To remain competitive, companies need to consistently upgrade their software and be updated on new and emerging technological trends. Since every big break in business starts with a contract, it is therefore important to state that digital transformation must start from contract management.
What are the benefits of digital transformation on contract management?
Strategizing and planning the contract lifecycle
If a business process starts from a good footing, there are high chances that the process will end profitably. However, if there are errors, oversights and loopholes tolerating mismanagement, then, things can rapidly spiral out of control leading to serious challenges and massive losses to the organization.
Since every business engagement begins with a contract agreement, then in that case, digitization should start from the first stage of contract development. With the aid of a contract management software, organizations should integrate technology to improve on contract processes. In the current business environment, adapting to modern technology has a huge impact on company’s performance. To increase productivity while minimizing cost, companies must leverage some form of automation in their contract agreement procedures.
Giving contract management the importance, it deserves, that is, by including automation from the initial stages, will benefit your company and grow it faster than you can imagine.
The moment you grasp how important contract management is to your company’s success, you will prioritize it and give it first place in your digital transformation strategy.
Improvement in contract negotiations
For a contract to be successful, both parties must come to a workable agreement that benefits both sides. Sometimes, for this to happen, there has to be several discussion sessions with input from each party representing their interests. Unfortunately, every round of negotiations requires effort and time to compare contract versions to ensure that editing of agreed terms is done to everyone’s satisfaction
Also, the legal teams should conclusively review key edits and changes on the documents, and confirm that reviewing and approvals are done and that the document is ready for another round of negotiations. It is only after each team has conclusively read the document and confirm that all changes discussed reflect on the draft, that the process can progress to the next stage. Integrating technology drastically minimizes the amount of time spend on negotiations.
Automation eases the process of comparisons enabling you to easily notice any edits done on a contract, and focus attention to the edited sections. Also, the each stakeholder can access the draft and see edits made by their counterparts from a central repository. Once a version is returned to the counterparty, the system concurrently alerts lawyers, executives and other users to review and make approvals or it sends the document in a prescribed order.
Automating contract management processes also helps while renewing agreements with vendors and clients. Furthermore, contract systems offer analytical insights helpful in determining contract expenditure and revenue, giving a clear outlook of the contract’s performance. It also determines whether to renew or renegotiate contract terms.
If you are using manual systems that allow for soft copies of signed agreements, you will struggle to notice trends, track contracts and access vital documentation during emergencies.
Better compliance with digital contract management
The only way an agreement is successful is when each party fulfills their end of the bargain. Both clients and vendors should show commitment otherwise you will miss out on payments and services.
Digital transformation helps each party to remember milestones since they will receive notifications and alerts on upcoming activities and approaching dates. By automating contract management as an initial digital transformation step, will be beneficial in highlighting milestones. Obligations in a contract will be show due dates and the individuals responsible for specific tasks and duties.
Also, obligations that are approaching and their dates will appear in auto-generated reports. There are notifications that show contract status, responsibilities and deadlines. Risky obligations can generate auto-alerts before due date or send notices to relevant individuals.
Digital contract management guarantees efficiency
To minimize error and human oversight, it is helpful to integrate a contract management software that will send out notifications and reminders for any task that teams may forget. With a dedicated centralized repository, it becomes easier to locate vital information, get the appropriate edited contract versions and confirm the legal terms in use are appropriate.
A contract management system allows you to automate tasks giving you time to focus on more productive duties. The legal department can review complex contract agreements conveniently ensuring the company does not run into any unforeseen risks.
With workflow automation, teams can easily track contract in each step right from the initial phase up to the execution stage.
Digitization of contract management systems is here with us. If you still rely on manual processes, you could be losing out on business opportunities. If you are skeptical and have no faith in the software, why not experiment with the numerous free trials offered by the software companies. By so doing, you will get a feel of how the process will impact your business.