From eSigning to Smart Contract Management: 5-Step Plan
Unless carefully planned, all the value added at the contract negotiation and electronic signing stage disappears as soon as the executed contract gets randomly filed. Smart contract management in the post-signature stage is necessary to harness the benefits of contracts in an organization. We’ve condensed our best practice tips in this 5-step plan based on InvestCEE LegalTech Consultancy’s experience with digital contracting processes.
ZEFORT (=zero effort contract management) is an integral part of the legal technology toolkit selected by InvestCEE for our LegalTech Marketplace. We collaborate closely with the IT and customer team behind ZEFORT in order to help corporate clients link their preferred e-signature solutions with a smart digital archiving tool. This step-plan was originally prepared as a guest post for ZEFORT’s blog to inspire legal and business teams to improve their digital contract management with integrated solutions.
5-Step Plan for Digital Contract Management
Based on our experience in advising corporations in transitioning to digital contract management workflows, we have condensed our best practice tips into five recommended steps. Save this infographic for later use and scroll down for more detailed advice!
#1 Define post-signing priorities
Getting priorities right is the easiest if you are already aware of the most frustrating issues in your organization’s contracting process — think current status. Perhaps legal and business teams find it hard to locate contracts, keep track of contract versions, suppliers and commitments. Or they wish they had more control over contract spend and got enough notice for renewal or termination. Improving risk management and business decision making are also typical spot-on justifications for smarter post-signing contract management. What are your team’s priorities?
#2 Choose an intelligent contract management tool
While manual contract management may still be acceptable for organizations that only deal with a few contracts in a financial year, organizations with large contract volumes (reaching hundreds, thousands, or even more contracts in a year) typically face exponential increase in their contract failure rates.
Replacing manual contract management processes with digital contract management solutions is essential in order to:
increase productivity of legal and business teams,
increase revenues and savings,
reduce contractual risk,
access smart search and contract comparison functionalities,
ensure visibility and transparency of internal processes,
track contract status, performance deadlines, automated renewal clauses, and milestones, and
improve security of databases.
In addition to offering the above listed benefits, we’ve also found that intelligent contract management technology is often user-friendly and enables broad adoption by all users and stakeholders across an organization. On top of their smart contract management tool, we particularly value the flexibility and user support provided by team Zefort.
#3 Link your preferred e-Sign service with your document management system
One of the key learnings in 2020 was embedding eSignatures into the contract management process. Many of our clients realized that eSign services are a crucial element of the digital contracting lifecycle. Yet having all stakeholders and corporate signatories opt in for a given eSigning tool is only a fraction of the digital transformation efforts generally needed in organizations.
While eSignatures can cut send-to-sign time of contracts, they will not solve the post-signing challenges that organizations are often facing. So how about linking your team’s preferred eSign service with a smart contract database? How about automated contract archiving directly from your eSign service provider?
#4 Onboard your team & set their access rights
Often it is both legal and business (procurement, sales, HR, etc) teams who need to access an organization’s contract database — typically for different reasons and at various stages of the contracting lifecycle. No matter how diverse your team is, the goal is for everyone to find the contracts they need to perform their tasks in the organization.
Make sure that each team member has the right level of access to the contract database. When investing into a smart contract management tool, it is a good idea to review internal policies and contracting playbooks to set access rights for administrators, editors and viewers. In Zefort, organizations can manage access to contracts by creating binders (dedicated contract folders) and assigning users individually to binders. With permission rights, organizations can prevent contract security issues and sensitive data being accessed by unauthorized personnel.
#5 Upload your contracts & dive into contract data analytics
Adding contracts and structuring their contents (filtering relevant data, registering parties, deadlines, setting up automated notifications for follow-up actions, etc) is the heavy lifting part of the post-signing contract management job. The AI-assisted ZEFORT is the perfect technology to help solve this particular challenge — its technical architecture comes with REST APIs (software interfaces that allow data to flow between two different services), but you can upload traditional PDFs as well, or even mass import entire document archives.
Compatibility with a wide variety of eSignature services, contract upload automation, speed and accuracy are essential in post-signing contract management, yet remember: data analytics works best with human supervision. Smart contract management needs to be done right. Who from your team will be the champion of a smart new tool? Or will you consider external assistance to make the most of contract data analytics?
LegalTech should not be magic. Learning to use technology in legal work is key for a successful transition towards a digital legal department and value-added legal services. Our workshops help you get the most of your LegalTech investment.