Following my last blog about how contract management services are embracing digital, a very clever commenter noted that although it is clear how companies are approaching digital and contract management, I had failed to express why they are evolving these processes and technology. Therefore, I wanted to make sure I explained not just what companies are doing, but also the associated benefits to their choices. Because in 2017, very few companies make changes just for fun.
So in honor of the “rule of three,” here are three great benefits your company could receive from embracing digital in contract management:
It may seem perfunctory at this point, but a digital solution will result in cost savings. If we can make contracting a model, rule-driven activity so that high-priced lawyers and experts deal uniquely with exceptions, we will absolutely save money. If we can make invoice reconciliation and verification an automated task, it will enable people to focus on other more valuable tasks. But it’s not just “cost” savings – it’s time savings. If you were born when disco existed, you probably remember what it was like going to the airport where everyone had to get their boarding card from the ticket counter, or when everyone had to use a clerk to checkout from the supermarket instead of using self-service machines. Besides being annoying, the process was terribly inefficient and a lot of time was wasted on waiting in line.
With self-serve contracting or automated actions in a digital world, we save both money and time. And as Benjamin Franklin once said (fun fact warning!), “Time is money.”
2. Consistency and Control
100 smart people will have at least 200 opinions. That is great if you are brainstorming, creating a new product, solving a problem, or doing something else that requires high brain function. BUT opinions have their limitations, particularly when organizations are trying to create a standard or make a prediction. How is a contract interpreted? Leave that to the specialist—for the most part. Was there a failure or a breach and what’s the potential remedy or penalty? That is a mathematics question—let the machines decipher it. What often times happens in contract management is that people insert subjectivity too early. Subjectivity and “art” make sense once the facts are clear and we can use style and relationship to affect a situation. But if we automate and adopt a digital transformation, we can get the facts clear first and get creative second. So if Woody Allen was right when he said that 80% of life if just showing up, then automation and digital makes sure we show up at the right time.
3. Value Creation
Last, but not least, we have value creation. We can save time and money and create a consistent worldview that allows intelligence channels to interact at the right time. And if this isn’t a valuable asset for your company, I’m not sure what is. By going through a digital transformation, a company can create an asset within itself that affects all the parts of the business, all of which need contracts.
Hopefully, this answers the question posed in reference to my blog. But more importantly, I hope this better explains “why” companies should begin or continue on their journey to digital. I welcome additional questions and comments and if there’s another aspect of contract management that you’d like to know more about, feel free to contact me directly.