5 Signs You Need Modern Contract Software
Today’s business landscape is fast-paced and constantly evolving. Modern contract software has changed how businesses approach contracts and contract management. It has also allowed businesses to have more control and flexibility in their contracting process.
Many businesses have yet to adopt modern contract software, despite the many benefits. If you haven’t taken that leap, certain contracting issues can indicate your business needs modern contract software.
Modern vs. traditional contract management
Modern contract management digitizes the contracting experience. It allows you to use contract lifecycle management (CLM) software to automate your contracting process through all the contract lifecycle stages—from creation to renewal. In modern contract management, you can streamline your contracting process on a single platform and foster real-time collaborations with all contract stakeholders.
Traditional contracting uses inefficient methods and tools that weren’t built for contracts. Many traditional contract management activities are manual and rely on employees to track and manage contracts. This can slow down deals and make contracting a frustrating process.
Signs you need modern contract software
You may have developed an internal system for managing your contracts, so you may not be eager to pivot to a new system. However, if you experience any of the following in your contract management, it’s a clear sign you need modern contract software.
1. You have nothing that takes care of contracts from generation to renewal
In traditional contracting, a business may use Word doc to create a contract and send it via email or courier. It will redline with Word, negotiate via email, store the contract in file cabinets, local storage, or cloud storage, and track execution using spreadsheets. You have a disparate system pieced together to manage the whole process.
If your contract management looks similar to the above scenario, it’s a sign that you need modern contract software. One benefit of modern contract software is that it provides a single platform for all your contract activities.
Instead of moving your contracts from one tool to another, you can streamline everything on a centralized platform. You can create, negotiate, redline, sign, and store contracts without changing tools.
Apart from the fact that moving contracts from one tool to another wastes time, it leaves room for errors. This is common in the redlining and negotiating stages. A contracting party may forget to track changes when redlining. During negotiation, communication may get muddled up in email threads, parties are not in sync, and they may be working with different contract versions simultaneously.
2. Deals are delayed because of manual review and approval
Contract approval is a key stage in the contract life cycle. A single contract may cut across various departments. Those departments and other stakeholders need to review the contract and confirm favorable terms. Everyone may have different opinions, and they all need to consent before the contract can move to the signing stage.
Contracts often stall at this stage, especially when these reviews and approvals are manual. Many inefficiencies and communication errors can further complicate things. For example, you may forget to include a colleague’s email or send the wrong contract version.
You also need to consider that different departments have different motivations in contract management. Sales wants to close deals fast, and legal wants to minimize risk. Often, Sales may be unaware of where contracts are in the lifecycle, creating more friction between the departments.
The approval stage requires transparency and high-level collaboration between stakeholders. Modern contract software is designed to foster real-time collaboration between stakeholders. Automating your contract management can help speed up your approval stage. You can use contract management software to create contract templates and boilerplate clauses, eliminating the need for approvals for some contracts or minimizing the time spent at this stage.
If the approval stage takes too long, it can cause tension between your teams, frustrate your partners, and ultimately affect your bottom line. Modern contract software can help you fast-track the approval process.
3. Your CLM doesn't integrate with clickwrap
A clickwrap agreement is an electronic agreement users consent to by clicking a button or checking a box next to acceptance language such as, “I agree.” Also known as click-accept, click-to-sign, or clickthrough, clickwrap agreement removes the need for an electronic signature.
Using clickwrap agreement instead of the conventional digital signature is convenient for providing a great customer experience and minimizing risk without affecting conversion. B2C businesses use clickwrap agreements on sign-up pages, login pages, and checkout flows.
Clickwrap agreements are cardinal if your business offers products and services online, especially in the B2C space. It’s ideal for standardized high-volume contracts like your Terms and Conditions and NDAs. However, it’s also gradually gaining ground in personalized contracts in the B2B world. According to Brian Powers, Clickwrap will profoundly impact how businesses handle all types of contracts.
A CLM that integrates smoothly with clickwrap agreements is vital in today’s business landscape. This is an important feature to look out for when choosing a CLM provider, as many CLMs in the market do not have this feature. If your CLM doesn’t integrate with clickwrap, it may indicate that you need another provider.
4. Your e-signatures still require envelopes
The contract signing stage is still a hassle for many legal departments, even those using CLM software. Getting parties to sign contracts often takes lots of time and effort. The traditional way of collecting signatures is by sending the physical document to the contracting parties to append their signatures. However, when contracts became digital, parties could sign contracts online using e-signatures.
E-signatures were easier to obtain, but it was still a clunky process. To collect e-signatures, you’d send the document in a digital envelope. The envelope holds data such as the signer’s name, recipients, and places the signers will sign. You would need a separate workflow to collect and track the e-signatures. This can be tedious, especially when dealing with high-volume contracts.
Modern contract software has gone a step further. It allows businesses to affix signatures directly to contracts and send signature requests from the platform. You don’t have to create and manage a new workflow just to collect e-signatures.
With modern contract software, you can collect e-signatures in checkout flows and embed them anywhere on your website. This way, you can get users to sign agreements at different transaction points. For instance, if you need numerous users to sign an NDA in a transaction, you can embed it on your website. Users will be redirected to fill out and sign the NDA without hassle.
Your system for collecting e-signatures may be inefficient if it still requires envelopes and building workflows, and you cannot collect e-signatures in checkout flows or embed them on your site. With modern contract software, you will have more flexibility in getting users to sign your agreements.
5. Implementation is long and often unsuccessful
Contract implementation is the crux of contracting. How your organization executes contracts is crucial to your success. Contract implementation requires complying with the deliverables, milestones, and deadlines. You’ll waste the effort and time you put into drafting and negotiating contracts if you don’t manage them properly. More than that, poor contract management could lead to revenue loss. For instance, a delay in fulfilling a contractual obligation may amount to a breach of contract.
In contract implementation, it’s essential to track contracts to ensure compliance. This is more complex if your organization manages hundreds and sometimes thousands of contacts simultaneously. You need a system to track your contracts, keep tabs on all your contractual obligations, and ensure that the other party meets their obligations. Some businesses use spreadsheets to track and manage their contracts. When there are lots of contracts involved, it can become exhausting.
Modern contract software makes contract implementation easier. CLM software turns your contracts into searchable metadata that is easy to locate and access. You can also automate many mundane tasks in contract implementation, like setting reminders for specific tasks and milestones in the contract. This way, you minimize the risk of missing critical deadlines.
Modern contract software for more efficient contract management
If you experience undue delays in your manual contract review and approval process, modern contract software can ensure all contract stakeholders collaborate efficiently and your contract process is transparent. Modern contract software can integrate with clickwrap, and collecting signatures won’t require a new workflow.
Adopting modern contract software in your business’ contract management can help you become more efficient in your contracting process. Instead of using tools that weren’t built for enterprise-level contracting, you can use software designed specifically to automate every stage of your contract lifecycle. You can finally use software that keeps up with your contracting needs.
Table of contents
- Modern vs. traditional contract management
- Signs you need modern contract software
- 1. You have nothing that takes care of contracts from generation to renewal
- 2. Deals are delayed because of manual review and approval
- 3. Your CLM doesn't integrate with clickwrap
- 4. Your e-signatures still require envelopes
- 5. Implementation is long and often unsuccessful
- Modern contract software for more efficient contract management