Digital Contract Management: The Underappreciated Investment
Contracts have always been – and will always be – a necessary element of doing business. The proliferation of paperwork associated with contracts is time-consuming and cumbersome. At the same time, contracts are an indicator of a business’s success. Reducing operational costs while increasing the number of contracts a company manages requires a delicate balance of technologies and processes.
Consolidating contract management activities in a single location offers a unique opportunity to invest in a cost-saving solution that enables revenue growth.
Burdened with Glorious Paperwork
While people typically view contracts and paperwork as mundane activities, they rarely consider what these say about a business’s success.
The more contracts an organization manages, the more revenue potential it has. Consider the following examples:
• Non-disclosure agreements with partners: channel partners are feeding the sales pipeline
• Customer contracts: the sales team is generating revenue
• Employee contracts: the organization’s financial stability means workforce expansion
People will never say that they love being buried in paperwork. At the same time, paperwork is often a sign that the business is healthy.
More Contracts. More Problems.
Although more contracts indicate a healthy business, they also create operational burdens. In many organizations, the contracts process is time-consuming and cumbersome.
Multiple Stakeholders
At a bare minimum, contracts require two signatories. However, for more complex transactions, a single contract might require four or five people from initial request to execution. Consider the following process for a sales contract:
• Account executive requests a contract
• Customer reviews the contract and requests changes
• Legal reviews the changes and signs off on them
• Customer executes the contract
• Internal stakeholder executes the contract
This process includes five handoffs across three people, and this is a simplified example. Most contract negotiations require multiple revisions or reviewers.
Inconsistent Contract Language
Document storage silos create operational challenges and inconsistent verbiage. Often, individual departments draft their own language and have the legal department review it. Further, many companies lack a centralized repository storing the most up-to-date language.
This creates operational inefficiencies across the contracts process, including:
• People accessing executed contracts to find the right language
• People spending time searching for what they need
• Legal reviewing more contracts while trying to create consistency
Security and Privacy
Contracts contain sensitive corporate and personal information. A lack of centralized repository increases security and privacy risks, especially if people save a contract to their personal drive so they have example language.
Consider the following contracts and the sensitive data they contain:
• Sales: Pricing information and customer name
• Employee: Protected personal data like social security number, home address, birth date
• Partner: Pricing information, incentives
Many organizations store contracts in cloud-based workspaces that have limited access controls. Further, these tools often fail to provide adequate data protection once the contract leaves the organization’s workspace.
Difficult Deployment
In some cases, organizations attempt to overcome operational challenges by integrating their digital workspaces with eSign tools. Unless a company purchases a tool specifically designed for contract lifecycle management, it needs to find a digital signature solution that does not require an API connection to its digital workspace.
Problematically, integrating the eSignature tool and the online workspace may not be simple. Third-party integrations can be challenging, and organizations should:
• Understand and discuss their use cases prior to purchase
• Look for workspaces with native eSignature capabilities
• Determine whether they have the technical expertise to implement
Multipurpose and multitasking solutions
Organizations should for solutions that respond to more than just their contract management needs. They should look for holistic solutions that address their various needs.
Security First
Security and privacy are mission critical. Whether using a tool across the whole organization or only for a small subset of the employee population, companies must start by looking at security and privacy capabilities.
Contracts contain sensitive data, and organizations need to ensure that whatever solution they implement provides:
• Fine-grained access controls
• End-to-end encryption
• Zero-knowledge capabilities
Typically, contract recipients are not employees, meaning that once the contract leaves the organization, there’s no control over what happens to the data. During the due diligence phase, organizations must consider how much control they retain over the contract across its lifecycle. They should be able to:
• Revoke access at any time
• Define the time frame for access
• Automate access revocation
• Track who accesses the document and how they access it
Additionally, the solution must provide the appropriate level of encryption. Many workspaces encrypt data on their servers, meaning that they hold the decryption keys. With a zero-knowledge solution, all decryption keys remain on the client-side servers.
Built-In eSignature Functionality
Today, organizations have more digital options than ever before. Software-as-a-Service (SaaS) solutions increasingly add robust sets of capabilities, including eSignature options. For example, organizations provide these solutions to the departments that regularly work with contracts. This option is more cost effective than implementing an API or purchasing a dedicated contract management tool. With the wide array of SaaS options, organizations can make decisions that work best for their unique use cases.
Leverage automation and workflows
Automation and workflows streamline the contracts process, eliminating the cumbersome, time-consuming manual processes that people hate. For example, the right solution should:
• Enable workflows that streamline contract lifecycle
• Incorporate the ability to create templates
• Provide visibility into contract status
Document actions for compliance
Since contracts are legal documents, organizations need to document their processes. Any solution used to manage contracts should:
• Document changes made to the contract
• Provide a unique identifier for each signatory
• Incorporate time and date stamps
• Track access for audit purposes, including user IDs, IP addresses, and device used
Digitize the Contract Lifecycle to Enhance Revenue
Streamlining and securing the contract lifecycle presents a cost savings opportunity that simultaneously benefits a company’s financial bottom-line. Most activities and tools that save time present a cost savings from an operational standpoint. However, streamlining the contracts process ultimately provides a bottom-line benefit by helping close deals faster.
When organizations digitize the contract lifecycle, they get the best of both worlds. They mitigate risk and reduce operational costs. Simultaneously, they speed up the sales cycle and provide better customer service.
In an economy where companies must optimize their technology investments, contract digitization provides the ever-illusive two-for-one opportunity.
A solution for improved contract management
Tresorit offers a zero-knowledge, end-to-end encrypted solution that you can complete with our easy-to-use electronic signature add-on, Tresorit eSign.
Tresorit eSign lets you create and sign eSignature requests in just a few clicks. Once your document is signed, you can store it safely in your secure Tresorit workspace.
Discover if Tresorit eSign is a good fit for your business:
