A contract guarantees that the business will deliver a product or service, and the customer will pay for it
in return. Thus, contracts are a great way to build trust, strengthen relationships, and achieve financial
success. However, if done manually, contract management can become time-consuming and reduce
employee productivity.
Fortunately, due to the advent of contract lifecycle management (CLM) technologies, digital contract
management has transitioned from an afterthought to a time-and-cost-saving competitive advantage.
Here are five contract management trends helping businesses improve their contract workflows in 2023.
1. End-to-End Contract Automation
Traditional contract generation, negotiation, and approval methods rely heavily on human input and
repetitive tasks. Believe it or not, these manual contract processes are not only tedious, but they are
also prone to errors like duplication and inaccuracies.
End-to-end contract automation solves most of these problems, especially when dealing with non-standard contracts, revised project scopes, and complex document workflows. Moreover, contract management software integrates client databases and prevents human error by auto-filling documents using existing client or product information. Besides that, this technology accelerates the contract review process and provides retrievable versions and edits of contracts, reducing the occurrence of missed deadlines or project delays. The growing demand for features like dynamic approval cycles and comprehensive clause libraries also fuels the need for automated contract workflows.
2. Fast-Paced Digital Transformation
Thanks to the covid-driven rapid digital transformation, chasing clients for a signature is a thing of the
past. Electronic signature applications have rendered traditional wet-ink signatures obsolete. Similarly,
contract management software with a central document repository to store contracts has eliminated
the need for filing cabinets or shared drives. Also, as most CLM software is cloud-based, internal teams
and external stakeholders can access the repository anytime, anywhere, provided they have the
relevant user permission.
Digital identities have more or less replaced analog identifying methods. During a face-to-face
engagement with a client or vendor, it is possible to confirm a customer’s physical or analog personal by
comparing their ID to the name on their credit card. By doing this, you may verify that the ID’s photo
accurately represents the person standing before you.
For digital transactions, analog identification techniques aren’t sufficient to prevent online fraud since
there is no face-to-face interaction. Contracting parties can solve this issue by using digital attributes like
email addresses, passwords, one-time passwords, or credit card security codes to authenticate online
identities for authorized access.
3. Improved Contract Analytics
Compared to older versions, modern AI-powered CLM software can mine massive amounts of contract
data for actionable business intelligence, solving contract problems with a few clicks. So, in today’s
digital age, one should expect to observe their prevalent use in contract analytics.
A lack of intelligent contract analytics and visual dashboards often results in missed key milestones,
revenue leakage, and strained ties with clients and vendors. The contract management software
integrated with AI and machine learning will transform into a system that ensures timely milestone
delivery, stable cash flow, and mutually valuable relationships.
Furthermore, AI supports auditors in identifying contracts and clauses that require attention with
probabilistic sampling approaches. The natural language processing mechanism further analyzes
contracts to flag unapproved or risky language. These solutions help minimize risks and increase visibility
in complex sales, procurement, or compliance processes.
4. APIs, Customizations, & Integrations
Many organizations use separate systems like CRM, ERP, and others to manage various business
functions. Handling multiple software at the same time can badly affect the day-to-day productivity of a
business. A user-friendly, well-integrated CLM software will save you time, money, and operational
headaches. Using APIs and custom integrations can bring numerous benefits to an enterprise:
● Increased productivity
● Improved collaboration
● More areas for innovation
● New revenue opportunities
● Better stakeholder experience
5. Democratized CLM
In the past, in-house legal counsel or outsourced legal services handled contract management for a
company. Today innovations like self-service CLM, business user portals, and departmental contract
management have made contracts readily accessible to non-legal teams. These technologies allow for
electronic signatures, automated approval routes, contract redlining, and more to streamline contract
workflows.
Also, previously, contract management tools mainly focused on enterprise use cases, with procurement
and legal teams as the primary users. But they are now moving out of legal departments to empower
other teams like sales and HR to create and manage contracts themselves. CLMs have a built-in library
with hundreds of pre-approved contract clauses and templates. This tool enables non-legal employees
to customize an agreement according to their business needs within minutes. The result is faster
processing of routine documents, like NDAs and employment contracts, and more time for legal teams
to focus on strategic matters.
Closing Thoughts
As contract processes become more complex, keeping up with the latest trends becomes necessary to
run contracts efficiently. The best way to get started is to invest in contract management software.
Author Bio:
Qurat-ul-Ain Ghazali, aka Annie, is the growth manager at Contractbook and looks after all the organic
channels. She has been with tech startups and scaleups for a couple of years with a B2B focus. You can
find her socializing, traveling, indulging in extreme sports, and enjoying the local desserts when she is
not working.
