Contracts are some of the most important documents representing a company’s business and relationship with its vendors and partners. With large companies signing thousands of contracts yearly, having an advanced, automated contracting process in place is important for efficient contract management. Any delays in contracts due to hiccups in the contracting process can adversely affect the company’s business, financials, and relationships.
One of the stages in contracting lifecycle, known for causing delays and problems is the negotiations stage. With constant back and forth of contract documents during this stage, and roadblocks in reaching a consensus that benefits both parties, this stage is often responsible for stalling contract progress. Moreover, manual processes add to this delay with no visibility into where the documents are stuck, confusion over the latest version, and emails lost in the bulk.
For these reasons and more, digitizing and streamlining negotiations process is of utmost importance. Let us look at how digitizing can turn around contract negotiations time and move contracts forward swiftly:
- Robust, automated processes
A digitized, automated negotiations process is the key to streamlining the process and making it error-free. A pre-configured, automated workflow can ensure contract documents are going to the right reviewers. The reviewers are then alerted of the documents through triggers which facilitates a quick response. The system autosaves every version of change maintaining an accurate trail of every document version for audit purposes. Autosaved documents with version control helps avoid confusion about the latest version and document flow through the CLM system eliminates the multiple back and forth over emails.
- Faster closer time and reduced TAT
Negotiations involve multiple stakeholders and multiple rounds of contract reviews and updates. With documents getting shared via emails for proposals and counter-proposals, these often get stuck with one person, get lost in bulk emails, and add to the already time-consuming negotiations process. An advanced CLM solution with automated workflows opens doors to quick seamless flow of documents. With visibility into where documents are at any given time, stakeholders have the added responsibility to respond quickly and within time. A collaborative CLM platform enables stakeholders to converse and collaborate through a single platform, from any CRM, external portals, further saving time and reducing the cycle time.
- Advanced security features
Considering how tricky negotiations can be, these need to be handled carefully. If contract documents fall into wrong hands during this stage, there are chances of misusing contract data for personal gains and approving terms not beneficial to the organization.
An advanced contract management system comes configured with user-defined access. This ensures only a few designated resources can access specific contract documents and keep them shielded from unwanted breach. Moreover, despite multiple versions and constant back and forth, the version control feature saves every version with appropriate naming and tracks every small change, ensuring only the latest version is shared with the negotiators. This avoids confusions WRT the final version and keeps a record of who made what changes and when.
- Enhanced analytics
AI powered contract management solutions can extract all important data from contracts, analyze it, and use it to learn and predict outcomes. A digitized negotiations process provides key data to accelerate the learning process and aids in making the solution smarter.
The smart analytics tool crawls through all the data collected during negotiations like clauses that always get re-negotiated, vendor behavior and conflicts, the steps that cause delays or contracts that get rejected. Analyzing this information, the company can make timely informed decisions to modify certain steps, add relevant fall-back and alternate clauses to the repository or avoid certain vendors. This can eventually help rid all the issues arising in the negotiations process and make the contract management process more intuitive, advanced, and fast.
Looking at the short term and long-term benefits of digitizing negotiations, we have a solid case for why implementing a robust CLM system for digitizing negotiations process should take a front seat in any organization. Negotiations stage has a direct bearing on the entire contract lifecycle and automating this process is sure to transform contract management for good.