusion. Everyone can see what changes were made, when and by whom.
Internal approval procedures may delay the signing of the contract. Take the time to solicit the appropriate person, forward the documents and wait for their return. To speed up the process, it is recommended to use a function to automate the validation of the contract internally. With one click, the person concerned is informed and can easily access the document.
The electronic signature considerably simplifies the contract validation phase. With this process, signing a contract takes no more than a few minutes. This method is also very secure, because it guarantees the integrity of the document and the identity of the signatory. It has the same legal value as a handwritten signature since the law of March 13, 2000.
Automatic alerts allow you to inform of the upcoming expiration of a contract. It is a very good tool to avoid tacit renewals of a contract whose purpose is no longer relevant.
Slack, Hubspot, the Google suite, Notion, Typeform... Employees use many tools on a daily basis to organize their work and gain efficiency. It is therefore important that the technologies implemented to automate its contracts are integrated with these applications. These connections optimize the workflow of all teams.
A new contract has just been signed on your Contract Management solution?The new customer is automatically created on Stripe. The finance team does not need to manually fill in the information.
An employee fills out a form on Typeform or Google Form?An HR contract will automatically be created in your contract software. All the information mentioned in the form will be automatically integrated into the contracts. This is a real time saver for HR teams.
Did the sales team close a deal via their CRM software (Hubspot, Salesforce...)? A contract will be automatically created on your contract management tool.
On the other hand, a new contract has just been signed on your Contract Management solution?
The CRM software automatically updates the status of the prospect.
And that's not all. These examples are just a small sample of what is possible. The integration possibilities are numerous. A good contract management solution should be connected to all your favorite tools.
Source : https://cmsd.nl/wp-content/uploads/2015/10/memba_pwc_contractmgmt.pdf