The amount of time taken to sign off a contract post finalizing the deal is nearly as important as getting the deal itself. Imagine this: You chased a client for weeks and finally got him onboard. You might think that’s the end of it right? Not yet! The actual transactions and relationship between the parties is only valid once the contract gets drafted, reviewed, negotiated and signed. With manual processes, this alone could go up to a month or even more! Meanwhile, your work is delayed, your resources are getting wasted, your organization is not making any money from the new deal, and your client or vendor is getting increasingly impatient. Why risk so much when there is an efficient solution that can reduce the contract turn-around time considerably? Let’s find out how.
One of the important stages of contract lifecycle management and also one of the most time-consuming ones is negotiations. Negotiations entail multiple back and forth between the two parties in order to come to terms that are acceptable by and profitable to both. Handling this manually results in the process taking weeks at times which can easily be brought down to a couple of days or even hours with a streamlined, digitized process. It is also what makes contract management process more robust and distinguishes it from a basic ‘sign and store’ contract management solution to a more advanced end-to-end contract lifecycle management solution.
Let us look at the benefits of digitizing negotiations process and moving it online:
1. Process streamlining for improved efficiency
Negotiations stage can often lead to disputes owing to both parties differing on certain terms of agreements. Manual processes, no visibility into the workflow, lack of clause libraries with fall back clauses only makes this stage cumbersome, time-consuming and riddled with issues. Digitizing this process allows both parties to follow a pre-determined workflow with complete visibility and easy collaboration options from multiple platforms- CRM, CLM, external party portal, etc. This ensures the contract documents go to the right stakeholders for negotiation, enables seamless conversations between parties and makes it possible for a seamless, more efficient negotiations process.
2. Reduced turn-around-time for faster closures
The most basic advantage of moving a manual process online is the reduced turn-around-time. Same is the case with negotiations. Digitizing this process means automated workflows, visibility into the entire workflows, automated alerts and triggers to the right stakeholders for quick action, and access to all necessary documents through multiple platforms. Changes proposed by one party trigger alerts to the other parties for quick review and response. In case the negotiation needs a higher approval from the legal team, it automatically gets routed to the right stakeholder on the team and ensures quick closure.
3. Advanced safety features for enhanced security
Negotiations can be tricky and need to be handled carefully. With a manual process, this stage depends on back and forth of emails for proposals and counter-proposals, word document redlining, verbal phone calls, and no single point of truth. This can lead to miscommunication, confusion in the final version, and information misuse in the absence of a secure gateway.
An advanced contract management solution comes with user-defined access where, by pre-configuring certain rules, only the designated employees can look at certain contract information. This ensures contract documents don’t fall into the wrong hands and during times of negotiation, are not negotiated inaptly for personal gains. Another important feature a CLM solution offers is version control. Often, mail threads can result in the wrong version getting updated or even reflected as the final version. Version control saves all versions with appropriate naming and tracks every small change, ensuring only the latest version is shared with the negotiators. This also maintains an accurate audit trail. This avoids confusion, delays and ensures increased accountability and security. Digitizing negotiations process also makes way for a more robust and accurate approval and sign off process.
4. Enhanced analytics for accurate predictions
Artificial intelligence powered contract management solutions have the ability to extract all important data and analyze it for future predictions. A digitized negotiations process aids with the same. The smart analytics tool can run through all the data collected during negotiations like clauses that always get re-negotiated, vendor behavior, the steps that cause delays or contracts that get rejected. Analyzing this information, the company can make an informed decision about modifying certain steps, adding certain fall-back and alternate clauses to the repository or avoiding certain practices. This can eventually help rid all the issues arising in the negotiations process and make the contract management process more intuitive and advanced.
Looking at the above benefits, we can confidently infer that a robust end-to-end contract management solution with automated negotiations stage is the only way forward. With Artificial Intelligence making contract management more sophisticated, smart, and seamless every day, a rudimentary manual contracting process will only keep companies from progressing in this competitive, digital world. Bottom line: It’s time to digitize your negotiations process!