The Benefits of Digital Transformation Through Contract Lifecycle Management
This article first appeared on Legaltech News on June 15, 2018.
The face of legal is changing. Manual processes that once inhibited efficiency and growth are quickly becoming digitized. As more and more businesses move to the cloud, savvy legal departments are digitizing the contract lifecycle management process and asserting strategic value within their respective organizations.
Contract management is a key process that remains manual in a surprisingly large number of businesses. For 95 percent of the world’s companies, managing contracts is done outside of the cloud on desktops, or worse, still on paper. These workflow blockades force legal to focus on administrative tasks instead of strategic growth, limiting their ability to bring in revenue. While sales and marketing organizations are growing at a rapid pace, legal remains stuck on a slower trajectory, fighting for headcount.
The answer to all these problems? Digitizing processes. A simple task that takes hours can be automated to free up time to focus on delivering strategic value. As this strategy component grows, legal turns from a cost center to a profit center, which catches the attention of the executive suite.
This is true across industries—in everything from technology to higher education. Take thredUP, a secondhand e-commerce clothing retailer reinventing how people view sustainability in the apparel industry. Before switching to a digital platform for contracts, thredUP managed all their documents manually, storing them in folders on computer desktops. With everyone from the marketing to engineering teams creating and signing contracts, keeping track of all the different pieces could be difficult to organize. Renewing and expiring contracts weren’t always well-tracked, and the legal team had difficulty getting visibility into contracts across the entire company.
Switching to a cloud-based contract management platform changed how thredUP interacted with contracts throughout their entire lifecycle. From the very beginning, the platform raised awareness among teams, enabling legal to collaborate more while increasing compliance. Risk drastically decreased as visibility went up. Ultimately, the platform ended up saving thredUP money as they were able to get insights into auto-renewing contracts before they expired to avoid costly cancellation fees.
It’s not just tech and fashion companies seeing these improvements after making the switch to a digital platform, however. HEC Paris is one of the top business schools in Europe–they also use a contract management platform to increase their impact through technology. For an international school, sending paper contracts around the world to obtain signatures was not only time-consuming, but difficult to track while maintaining compliance. Implementing a digital platform allowed professors, staff and students to access and sign contracts quickly. With everyone behind their computers, contracts can be signed in a matter of minutes. In contrast to the time it takes to mail a contract across the world, this transformation for the legal department was drastic. Checking the status of a contract was simple through coded colors and tags, and the team found they were spending much less time on manual tasks.
With today’s business world moving at a fast pace, the smartest choice is for legal to move along with it. Both thredUP and HEC Paris pointed to their contract management platforms as a tool that eliminates bottlenecks and streamlines processes. Many legal teams are now creating digital initiatives to move towards the goal of working faster, smarter, and more efficiently.
Adopting these new technologies allows legal to make that strategic move from cost center to profit center. For thredUP, this started with gaining visibility into what contracts were necessary and which were going unused, but this is only the beginning. With more insights, templates for teams to work from, and legal having an easy approval process, the sales team is able to work faster deals and close more revenue. Teams that may have struggled to work together in a timely manner both get what they’re looking for: In legal’s case, higher compliance with more collaboration, and in sales’ instance, faster approvals and the ability to sign more deals. On top of these benefits, both teams increase their ability to eliminate unnecessary tasks and solve challenges faster.
Revenue impact in turn affects scalability. The faster revenue comes in, the faster an organization is able to scale, while continuing to maintain the highest quality of compliance. Enabling faster scaling is what catches the attention of the C-suite. A department that may have been looked upon as an additional cost suddenly becomes a strategic leader in helping business grow. Legal leaders can work on strategy and business development. Changing the underlying business processes behind everyday tasks uncaps the growth and puts organizations at a competitive advantage.
These core business gains prove what many other parts of business have been moving towards for years: Digitization enables teams to become more strategic and business-focused. Legal teams across the globe should be looking to the future by transforming their contract processes.
