In today’s fast-paced and digitally driven business environment, it is imperative to reevaluate and enhance traditional contract document management practices.
“On average, companies lose 9% of their revenue due to poor contract management.”[1]
“The average legal department lawyer spends up to 40% of their time working on tasks that don’t even require a lawyer’s expertise — and this includes a lot of contract work that could be handled (or prevented) with contract management software.” [1]
According to Black Book Market Research, “Healthcare providers in the U.S. spend $157 billion each year to manually manage their contracts. That’s because 96% of healthcare providers have not yet automated their contract management.” [2]
While traditions may provide comfort, relying on outdated methods can be burdensome, overwhelming, and time-consuming. Digitalization of contracts and documents offers numerous advantages over traditional methods of documents.
Here are key areas to consider for improvement with electronic contract and documents:
Seamless Collaboration
Traditionally, paper has long been the dominant medium for handling agreements and arrangements. However, it is imperative for businesses to recognize the significant advantages offered by electronic contracts and documents. By embracing Contract Document Management Software (CMS), organizations can unlock a range of benefits that propel their operations forward.
One of the key advantages of CMS is the ability to achieve centralized storage and effortless access through cloud computing. By transitioning away from paper-based systems and leveraging electronic contracts and documents, businesses can enjoy automated operations. CMS provides a secure and easily accessible repository for all contract-related materials, eliminating the need for physical storage and the associated risks of loss, damage, or misplacement.
Moreover, the adoption of CMS reduces dependence on paper, resulting in notable improvements in efficiency. Electronic contracts and documents enable businesses to use AI to streamline their workflows, enhance collaboration, and reduce the time and effort required for manual handling and processing among various stakeholders. This efficiency boost is particularly evident in data assembly for audits and surveys. CMS allows for easy retrieval and compilation of contract data, enabling swift and accurate responses to audit requests and survey requirements.
Additionally, the shift to electronic contracts and documents enables businesses to benefit from more efficient data storage and analysis. CMS platforms often provide advanced features for organizing, categorizing, and indexing contract data, making it easier to search, retrieve, and analyze information. This enhanced data management capability can contribute to better data driven decision-making, improved contract performance, and increased compliance with regulatory requirements.
Time Management and Efficiency
Traditional contract document management heavily relies on paper, which can be time-consuming and inefficient. Searching for specific documents or transporting physical files can lead to delays and frustrations. By transitioning to electronic contracts and documents, businesses can streamline their operations and significantly improve efficiency. With digital files, search time is minimized, and the need for physical transportation is eliminated. Contract Document Management Software (CMS) on the cloud further enhances efficiency by fostering collaboration and expediting the achievement of desired results. The cloud-based nature of CMS enables seamless access to files from anywhere, enabling teams to work together efficiently, even if they are geographically dispersed.
The adoption of cloud technology for contract document management is on the rise. Enterprise businesses are projected to have a 58% adoption rate of cloud-based solutions within the next three years. Similarly, small businesses are expected to embrace the cloud fully, with a projected adoption rate of 78%. This trend highlights the recognition of the cloud’s potential to improve efficiency and productivity in contract document management.
By reducing paper usage, adopting electronic contracts, and leveraging CMS on the cloud, businesses can eliminate inefficiencies and optimize their processes. This not only saves time but also enhances collaboration, responsiveness, and overall effectiveness. Embracing the cloud aligns with the growing trend of businesses recognizing its benefits, and positions organizations to thrive in an increasingly digital and interconnected world.
Curbing Wasteful Spending
“It’s estimated that healthcare organizations can save the equivalent of 2% of their total annual costs by digitalizing their contract management.” [3]
The wastefulness of paper usage is evident in the fact that approximately 40% of office paper is discarded within 24 hours of being printed. This leads to significant costs associated with printing materials, ink, and labor. By shifting to electronic files, businesses can reduce or eliminate these expenses entirely. CMS enables the storage and management of contracts and documents in digital formats, reducing reliance on physical printing and associated costs.
Furthermore, complex contractual elements can often be lost or forgotten in various forms when managed through traditional methods. This can result in avoidable expenses such as missed deadlines, penalties, or suboptimal terms. By utilizing CMS, businesses can benefit from timely notifications and reminders that help prevent such expenses. CMS systems can automate notifications for pending actions, ensuring that important deadlines are not overlooked and mitigating the risk of incurring unnecessary costs.
Promoting Sustainability
By transitioning from paper-based contracts to electronic contracts, businesses can drastically reduce their paper consumption. This reduction directly contributes to conserving forests and preserving biodiversity. Adopting electronic contracts and cloud-based CMS reduces the need for physical transportation and storage of paper documents. This leads to a reduced carbon footprint, as there is less reliance on fossil fuels for shipping and storage facilities. Additionally, cloud-based solutions often leverage data centers that aim to use renewable energy sources, further enhancing sustainability. Electronic contracts stored in the cloud can be accessed and reused without degradation over time. This reduces the need for reprinting and reprinting of contracts, preserving resources and materials in the long run.
Improving traditional contract document management practices may seem daunting, but it doesn’t have to be overwhelming. By reassessing everyday habits related to paper use, time management, and wasteful spending, businesses can adapt to their current needs. Contract Document Management Software with cloud features offers an advanced solution that goes beyond traditional comfort zones. A cloud based SAAS solution like AffableBPM not only offers a quality and customizable solution but can bring remarkable benefits in terms of efficiency, cost savings, and adaptability to the rapidly evolving business landscape. Here are some latest interesting statistics to consider for digitalizing your traditional contract management system:
“The global market for contract lifecycle management software is predicted to experience substantial growth, increasing from $1.5 billion in 2018 to $2.9 billion during 2023, at a compound annual growth rate (CAGR) of 13.5%, as indicated by a report from MarketsandMarkets.
According to a report by McKinsey & Company, organizations that leverage data analytics in contract management can achieve cost savings of up to 15%, reduce contract cycle times by up to 50%, and improve compliance by up to 90%.
According to a report by Gartner, by 2024, 60% of large enterprises and 90% of midsize enterprises will have adopted Collaborative Contract Management software to improve collaboration and transparency in contract management.”[4]
Have you considered stepping outside the confines of traditional contract document management software?
