We’ve long been fascinated with the idea of smart robots that serve human society. Think about Isaac Asimov’s “I, Robot” short stories, Robby in the film “Forbidden Plant,” and R2D2 or BB8 in “Star Wars."
In these works, robots have some significant advantages over people. They are highly intelligent without being ruled by emotions. They act according to logical if-then processes. And they are not prone to the kinds of mistakes that humans make simply by being human.
Understanding 'Smart' Behavior
These types of robots aren’t part of our day-to-day existence (yet), but artificial intelligence (AI) has evolved enough over the years to allow us to implement their merits into our reality.
Today we see “smart” behavior embedded into video games (path finding, adaptiveness, decision making), smartphones (where natural language processing is used for speech recognition), autonomous cars (which use multiple AI disciplines) and even home appliances such as the iRobot.
We have accomplished all this by writing smart software that simplifies processes, making human lives easier. So why shouldn't we apply what we have learned to managing the lifecycle of a contract?
Better Contract Management
Getting a contract approved and signed to close a deal is part of every sales cycle, but it can drag on for what seems like forever.
There are a number of variables that can cause delays, including losing track of where the contract is; content clarity; compliance with the organization’s practices; confusion about the most recent version; interdepartmental politics and bureaucracy.
The common factor causing all this havoc: Humans.
While we don’t have Robby or R2D2 to help out in situations like this, we do have solutions. A contract management system can streamline the buying and selling process while ensuring, or enforcing, contract visibility from start to finish.
6 Contract Management Essentials
When a business starts shopping around for ways to manage its contracts, the options are myriad and the landscape can be confusing.
There are a number of solutions available for contract management software, but there are certain key attributes a system should have to best solve the pain points of the contracts process and generate the greatest ROI.
Six must-haves for contract management software are:
- Cloud storage
- The ability to manage a workflow
- End-to-end visibility
- A clause library
- The ability to integrate with a customer relationship management (CRM) platform
- The intelligence to better manage the contracts process and minimize the risks
Storing information in a cloud is becoming standard operating procedure for modern business for critical software, applications and documents. Using the cloud for document storage makes contract processes more agile.
Unlike a solitary hard drive or a local NAS, cloud storage allows accessibility from anywhere across the globe, both inside and outside an organization, which lets a business collaborate with customers throughout the entire contract lifecycle process.
Keeping contracts in the cloud means they are all in one place and versioned, eliminating the need to dig through millions of emails, local repositories or shuffle through piles of paper to find the right one.
Cloud storage facilitates collaboration, sharing and automation. This eliminates confusion, and most importantly, provides a full history and audit trail of all actions performed on it, ensuring compliance, security and piece of mind.
The reality of human nature means that each person in the contracts process has an individual work style and procedures he or she likes to follow. Most often than not, these don't necessarily gibe with a contract’s deadline or external parties involved in the process.
A contract management system can speed up approvals by introducing consistency and moving contracts along a predetermined path.
It can route documents for approvals and signatures to each participant and then shuttle them to the next to expedite the process and reduce bottlenecks.
Nondisclosure agreements (NDAs), for instance, can be especially sticky, and contracts cannot get off the ground without them. A contract management system can speed up the creation-to-signature process of an NDA.
Such a system also can eliminate manual steps by automating some tasks; not every part of a contract process needs human eyes or hands on it, and software that can complete these tasks automatically will accelerate time to closing and help simplify the sometimes-complicated contracts process, as well as eliminate human error.
Contracts are time sensitive, but they can get lost in various black holes – specific departments or certain participants’ desks.
There is particularly a precedent of back and forth between a business’ sales department and legal department. Visibility is critical to ensuring each task is progressing correctly and on time, and can help find any breakdowns in the process or recurring issues, and allow them to be corrected.
Having the ability to track contracts throughout the process and see on a virtual dashboard where they are, and what needs to be done to advance them, means a company will never lose track of a contract or have to hazard a guess where it is and what is holding it up.
Participants can view progress toward goals and can see at a glance the tasks in progress, the completed tasks and the ones that have not been touched.
An added bonus is a system that sends updates and notifications on task progress or assignments via email or through the system itself, which creates efficiency by ensuring everyone is on the same page at the same time.
A Clause Library
Clauses are required in a contract to reduce business risk and protect a company from negative scenarios.
Contracts are diverse entities, and a company should be able to control the language of a contract on a case-by-case basis, as different clauses will create different outcomes — but all should be engineered to reduce risks and shield a company.
Contract management software should place all clauses with all variations in one place, making it easy to search for, find and insert the appropriate clauses into a template and build the most robust contract possible.
Integration with a CRM Solution
The sales team is, effectively, where the contracts process starts, as a contract does not exist without a sale behind it. The most optimal and seamless way to manage contracts is to integrate them with a sales team’s CRM platform.
When contract management software can integrate with a CRM, a sales team has instant access to everything salespeople need to manage the contract process from where their sales activity occurs.
This way, the sales team does not have to leave its own platform to slog through another, wasting valuable time when the team could instead be selling.
The contract management process then becomes part of a sales team’s workflow without the need for a separate database or platform — everything is in one place. A document-centric contract management platform should seamlessly play along with any data-centric platform.
Intelligent Contract Management
Like a smart robot, contract management systems can provide additional insights that humans might miss or overlook.
For instance, some companies need to comply with certain regulations; contract management software should flag any clauses or parts of a contract that do not comply with laws or regulations, and alert a company what needs to be fixed.
This can help a company avoid fines or penalties for non-compliance.
Additionally, the software can highlight contract terms unfavorable to the business, so they can be adjusted during the contract management process and not later, when the stakes are higher (because of lawsuits, fines, etc.).
Some contract management systems have tools that can analyze data and generate reports.
Mining and analyzing data can add transparency and optimize a workforce by revealing process inefficiencies. Participants can see where processes are being held up and avoid these bottlenecks in the future as well as better determine when a deal will close.
Just because we don’t have sentient robots to make our lives easier doesn’t mean we need to work like it’s still the Dark Ages.
A contract management system should connect people and departments, and facilitate a more intelligent contracts process by reducing inefficiencies, creating visibility into task delegation and completion, and automating less critical processes.
This cuts the sales cycle by days or even weeks and puts a company in a better position to zero in on its higher goals: closing more sales and generating more revenue, quicker.