There are few better illustrations of how far technology has advanced over the decades than your smartphone. In 1945, scientists booted up one of the earliest versions of the computer: it was a hulking machine that took up 1,500 square feet, weighed in at 30 tons and had memory and processing capabilities that are barely a fraction of those of today’s pocket-sized devices.
Technological innovation has transformed almost every aspect of life since then, from your cell phone to, yes, contract management. And while even the most die-hard luddite isn’t performing their work on a slow, antique processor, many organizations remain mired in outdated practices and methods of handling important corporate agreements. Some of these outdated processes even predate those apartment-sized computers!
Outdated contract management processes aren’t just curious old relics – they can be extremely expensive to businesses, requiring more resources and effort and increasing the risk of value loss on contracts, as well as inadvertent contract breaches and other costly problems.
Here are four outdated contract management processes that are slowing you down and increasing your contract-related risks – and how to fix them.
Outdated Process: Sending Contracts to Be Signed Via Courier
The Problem: Though contracts need to be signed to be legally binding, the logistics of coordinating signatures can slow down contract cycles and even run the risk that a contract will stall and never be executed at all. Furthermore, having to print off lengthy documents and ship them back and forth for signature increases the costs of contracts (and takes a toll on the environment).
The Fix: Signing contracts electronically can resolve all of these issues. E-signatures are legally binding and allow contracts to be executed flexibly and instantly.
Outdated Process: Storing Your Contracts in Filing Cabinets
The Problem: Filing cabinets predate computers by a long shot – the earliest patent dates back to the 1870s! – and yet they’re still hanging around many offices, and still frequently employed for contract storage. Filing cabinets aren’t the only outdated storage method that are common for businesses – many employ tools such as Sharepoint and Excel spreadsheets to catalog agreements.
These outdated methods share several common problems. For starters, when you need to find a specific contract – or worse, a specific clause within a contract – it can take hours to sift through cabinets of agreements and read through countless documents to find what you’re looking for. Even worse: if you’re like 71 percent of companies surveyed for one Journal of Contract Management report, you may not be able to find what you need at all! These old contract storage methods also leave businesses vulnerable because they don’t provide adequate, built-in security to protect the sensitive information contained within most corporate agreements.
The Fix: Storing all contracts within a centralized cloud-based repository can relieve all of these issues. Storing contracts digitally ensures that you only have to look in one location to find any contract you need, while digitizing agreements and employing categorization tools like tagging make it easy to quickly search for the exact contract – or even section or phrase within a contract – that you’re looking for. Furthermore, using a cloud-based storage solution that employs key security features can protect you from both accidental and malicious breaches.
Outdated Process: Manually Onboarding Each and Every Contract
The Problem: Entering each new contract into a centralized storage location does take more work than merely shoving agreements into a drawer or filing location because it requires someone to read through every agreement in order to categorize it appropriately. Given the length of some corporate agreements, this can be a long, onerous task.
The Fix: Artificial intelligence capabilities, in which machines are capable of performing tasks that typically require human intervention, are already transforming elements of contract management processes. When it comes to onboarding new contracts, the right software can help you to automate this key contract management chore. Instead of having to carefully read through each and every new contract to determine its contents, AI bots are capable of crawling the text for you and suggesting relevant tags and metadata. While it’s still important to review these tags for accuracy, by automating the heavy lifting, contract managers can save hours and hours of upfront manual work.
Outdated Process: Relying on Calendars and Manual Tools to Remember Key Contract-Related Dates
The Problem: Contracts typically have numerous action items and other key requirements that must be closely monitored and adhered to throughout the contract term. But when responsibilities are distributed across individuals and teams or when you are responsible for remembering countless dates attached to a large volume of contracts, it can be tricky to remember each and every obligation, and a burden to have to remind everyone else of their assigned responsibilities. Meanwhile, failing to stay on top of these obligations can have costly consequences.
The Fix: Instead of relying on a patchwork of calendar reminders, to-do lists, and other outdated manual methods to stay on top of contract-related requirements, look for a contract management solution that stays on top of them for you. Tools such as automated reminders mean you can identify all of your contract-related to-dos at the time that you are onboarding an agreement and it is still fresh – and then rest assured that the system will remind you (or other assigned individuals) when the appropriate time comes.