This article was originally posted in Chief Executive.
The state of modern business is rapidly changing. To thrive, it is imperative to take action and embrace new digital tools that modernize woefully archaic processes, in order to drive sustainable growth and success.
Yet many organizations are still stuck using outdated processes and tools. Does emailing a document back and forth and uploading to shared drives sound familiar? Maybe slightly reminiscent of certain existing contract management processes? What about walking a contract to an office, or even faxing a signature to a client? Still using two, three or more tools throughout the lifecycle of a typical contract? If so, you’re not alone.
Nearly 95% of businesses today manage contracts manually. This is neither a scalable nor a successful strategy. Contracts are easily lost, are often scattered making them hard to find, versions are often confused, and workflows are different with every contract. It’s frustrating for all parties involved. More than that, these “processes” result in lost revenue, missed opportunities, and sometimes hefty compliance fines. Would a CEO allow their financial department to operate like this? Definitely not. Yet the entire contract process, from origination, negotiation, execution, and renewal, effectively underpins and determines how a business operates. It therefore should garner the same scrutiny as an organization’s financial operations and systems.
Successfully managing contracts and creating an efficient, scalable contract management process that delivers value to the entire business first requires having every document digitized and in one place. Then, with best organizational practices in place, contracts can become a source for measurable financial improvements and a vehicle to glean critical insights to organizational performance, while helping teams realize their full potential.
Changing mindsets and how an entire organization works can be difficult. A common argument is that it takes more time to learn a new process. However, as the pace of business increases, the need for and pace of contract creation grows in parallel. Automating and digitizing these processes are essential for companies to successfully manage growth. Even though organizations can be resistant to a new process in the beginning, with the right solution in place, in a few months’ time they’ll wonder how they ever used anything else.
Despite contracts being one of the most lucrative resources for a business, their full potential remains untapped by most companies simply because they don’t know how to effectively manage them. Contracts are, in essence, mini gold mines of opportunity—not only for increased revenue, but for a stronger adherence to compliance and operational efficiency.
These mini gold mines are the top of a funnel that breaks out into these three different value adds—compliance, capturing revenue, and efficiency—which can all be mapped back to growth.
Compliance: How many times has a contract been sent back and forth between legal and other departments, or worse yet, been burdened with a hefty compliance fine after the fact because it wasn’t reviewed at all? If this sounds familiar, a contract management platform is one of the first tools that can significantly impact compliance. Instead of “forgetting” to send a document to legal or waiting weeks or months for a contract to come back, documents are centralized in one place and easily accessed by multiple individuals and teams. Becoming strategic is about setting an example of best practices. Compliance is one of the easiest ways to do this, and one that will be greatly appreciated by a legal team and C-suite alike. Not only does compliance minimize fees, it helps teams work faster. With a thorough knowledge of exactly what’s needed for the proper compliance, teams can focus on strategy and growth, not administrative tasks.
Capturing Revenue: Another surefire way to get the C-suite’s attention? Numbers, of course. Revenue growth means positive feedback from a board or public investors, and positive exposure for the business. Deals are easily lost, whether it’s due to delays, processes, or confusion. Creating an effective strategy mitigates these risks and ensures teams have the right tools to capture more revenue and truly uncap their growth.
Efficiency: As companies evaluate their processes, operational efficiency should be top of mind. Working faster means more revenue, and if it’s coupled with capabilities that ensure compliance, teams are set up for success. Growth happens not only when teams work faster, but smarter.
Connecting all people, processes and contracts in a single, secure, collaborative and completely digital contract management platform gives an organization everything it needs to manage contracts at every stage—to drive value and automate compliance.
Managing contracts efficiently and effectively is at the core of business success, giving the ability to uncap and accelerate growth. Remaining competitive requires the visibility and wherewithal to make sound decisions and take advantage of opportunities quickly. This is only achievable when all processes, people, and documents are in harmony.
To allow contract management to remain the last bastion of the manual process and opt out of digital transformation is the modern equivalent of Blockbuster ignoring cable, Kodak ignoring digital photography or Barnes & Noble ignoring digital books.