What is contract automation?
Many businesses have taken steps to automate contract management with new tools in today’s digital-driven world. These tools have transformed the way partnerships are born and introduced much-needed security and analytics to previously complex, disparate projects. But first, what is contract automation? It’s the practice of automating processes related to contract creation, management, and maintenance with technology.
In the past, business contracts were paper-heavy undertakings that relied on dozens of manual processes. For some organizations, they still are. Between revisions, approvals, negotiations, and renewals, contract management is and continues to be a time and resource-consuming process that’s prone to human errors and redundancies.
Contract automation tools enable businesses to eliminate much of this waste, as well as expedite workflows and glean more insights from their partnerships. They streamline each phase of the contract lifecycle by automating key workflows, like document generation, storage, and access.
How does contract automation work?
Contract automation tools function primarily by reducing human error in key workflows. Tracking and monitoring changes, storing and organizing documents, managing risk and compliance – automation can perform or assist with performing many of these tasks, saving time and resources throughout the contract lifecycle.
Not all contract automation platforms offer the same features. Most of the functions we listed above are considered standard, but depending on an organization’s needs, they may prefer a tool that offers more in the way of analytics. Some features you’ll find in different contract automation solutions include…
- The ability to generate contracts (or create contracts from contract templates)
- Tools to expedite the contract approval stage (like electronic signature gathering)
- An organization system that provides for a centralized, accessible contract repository
- Custom reporting tools that can deliver alerts and generate insights about project KPIs
Who can benefit from automated contracts?
Any business that regularly enters partnerships with other businesses, vendors, clients, or employees can benefit from automated contracts. Each workflow in every process surrounding contract creation, management, all the way to renewal or termination, has the potential to be automated for greater efficiency and security. Doing so lightens the workload for everyone involved: managers, legal teams, leadership, and anyone else who touches the project.
The benefits associated with automated contract solutions don’t begin and end with the business using them. Those benefits are passed on to the partners, vendors, and clients involved on the other end of the agreement. The end result is a better experience for everyone involved – one in which every stage of the contract lifecycle is speedy, safe, efficient, and insightful.
How does contract automation help?
The benefits of contract automation are continuous, as automated workflows are designed to steadily improve over time. This is because they can be studied, adjusted, and tested for efficiency after enough data has been gathered from the workflow. Here are a few of the most common improvements an organization will see as it recalibrates its workflows according to that data.
Reduced human error
Automated workflows generally require very little human input once they’re up and running. The only time a human touches them is to adjust variables or conditions. Tedious manual tasks in the contract lifecycle (reporting, for example) that are prone to human errors can be automated for smoother, more accurate performance.
Standardized workflows
No need to do something differently every time – especially when you can save time and effort by standardizing your approach. Creating a contract from scratch each time a business enters into a new partnership can take up valuable time and resources. With contract automation software, an organization can create a base contract template that can be used again and again with small adjustments.
Smarter document storage
One key trait of automated contract management software is its ability to process, store, and organize important information. Earlier, we talked about how contract management has historically been a paper-heavy undertaking. Technology has enabled businesses to manage more data and documents than ever before, but automation-focused tech brings clarity (and greater security) to that process.
More insights from data
During the contract, how can an organization tell whether its performance is on-track? At the end of a contract, how can it assess whether the partnership was profitable? Contract automation tools shed light on questions like these with built-in analytics and reporting features that provide insight into key metrics. They help businesses know what’s working and what isn’t so those factors can be adjusted for better outcomes.
Better customer experiences
We’ve talked about the benefits of contract automation for businesses. But what about customers? When an organization implements a safe, smooth, and efficient approach to contract management, the benefits are passed on to their partners. Error-free workflows deliver higher quality results, well-organized documents facilitate better communication, and data and analytics tools keep deliverables on track.
Continuously improved processes
Contract automation tools support continuous process improvement. In today’s fast-moving business world, standing still isn’t an option. Organizations must continuously improve their processes in order to keep a competitive advantage, and the right technology enables them to hone those processes according to best practices as they emerge.
Streamline your processes today
At Nintex, we know automation has the power to transform organizations at every level. It already has for thousands of businesses across the world. In fact, more than 10,000 use our solutions. Discover how you can join them.
