3 Reasons to Digitally Transform Contract Management
Organizations must accelerate digital transformation initiatives now more than ever. The pandemic put many companies that still rely on manual processes at risk. Although you may understand the need to adopt new technologies quickly, the decision of what strategy to use before you start is still critical to ensuring a successful rollout.
For in-house legal, procurement, sales, and other teams involved in contract management, focusing on digital contract transformation (DCX) is where you can achieve the most benefits in the shortest timelines. DCX provides businesses the ability to digitally transform contract management into a modern and agile function. Even with COVID-19 disrupting operations around the world and leading to the rapid adoption of new technology, four out of five digital transformation (DX) initiatives still fail to achieve the company’s goals.
Careful planning, budgetary support, and recruiting the best talent aren’t the only elements required for a successful DX project. Often, the ambition to change everything is what dooms the initiative from the start. A DCX approach helps organizations streamline and automate the most important facets of contract management and related business processes before rolling out more changes to other BUs.
Advantages of Digital Contract Management Transformation
Prioritizing digital transformation of your contract lifecycle management (CLM) allows you to realize tangible benefits quickly. The role that automation, centralized management, real-time analytics, collaboration, and improved security in contract lifecycle management plays can help any organizations to achieve many of their short- and long-term goals.
- Greater control over the entire lifecycle of your commercial, employment, and supplier agreements
- Accurate insights into the exact bottlenecks that are holding up the fast and efficient processing of contract-related tasks
- Reduce the effort required to ensure governance and compliance while allowing every resource to have access to the related contracting information
In fact, the ability for an organization to digitally transform contract management will help build a stronger overall foundation for successfully executing its broader DX goals and strategies. Below, we cover three reasons why every business should digitally transform contract management and set you on the right path to transforming your organization into a digital-first business.
Top 3 Ways to Revamp Your Digital Contract Management Strategy
- Streamlining the Contract Negotiation Phase
- Added Agility for Improved Efficiency
- Support Features that Deliver Maximum Productivity
1. Streamlining the Contract Negotiation Phase
Almost every contract goes through multiple versions and iterations before you can finalize the final document. Doing this manually was a necessity in the past and technologies like email did provide teams with more efficiency, but the sheer amount of unstructured data and rushed filing practices made most pre-approval contract stages progress extremely slowly.
Every time a resource missed something or updated the wrong version of the document, it adds time, costs money, and could lead to errors or let critical omissions creep in. It also slows down your time to revenue for sell-side agreements and may delay important purchases. A digital CLM system such as contract management software from Contract Logix reduces the labor required to draft the initial agreement, negotiate the document with all parties, and collect feedback without compromising the final version’s accuracy.
Then, once approved, you execute electronically it’s automatically married back to the software. It’s a completely digital process and a great example of why you want to digitally transform contract management.
A digital CLM system benefits negotiations by:
- Providing you with the automated comparison of different versions while retaining all the change history during the process for auditing
- Allowing you to review and approve every proposed change while generating a notification to keep everyone else in the loop
- Collaboration between all the required internal and third-party resources
- Giving complete visibility into where the negotiation stands
A digital CLM system can also support vendors and suppliers with all types of agreements, making it the ideal way to optimize all business-critical processes inside any type of organization.
2. Added Agility for Improved Efficiency
Adding value to the organization depends on making strategic decisions quickly and allocating the necessary resources to implement the solutions, which may take weeks of high-level meetings. Once the company approves the project, any contracting problems must not delay the process while expediting a project shouldn’t lead to increased costs either. Digital transformation of the contract lifecycle should be a priority when speed and agility become essential.
The shorter the negotiation, approval, and execution phases of the contract, the more value it adds to the company. In addition, it can free up your legal resources to focus on higher-value and more strategic activities like risk mitigation instead of routine daily tasks.
When you digitally transform contract management, you gain the agility you need to respond effectively to any situation as it arises – and you have the ability to execute your wider business strategy efficiently. Every resource and stakeholder has access to all the latest information, many activities are automated such as workflows for approvals or obligation and date management, and team members can securely and appropriately perform work from any connected device.
Digitally transforming contract management with a digital CLM system speeds up every element in the contract lifecycle without compromising accuracy, compliance, or hampering the execution of your business strategy.
3. Support Features that Deliver Maximum Productivity
Highly intuitive user interfaces and extensive configurability of a digital CLM system allow you to easily configure and optimize it according to your unique requirements. You can support every part of your CLM business process and digitally transform contract management using no-code configurations that are easy to change as your needs change. To connect other systems, APIs ensure the safe and secure transfer of vendor information, user details, customer data, and any other element required to speed up the contract management process.
A clause and template libraries ensure you use the approved language from your legal department in every agreement and reduces the need for multiple reviews from these specialized resources. Teams can create negotiation-ready agreements very quickly.
Collaboration tools keep your resources up to date and allow them to respond to any issues effectively. Electronic signatures mean the execution phase can start as soon as the final draft receives approval from all the parties.
Finally, you can generate metrics about the process from day one and review where any improvements are necessary. After all, digital transformation is all about data and when you digitally transform contract management you can now harness the wealth of data in your legal agreements.
A modern and digital CLM system provides you with complete oversight over your entire lifecycle, highlighting the KPIs that influence your execution efficiency and where your resources are running into problems regularly.
Advancing Your DX Strategy and Digitally Transform Contract Management with Contract Logix
The pandemic proved that smart and efficient execution of agreements is vital for success. At Contract Logix, we saw customer usage of our contract management software grow by triple-digit percentages during COVID-19. Similarly, the use of electronic signatures increased by quadruple-digit percentages, proving that companies need a faster approach to how they negotiate, draft, and execute contracts globally.
The need will only accelerate in the future as more organizations start realizing the benefits available from building a digital transformation strategy around their DCX. Your CLM solution should help you maintain version control, manage communications effectively, speed up the review and approval cycles, and ensure you remain in complete compliance every step of the way.
To discuss your digital contract transformation objectives with a team of industry experts, speak to Contract Logix today.