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While money may be the blood of a company, contracts are definitely its bones: They are the structure that keeps it alive so that the money can flow through. A company’s greatest sources of value — its relationships and its assets — are often stored in contracts. That is why in-house lawyers put so much time, thought, energy, and resources into creating, negotiating, managing, and interpreting them. Whether in sales, vendor initiatives, business development, or other strategic initiatives, contracts form the backbone of any healthy company.
Over the past two decades, cloud technologies have completely transformed how we work. In the process, nimble web-based apps with per-user pricing models and low or no up-front costs have become a norm across other functions. So why do we still negotiate contracts like it’s 1991?
We still draft contracts in MS Word, email them to relevant stakeholders, collect everyone’s revisions, reconcile all revisions into a single document, email the updated version around, and then… repeat the process. Then we struggle with long negotiation cycles, a lack of visibility, and poor process control and compliance. This whole process is like riding a horse and buggy in the age of self-driving cars.
So why modernize your contract negotiation and management process?
1. Efficiency to Increase Your Impact
Today, contract negotiations require a lot of manual, error-prone, clerical work. Sifting through emails and reconciling different revisions into a single document results in longer negotiation cycles, and a protracted negotiation process always leads to a higher risk of losing the deal. Modernizing contract negotiation and management will allow your company to devote more high-value resources to core business functions, like strategic thinking.
2. Visibility to Improve Relationships Across the Company
How long does it take you to answer basic questions for your boss or coworkers about your company? For example, how long will it take for a particular contract to close? How much revenue are we going to book this month? What percentage of contracts include non-standard terms? That is just a start; you can imagine an infinite number of other questions that would be helpful to know the answers to.
With today’s processes, it’s all but impossible to have a certain answer for even these basic questions. What if you wanted to make your contract process 10 percent more efficient? Where would you even begin to have that conversation? Being able to have these intelligent conversations about contracts is not just a luxury; it is increasingly part of normal business conversation.
3. Process Control for Compliance and Risk Management
How can you assure compliance and maintain a robust contracting process if your people are still emailing static documents to each other and to third parties, the same way they did 10 or 20 years ago? Manually checking each contract and cataloging non-standard terms, renewal dates, and other critical information is a mistake-rich exercise because humans make mistakes. Especially, as you know, when they are reading a long contract after a long contract, their eyes glaze over, and their brains are not engaged.
Adopting a robust cloud contract negotiation and management solution will allow you to easily define, enforce, and audit compliance with your company’s official contracting processes. In other words, you will manage risks better, more efficiently, and more systematically.
Once upon a time, cloud contract negotiation and management solutions were the way of the future. We fantasized about alternatives to scrolling through document after document, copying-and-pasting generic terms, printing, signing, and scanning, and then doing it all again when your partner inevitably changes their mind at the last minute. It was once a luxury.
But what was once the way of the future is now a reality. In fact, it’s not just the way of the present — it’s necessary to keep up with modern business expectations. Future contractual partners know what’s possible and will expect it. With a broader range of information available, people want answers. Doing things the old-fashioned way isn’t just slow, inefficient, and annoying. It’s harmful to your business.
Whether you adapt or not, every field incorporates technologies as they come. It’s up to you whether to keep up.
Olga V. Mack is the CEO of Parley Pro, a next-generation contract management company that has pioneered online negotiation technology. Olga embraces legal innovation and had dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor, and entrepreneur. Olga founded the Women Serve on Boards movement that advocates for women to participate on corporate boards of Fortune 500 companies. Olga also co-founded SunLaw, an organization dedicated to preparing women in-house attorneys to become general counsels and legal leaders, and WISE to help female law firm partners become rainmakers. She authored Get on Board: Earning Your Ticket to a Corporate Board Seat and Fundamentals of Smart Contract Security. You can email Olga at olga@olgamack.com or follow her on Twitter @olgavmack.