As technological advancements continue to improve our lives, current business practices are being quickly superseded. To demonstrate just how valuable the right contract lifecycle management (CLM) software can be for your business, let’s take a step back to review the history of the contract management process, take stock of how far we have come thanks to eSignatures, then take a look ahead to glimpse the bright future of contract management.
In the beginning
For decades, contracts were inked, marked up and signed using analog methods. This was expensive, slow and inefficient. However, at each turn, the process became more and more digitized. Computers replaced typewriters, and contracts were emailed, faxed, or scanned.
Then came eSignature, a technology that took one of the process’ biggest time wasters and reduced it to a few seconds of work. Before, waiting for the execution of sales or procurement contracts from customers could take days, if not weeks; to get a pen-and-ink signature, you had to locate signatories, and either be physically present or put things in the mail. Delays impacted companies where it mattered most, impeding overall business agility, revenue flows, and growth.
Now, the simple act of adding an electronic signature to your agreements can save your organization an average of $36 per document by saving time and cutting the hard cost of printing, scanning, faxing, and shipping. These are easy changes to get used to—and they make it impossible to go back.
The beginning of the end (of productivity loss)
When paper ruled the business world, time (and trees) dwindled. With the onset of digitization, organizations began to realize the productivity that could be gained. Little by little, contract management took on new dimensions—and business leaders were paying attention.
The first major shift in the contract management process saw changes to storage. Customer relationship management software (CRMs) and cloud-based repositories became standard ways to stow and retrieve documents and customer data—filling cyberspace with virtual filing cabinets, as their physical counterparts began to recede. These new systems of record-keeping were certainly a step up from manual contract management.
But time was still being wasted. Sales staff had to copy customer info from CRMs into each new contract or proposal, which created the potential for human error. Once a customer signature was received, additional information like PO numbers were often needed to provision services. Additionally, one wrong stroke of the pen would send the entire process back to the starting line.
According to Gartner, contract generation, negotiation, review and approval can account for close to half the time spent by a legal department—time better spent strategizing growth, guarding against risk, and supporting new revenue streams.
Accelerating Business Processes Beyond the eSignature
Electronic signatures solve for approval, but that’s only one leg of the contract management process. In fact, every step in the agreement lifecycle produces the opportunity to save time, conserve effort and expedite processes.
For example, modern enterprise software offers solutions that extend far beyond streamlined approval or improved storage techniques. Take contract generation. In the past, Microsoft Word was the default document-generation tool for legal and sales teams. Contracts were drafted on desktops, then manually cycled through the organization—from team to team and person to person, via email. Comments were hard to read—and version conflict ruled the day. The challenges of traditional contract generation processes created issues like:
- Delays in closed deals
- Increased costs
- Soaring inefficiencies
- Lost revenue
- Poor customer experience
- Increased risk.
Now, contract generation can be a fully synced and automated process that lets team members track progress and access, edit, and store contracts on one central dashboard.
Clause libraries allow team members to store templates and pre-approved clauses in a central location to be accessed from anywhere, enabling non-legal employees to generate contracts quickly and independently. This reduces wait time and frees up your legal teams to focus on higher priority responsibilities. What’s more, the contract management platform eases the review and commenting process, expediting negotiations and speeding time-to-close.
These changes to the contract management process have led to:
- Increased efficiency
- Lower costs
- Faster revenue generation
- Better customer service
- Increased digital capabilities
- Better metrics, reporting and qualitative outcomes.
The right contract software can improve workflow at every step of the contract management process. It can drastically reduce the time it takes for contracts to travel between sales and legal departments within your organization by streamlining the manual approval, redlining, signing, and routing of sales contracts. Ultimately, contract lifecycle management gives you the freedom to reallocate precious resources where they’re needed most.
A better way forward: smart documents and artificial intelligence
Contract lifecycle management has come a long way from the ink-and-paper days, but there’s still room to grow.
Despite rapid changes, DocuSign’s “2019 State of Content Management Report” found that most businesses still report that approval, clause management and workflow are the biggest pain points in the contract management process. As contract management continues to grow in complexity, an end-to-end contract management software solution like DocuSign CLM will become a business necessity. Additionally, future technological advancements including smart contracts and machine learning capability will provide your business with the insights and intelligence it needs to keep up with today’s fast-moving landscape.
According to software database Siftery, the average business employs 37 different tools in their day-to-day operations. Bringing your company’s contract software solutions under one roof will help you create, edit, share, track and approve agreements in one place—making your life easier, satisfying your clients and providing a scalable solution for your business.