Why are Companies Transitioning to Contract Management Software?
Posted by Melanie Aizer on Fri, Jun 03, 2011 @ 11:20 AM
A paper-based contract lifecycle process is clumsy, time-consuming and costly. It requires human labor to create, arrange for distribution, follow-up with signatories, error-check, file and retrieve. It is prone to errors every step of the way, often uses expensive, time-consuming courier or mail services, and offers little control over the status of distributed contracts — have signatories received them? Have they looked at them yet? Are they lost in transit? Or is the signatory shopping around for a better deal with a competitor?
Contract management software optimizes every step of the process from contract creation, through distribution, completion, and application of business rules, to filing and retrieval. It improves profit and cash flow by dramatically reducing the number of people required to administer contracts and by speeding up the approval process. To understand how organizations are benefiting from this advancement in digital technology, we need to take a closer look at each step of the contract workflow process.
Step one: Contract preparation
The first step is to create a contract. Using a desktop word-processing solution (Word, Google docs, PDF, etc.), an administrator populates the contract with relevant data for each transaction, such as names, dates, dollar values, and so on. This is time-consuming, expensive and susceptible to data-entry errors.
Contract management software reduces the possibility of errors, by enforcing rules about the format and type of data that is entered into each field. Furthermore, it is no longer necessary to manually enter data. Costs can be driven down by:
- Automatically populating contracts with data from internal systems such as Customer Relationship Management (CRM), Sales Force Automation (SFA), Enterprise Resource Planning (ERP), and others.
- Integrating contracts with web sites offers two benefits. The first, is that it enables customers to enter data into contracts in a self-serve model. This effectively eliminates internal data-entry costs. The second, is that integrating contracts into web sites provides signatories with a guided form-filling process. This is important for revenue-centric contracts where the customer experience is critical in keeping abandonment rates as low as possible.
Business contracts often require follow-on documents that need to be signed. Insurance application forms may require an authorization for the individual to submit to a medical test, an authorization to take automated withdrawals from the bank, a void check, and other documents. These need to be assembled into a package and prepared for distribution — usually by standard mail or courier.
Contract workflow management has the ability to package together the relevant forms and contracts, capture data once, automatically populate relevant contracts, and instantly distribute them on-line or via e-mail. This drives distribution costs down and eliminates errors.
Discover How Your Company Can Easily Automate Contract Workflows - Immediately Improving Operational Margins
Download this Complimentary White Paper Today & Discover:
- A detailed cost-savings analysis of transitioning to digital contract management technology
- How to save 40% of labor costs required to enter, verify, correct and re-key contract data
- How to eliminate all mail and courier costs
- How to minimize storage and retrieval costs to only 10%
