Five Key Benefits of Contract Automation
The status quo needs to go.
Sometimes by choice, but often thanks to a lack of budget, lawyers tend to be stuck doing everything by hand. For in-house counsel and other professionals who manage contracts, this means manually drafting, organizing, reviewing, and tracking hundreds or thousands of contracts and related documents.
That’s a huge problem. Manual contract creation and management are needlessly time-consuming, costly, and risky.
Legacy contract management methods and systems present a whole host of challenges, including:
- Outdated tools
- Tools that weren’t designed specifically for contract management
- Inaccurate or missing data
- Missed deadlines
- Difficulty enforcing standard language
- Inefficient workflows
- Inconsistent processes
- Security risks
- Difficulty collaborating across functional silos
- Lack of version control
- Overlooked red flags
These problems probably look overwhelming, and they often feel that way to the people working in legal, contract management, or compliance teams who have to handle them on a daily basis.
However, staying in that rut is a choice that business leaders can avoid. There’s a better way: contract automation.
What is contract automation?
Contract automation is the use of contract management software to standardize and align business processes related to contract lifecycle management (CLM) and analytics. Legal teams and other departments that manage high volumes of commercial agreements save time and effort that they used to spend on repetitive, menial tasks by using contract automation software to:
- Create contracts
- Establish automated workflows
- Standardize contract templates
- Define audit trails
- Cut down on manual data entry, search, review, tracking, and reporting
Automated contract management allows businesses to focus on the substance of their agreements, rather than waste time and energy on inefficient, manual contracting tools and processes. That focus helps teams foster stronger business relationships with their partners across the table.
Five key benefits of contract automation
Here are four key ways in which contract automation can help you boost your organization’s performance:
1. Streamline and scale up contract workflows and processes
Automation reduces the manual labor required for contract creation and negotiation. Deloitte reports that businesses lower their contract management costs by 60% when they adopt intelligent CLM tools.
It’s not just about cutting costs, however. By reducing the number of worker hours spent on drudge work, you free your team to spend more time on higher-value strategic projects and planning.
Additional benefits of increased contracting efficiency include:
Decreased time to deal close
Lawyers tend to focus on mitigating risk, but sales teams need to close deals. Your business has a better chance of closing if you put a favorable contract in front of a prospect sooner than the competition.
According to Goldman Sachs, contract automation speeds up negotiation cycles by 50%. With automated contract processes, you can improve your odds of closing more deals, and you can start generating revenue sooner from the deals you do close.
Improved customer relationships
Your buyers don’t like spending time on cumbersome paperwork. Boost customer satisfaction by using contract automation to simplify and speed up customer onboarding and renewals.
2. Improve the accuracy and visibility of business data
Managing all of your contracts in one unified, automated system consolidates the important data they contain, establishing a single source of truth regarding your business relationships. When you use a contract management system (CMS) that automatically tracks and generates reports on your contract data, you no longer need to worry about digging through disparate troves of files to find answers to questions, second-guessing the accuracy of data entered manually in a spreadsheet, or finding time to pull together reports for business executives.
Gartner predicts that businesses that adopt advanced contract analytics solutions will halve the manual effort required for contract review by 2024.
3. Facilitate cross-functional collaboration and communication
Automating contract management processes such as approval workflows reduces the amount of back-and-forth communication required to coordinate cross-departmental review of different sections of a contract. Features such as role-based access ensure that only the right people see a particular document. A smart CMS will further enhance security and efficiency by enabling you to direct colleagues straight to the specific sections that they need to see.
Automation also helps teams work more efficiently with contacts outside the business. Many deals sit on hold while workers chase down signature pages and signatories. A good CMS, however, can send an automatic notification to the authorized signatories to submit their e-signatures as soon as the parties sign off on the terms of the agreement.
These features take the hassle out of legal document generation, allowing teams to develop and nurture better business relationships instead of struggling with mountains of paperwork.
4. Mitigate risk and enforce compliance standards
According to a study by the Ponemon institute, businesses lose an average of $15 million annually in the forms of lost revenue and productivity, fines, and other setbacks stemming from compliance issues.
Regulations are constantly emerging and changing. When you have thousands of active contracts to manage, you don’t have time to manually update every document individually in response to every new piece of legislation that impacts a particular clause.
However, you can’t just leave your contracts as they are, either. You need a scalable way to keep your commercial agreements up to date with the latest regulatory standards.
That’s where contract automation comes in. Accurate contract automation software can direct you straight to the contract data that you need, on demand. With that real-time data at your fingertips, you can take timely action to rectify compliance gaps.
That’s not all. Whether you’re searching for force majeure clauses in response to a global pandemic or updating provisions related to new, internal company standards, contract automation can help you do it more quickly and accurately.
5. Eliminate wasteful spend
Vendor management and procurement teams that have to manage hundreds of contracts across multiple offices often find themselves spending money on vendors whose contracts they wanted to cancel, or that provide redundant products or services.
A good CMS lets you manage all of your vendor and supplier agreements securely in one place, including both contracts generated in the system and those written on third-party paper. Automated notifications regarding upcoming renewal deadlines empower you to stay on top of your vendor relationships instead of constantly trying to keep up.
How can Evisort help you automate contract creation and analysis?
Contract automation requires the right tools. Simply uploading your files to cloud storage won’t help you automate your contract management if you still need to do everything manually.
We’re here to help. Evisort leverages powerful artificial intelligence (AI) algorithms to provide the best automated Contract Analytics in the industry. That AI combines with a Contract Repository that integrates seamlessly with leading cloud storage and document management systems, and intuitive CLM features that accommodate the way your team works, rather than forcing you to adapt.
That’s the Contract Intelligence Platform.
Evisort’s contract intelligence augments lean teams, making them faster and more effective at contract creation, management, and analysis. You can boost your operational efficiency and enhance the accuracy of your business data, while drastically reducing the time you spend drafting and managing contracts.
Schedule a demo to see for yourself how the Contract Intelligence Platform can help you automate your contracting processes.
Find out how
can help your team
Test Evisort on your own contracts to see how you can save time, reduce risk, and accelerate deals.