Here’s an unfortunate reality: when it comes to contracts, most business teams see Legal as a black box. It’s not clear how long they’ll take to respond to requests, whether/when a contract is close to execution, or what the key blockers are for a pending contract. Contracting is thus time-consuming and unpredictable.
Legal teams don’t have it any easier. They find themselves pulled in many different directions, often with priority going to whomever shouts the loudest, and slowed down by long, drawn-out email chains, even for routine contract tasks.
The contracting back-and-forth between your company’s different teams directly impacts your bottom-line. The International Association for Contract & Commercial Management (IAACM) estimates that the average cost of processing a simple contract now stands at $6,900, a figure that has increased by nearly 40% since 2012. For contracts that are highly or even moderately complex, this figure can skyrocket into the tens or hundreds of thousands of dollars. The bulk of this cost comes from time spent coordinating between different departments.
If you’re like most companies, the problem isn’t that your contracts are too complicated. It’s that contract preparation and review happens in an unstructured workflow — usually over email — that makes collaboration difficult and transparency impossible.
Need a signature? Email legal. Unsure about a data protection clause? Email Compliance. Want to get approval for a final quote? Email Finance. With ad hoc processes, it’s easy to see how contracts can get mired in uncertainty and delays.
Not only do these bottlenecks slow down your business, they also lead to overworked employees. At one of our clients, a contracting specialist from the legal team hadn’t taken an extended vacation in over two years. The reason, she said, was that she was the only one who could review and approve certain contracts — even if the contracts were completely routine.
At bottom, the issue is that when departments collaborate without a clear set of rules, all sorts of messiness results. To standardize collaboration between your departments, companies needs to move the contracting process from the inbox to a common software platform.
How contract management solutions like Ironclad help
Ironclad keeps contract information and processes in one place. It enables any team that needs a contract done — whether that’s Procurement, Finance, Sales or HR — to collaborate with Legal efficiently and transparently. It does so by structuring, standardizing and automating contract processes. With Ironclad, every contract-related team sees the same information and knows exactly what to do next, rather than sending off an email and crossing their fingers.
Let’s take a common contracting process: collecting approvals. Ironclad automates complex approval chains and matrices (e.g., Finance needs to approve contracts for values greater than $10,000, but only after Procurement has already approved). Ironclad bakes approvals matrices into the platform logic, so that no one has to manually hunt them down.
Coordination across different departments is a universal business problem, but contracts pose an especially daunting challenge. The stakes are high and different departments own different parts of the process. The key to improving coordination is to make sure that all your departments are looking at the same information and roadmap. If you’re looking into contract management solutions, make sure you choose one that works for teams across your company — not just for Legal.
Ironclad makes contract management easy for Legal and business teams alike. With a walk-up usable interface, integrations with business systems (like Salesforce), and an accessible Activity Feed and Audit Trail, users can easily collaborate to finish contracts more efficiently and accurately, saving businesses time and money. See a demo today.
Ironclad is the #1 contract lifecycle management platform for innovative companies. L’Oréal, Cisco, Mastercard, and other leading innovators use Ironclad to collaborate and negotiate on contracts, accelerate contracting while maintaining compliance, and turn contracts into critical carriers of operational business intelligence. It’s the only platform flexible enough to handle every type of contract workflow, whether a sales agreement, an HR agreement or a complex NDA. The company was named one of the 20 Rising Stars on the Forbes 2019 Cloud 100 list, and is backed by leading investors like Accel, Y Combinator, Sequoia, and BOND. For more information, visit www.ironcladapp.com or follow us on LinkedIn and Twitter.
More stories from our team.