If you’ve ever spent time as a corporate general counsel, you know that managing a contract is more complicated than it seems. While almost every contract starts with a request, and ends (hopefully) with renewal, there’s a lot of work—and sometimes chaos—in between.
Because the speed with which you funnel contracts through the process can make or break your quarter, it’s important to arm yourself with the proper tools to make contract management a major asset. For most best-in-class companies, this means an automated contract management solution. If you’ve been putting off adopting an automated contract management process, here are 5 benefits you can achieve from moving your contracts into the 21st century.
5 Benefits of an automated contract management process
When contract management is automated, everyone (sales, sales operations, finance, and the general counsel) benefits. Here are 5 things an automated contract management process can do for your business.
1. Automated contract management improves sales cycle times
An automated contract management process streamlines contract management and helps you move contracts quickly from one step to the next.
For example, with a manual system, approvals are generally where you see bottlenecks in your contract processes. With an automated contract management process, you can tailor approval workflows—including parallel and serial—so that business keeps moving at a rapid pace. And once one person approves, the next person in the chain can be notified that it’s their turn to take a look, ensuring the contract moves from one stage in the process to the next, quickly and seamlessly.
Imagine if three 15,000-unit orders arrived on the last day of the quarter—having the approval workflows and alerts in place would greatly increase the odds of closing those deals in time (and without painful all-nighters!)
2. An automated contract management process makes it easy to share critical information with your salespeople
Because instant access to account information is so critical to your sales team, centralizing all your contract information and making it easily accessible can be the difference between a win and a loss.
For example, if one of your key sales people leaves and you have to pass off the account to another rep, how will the new rep find all the associated documentation in order to close the deal and build a complete contract? With an automated contract management process, the information is stored and organized in one place, so you can avoid the long hunts through file folders, and searches through disparate systems and databases to get the information you need.
3. An automated contract management process minimizes your risk
As with car accidents or plane crashes, most contract-related mistakes are a result of human error, which is most likely to occur when teams are tired and stressed (end-of-quarter crunch anyone?)
Along with inevitable errors, packages containing complete contracts can also get lost—so along with incomplete, inaccurate pricing, lack of consistency, and other missing details in the contract, you may also be missing the contracts themselves!
When your contracts have errors, you open your company up to risk. A reliable contract management system can mitigate this risk by capturing all the information for you throughout the request, authoring, and approval process, so sales teams can focus on closing deals, and not worry about making mistakes that would lead to contract re-work or missed renewal opportunities.
In addition, with an automated contract management process, it is easier to realize the full value of each contract. Many automated systems offer fulfillment tracking, automated alerts linked to expirations, renewals, and key events, post-execution workflows, and sophisticated analytics and reporting—these features give you the insight you need to make better business decisions at a higher level, and decrease your risk.
4. Hit your sales goals
Some fast stats—organizations who utilize contract management:
- Improve contract renewal rates by 25%
- Increase revenue by 1%-2
- Cut contract cycle time in half.
In addition, automated contract management was recently listed by Gartner as a process that, when automated, increases sales efficiency. With more time to focus on sales, fewer process errors, and less busy work surrounding the deal, you better believe your sales numbers will increase.
5. An automated contract management process helps strengthen partner and customer relationships
Many automated contract management tools give you access to a full range of audit and reporting tools like contract compliance alerts, audit tracking at the field level, on-demand report generation, one-click access from reports to contract records, and easy integration with third-party reporting tools. These tools all give you the insight you need to monitor and maintain better relationships with both customers and partners.
With tighter control of the information flowing between you and your customers’ companies, you are in a much better position to manage and track your relationship. You are also better positioned to identify contract renewal candidates so you can create new contract drafts in a timely fashioned. When it comes to channel partners, automated contract management gives you the time to focus and manage your resources so you can make the most of your channel relationships.