May 8 by Steve Feyer
Everyone knows contracts are important. They define your business: what you are selling, what you are buying, who you employ and partner with, and much more. It makes sense that you would want to use your contracts as effectively as you can, but at many companies—even sophisticated companies— allow contracts to sit untouched in a filing cabinet or scattered across digital systems.
Why does this happen? Because contracts are complicated, and it’s hard to know how to begin organizing them.
At Apttus, with our 12+ years’ experience providing contract management solutions to hundreds of global enterprises, we’ve discovered that automation of contracts often proceeds along a familiar path. The enterprises that are most successful follow the same five steps to reach full automation.
Five Steps to Full Contract Automation
1. Accessibility and Compliance: The first milestone for contract automation is to get everything in one place, following all relevant policies for access, retention, and local regulations. This means setting up a single, global repository for all contracts and related documents. All contracts become searchable in real-time, including from mobile devices.
2. Analysis for Action: Once your contracts are in one place, you can begin to put reporting and workflows in place. You should be able to use any aspect of the contract for action: key dates for renewals, cycle times and other metadata, behavior of individual users, clause-level reporting, trends over time and more. Using real-time alerts, scheduled reports and ad-hoc analysis, your company will be able to capture all the valuable insight contained in your contracts. Companies reaching this stage already gain a significant ROI from a contract management solution—yet they can still realize even more value.
3. Control of Language: Next, you can begin to fully automate the process used to create your contracts. This can include several steps such as approved templates, standard and fallback clauses, automatic contract assembly and end-user self-service. Your exact needs are unique and can be discovered with the help of experienced advisors. Ultimately, your goal is that every contract is created and executed with complete accuracy, adhering to your company’s policies and within your company’s process, and with the greatest of speed and efficiency.
“Apttus is an important component for us in achieving our goals for operational excellence and profitability through increased automation and advanced technologies.”
Rupinder Goel, Group CIO,
4. Perfect Execution: Once your pre-signature contract process has been optimized, the next step is to automate your post-signature usage of contracts. This step requires automation of obligation management, including conditional and optional events. In other words, all the things that you contract tells your company to do, or the other party to do, must be turned into actions assigned to the correct department. This step also greatly facilitates revenue recognition.
5. Full Automation: The last step of your automation journey is to integrate your contract management processes across all your existing business systems, creating a truly end-to-end optimized business cycle. Most companies will have created at least some integrations earlier on their path. At this final step, you will be able to use all your contract obligations, and all your insights, to drive the rest of the business to always take the right course of action.
When your company ascends the final step of contract management, you will have an achievement that can drive true competitive advantage in your industry. Contracts define your business: Isn’t it time that you defined contracts as a business priority?