Contract management is an element of business that is traditionally labor-intensive, time-wasting, and in the grand scheme of things, low-ROI.
Contracts are typically the ‘bridge’ that help small and big businesses alike secure deals and sell products or services – they are important, so lots of time is typically spent managing these contracts. However, the actual contract lifecycle is a process that does not need to be as painful as it tends to be.
Contract automation tools are beneficial for different types of businesses (both big and small businesses) and specialists in different positions.
Why Are Contract Automation Tools So Important for Business?
The business world is a fast-paced one.
In modern times, the number of complex contracts that businesses have to manage on a day-to-day basis in order to operate is increasing…rapidly.
It is far too easy for organizations to become overwhelmed with the large number of contracts they must deal with – by failing to keep ‘on top’ of these legal documents, this can result in legal fees, missed deadlines, and more.
So, in order for businesses to effectively manage their contracts, contract automation tools must be used. This guide can help you with more specific details on how the CLM software may improve contract approval.
What Are the Main Benefits of Contract Automation Tools?
There are many benefits of contract automation tools.
Some of the main benefits include:
- Easy contract creation (with contract and clause libraries, creating legally-valid contracts takes only a few clicks).
- Enhanced collaboration and negotiation (collaborating and negotiating is made simpler thanks to contract automation tools – users know exactly what phase the contract is at all times and can view the contract at the same time as everyone else).
- Complete remote access (the entire contract lifecycle – from creation to signing – is done via internet access, which means no need for in-person meetings, travel, etc.).
- Streamlined workflow (contract automation tools automatically send the contract to whoever needs to edit/approve/sign it – the software replaces the need for someone to manually manage the contract).
- Automated alerts (these alerts can be customized based on how often they appear, when they appear, what formats, etc. – these can be for signing, approvals, expiry, renewals, and more).
- Improved visibility (users can view various contracts and see where they are at in the lifecycle very easily thanks to these tools).
- More secure (contract automation tools typically provide a centralized database for all contracts that are password-protected – no need for computer folders or filing cabinets).
Who Can Benefit From Contract Automation Tools?
Contract automation tools are capable of helping businesses of all sizes, industries, and locations.
What Types of Business or Niches Can Especially Benefit From a Contract Automation Tool?
The following businesses can especially benefit from contract automation tools:
- law firms and legal-based businesses
- finance-related businesses
- hospitals and healthcare providers
- insurance companies
The reason these industries have a special requirement for contract automation tools is that not only do they deal with a large number of legal documents every single day, but the contracts are usually very complex and are often very important.
Contract Automation Tools: Big vs. Small Businesses/Teams
Contract automation tools are ideal for both big and small businesses and teams.
What Are the Benefits of Using a Contract Automation Tool for a Small Business/Small Teams?
Small businesses and teams can benefit from the following contract automation features:
- Data protection (most smaller businesses and teams do not have the resources to protect their data properly, so they need software to do it for them).
- Legal compliance (since smaller teams and businesses might not have sufficient legal counsel available, software that ensures legal compliance is ideal).
- Enhanced organization (the central storage feature offered by contract automation tools help small businesses keep all their contracts online in one place – since they might not have space for filing cabinets, this is a major benefit).
What Are the Benefits of Using a Contract Automation Tool for Big Corporations/Big Teams?
Big corporations and teams are usually ‘big’ for a reason – because they produce (or help produce) large amounts of revenue; this means that whenever processes can be streamlined or optimized, this can produce great results.
So, when it comes to implementing contract automation tools for these big businesses and teams, even if they only increase productivity by 3% or prevent 6% fewer missed deadlines, this can result in millions of extra dollars in revenue.
The bigger the company or team, the essential it is to optimize processes whenever possible – and contract automation tools make it very easy to do exactly that.
What Organizational Roles Can Benefit From Contract Automation Tools the Most?
The following organizational roles can benefit from contract automation tools especially:
Contract managers are required to oversee contracts and help accelerate the process and solve subsequent problems related to the process. Basically, they are a middleman between the two (or more) parties involved in any particular contract.
Contract automation tools make the life of a contract manager a lot easier.
Thanks to enhanced simple contract creation, enhanced contract visibility, improved security, centralized storage, legal compliance, automated alerts, and more… contract automation tools allow contract managers to focus less on meticulous tasks and on more important contract-related activities.
General Counsel and Corporate Legal Teams
General counsel and legal teams require tools to help manage the many contracts they deal with on a day-to-day basis.
Since contracts are legal documents that require legal advice and participation, contract management takes up a lot of valuable time for these departments – thanks to contract automation tools, a lot of these unnecessary tasks can be completely avoided.
Procurement is a contract-heavy sector of business that, when contracts are not managed properly, can have grave consequences on companies.
With contract automation tools, this helps procurement professionals manage their various agreements and renewals so that they don’t miss anything.
Also, easy reporting and dashboards help the procurement professional do their job as well.
Why Contract Automation Tools Are Essential for Every Business
Contract automation tools are the key to business development in almost any industry.
In this article, we discussed how various positions, industries, business sizes, and others can each benefit from contract automation tools in their own way.
These software solutions are versatile technology that can help any organization free up times and resources to dedicate towards growth-oriented activities.
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