What is contract automation?
This is Summize's guide to contract automation, where we'll answer the following questions:
- What is contract automation?
- What is contract automation software?
- How can contract automation work in your business?
- What are the benefits of implementing contract automation?
What is contract automation?
Contract automation is the process of authoring, negotiating, executing, and auditing a contract digitally and using automatic procedures. It allows both legal teams and business users to streamline partner relationships that are governed by contracts by creating a single source of truth. Contract automation simplifies and expedites contractual processes that were once manual and cumbersome.
Contracts touch every corner of your business, from HR to Sales, Marketing and Procurement, everything is carried out against a backdrop of legal. But when contract inefficiencies occur, the impact can be felt across the whole business, causing revenue leakages and financial penalties. That’s why using contract automation is so important.
What is contract automation software?
Contract automation software supports and encourages self-serve behaviour by allowing both legal teams and business users to apply automated workflows to every stage of the contract lifecycle. By utilising contract automation software, users can automate the process of creating, reviewing, and managing contracts digitally to create an end-to-end streamlined contract lifecycle.
By implementing contract automation software, businesses can automate the contract lifecycle, build collaborative workflows, and automate steps within the contract process. Therefore, contract automation software is as much for business users as well as legal teams. The automated workflows minimise the need for manual intervention, allowing business users to self-serve and create agreements against a set of pre-defined questions from legal. A true win-win scenario.
How does contract automation work?
Contract automation digitalises your existing legal processes and creates workflows that operate automatically.
By integrating into your existing programs, contract automation software supports users by accelerating their existing ways of working. The smart, automated workflows allow the contract to seamlessly pass through each stage of its lifecycle with minimal intervention.
Automate contracts to enhance efficiency and reduce errors
Jonny Jessop, Enterprise Pre-Sales at Summize, explains the fundamental role AI plays in automating contracts.
What are the benefits of contract automation?
By utilising integrated contract automation software, businesses can streamline and accelerate their contract lifecycle. The pre-defined workflows improve collaboration between legal and business users by encouraging self-serve behaviour, moving the contract from one stage to the next with ease, while allowing legal to retain full control without intervention.
“Summize’s ability to integrate into MS Teams and Word has empowered business users to self-serve on contractual tasks with minimum legal intervention.” Kristel Graham, UK Chief Compliance Officer, General Counsel and Company Secretary at Kloeckner.
Improved contract value
Overcomplicated and manual processes can lead to blockers, revenue leakages, and even contract abandonment. Forrester reports that 32% of businesses report reduced contract completion rates and abandoned deals due to inefficient contractual processes. Over a contract’s lifetime, without buffer zones, the lost value of the contract will impact the overall profitability. Businesses then begin to settle for a lower contract value as result of revenue leakages and late payment penalties. Research from KPMG found that up to 40% of a contract's value can be lost with close governance.
Contract automation streamlines contract lifecycle by improving cross-functional collaboration, standardising contractual information, and automatically tracking actions. Automation reminders of key dates provide teams with upcoming contract expiry, renewal, and payment dates, maximising the contract value.
"Summize has been transformational. It has helped notify us of key contract information we may have missed." Derek Ihnen, Contracts Administrator at Boon Edam.
Accelerated revenue
In business, time is money, and a stalled sales contract represents a delayed path to revenue. Delays in contracts can occur from slow approvals, inefficient contract processes, lack of resources or longer negotiations.
"We've managed to close deals about 40% faster, and we've shaved the deal length down to 4 months from 8 months. So, the business is loving us right now." Martin Cotterill, General Counsel and Chief Legal Officer at Thought Machine.
Contract automation software facilitates revenue. Smart workflows streamline contract creation and negotiation by simplifying and accelerating existing contract processes.
Better contract compliance
Contract compliance is key to achieving the maximum contract value. Missed deadlines, late renewals, and not meeting contractual obligations can result in financial consequences, terminated contracts, and even litigation. Research from World Contact and Management found that on average, businesses lose up to 9% of their yearly revenue due to poor contract management processes.
Contract automation workflows improve accountability, with automatic reminders of key dates, actionable tasks, and summaries, providing teams with better access to improved decision making at each stage of the lifecycle.
Increased efficiency
Contracts are long and complex documents. And their processes are often reliant on manual and outdated inefficient methods, which do not represent the digital world of today. Research shows that on average it takes 92 minutes to manually review a single contract, which prevents legal teams from focusing on high-value work.
"The ability to review contracts in Word with the Summize Add-In meant we reviewed 400+ contracts in 5 working days. The reviews were completed 85% quicker at a third of the usual cost compared to our previous processes." Joanna Luke, Legal and Compliance Director at Elior.
Contract automation tools simplify and accelerate your existing processes, without altering your working habits. By combining AI technology and humans to digitalise legal processes, teams can reduce their time spent reviewing contracts dramatically.
How to use Summize for contract automation
As the world’s first integrated CLM, Summize is a game-changer for businesses that work with contracts. Intelligent automation makes contract workflows simpler and smarter, uniting legal teams and business stakeholders.
Summize is different because we focus on three core elements of the contract lifecycle:
- Firstly, we automatically extract and summarise content, making the valuable data inside them easily accessible, with actionable tasks that are automatically added to your calendar.
- Secondly, we use intelligent automation to make workflows simpler and smarter across the business. We’re the first native solution that integrates directly into tools such as Word, HubSpot, Outlook, Teams and Slack. It’s an intuitive Q&A-style bot for all business users, acting as the digital front door to legal.
- Thirdly, our powerful data engine will give businesses access to better decision making and actionable insights, summarising risk and potential cost savings but also accelerating revenue opportunities. With Summize, you simplify and accelerate the entire contract lifecycle, without replacing your existing ways of working.
To start automating your contracts and contract processes, begin by booking your personal Summize demo. Our contract experts will show you the simplicity of contract automation and how it can benefit your business.
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