Most companies take anywhere from 30-60 days to process a contract from creation to execution. Each day a contract gets bottlenecked by manual processes is another day of lost revenue. These manual contract processes not only hinder the sales cycle, but they’re also unscalable and error-prone. That’s why more companies are adopting contract management tools to automate the most laborious parts of the process and manage risk. But when evaluating tools for your business, what capabilities should you look for? Here are five must-have capabilities to consider.
1. Machine Learning
A contract management tool with machine learning identifies key terms and clauses so you don’t have to. This accelerates the review and negotiation process while also helping legal experts manage risk. Look for a platform that offers standard machine learning models and allows you to create custom models, so you can track data unique to your contract types and business.
Why it’s a must-have: You just received a 100-page customer contract and need to quickly review it. How will machine learning help? Simply import the agreement into your contract management tool and let the machine learning get to work. It will instantly identify critical terms and clauses—cutting your review time in half and revealing opportunities for negotiation.
2. Searchable Contract Repository (A key contract management tool)
An AI-powered searchable repository will store your agreements and help you search valuable data within and across agreements. Look for a repository with high-performing search functionality. You want the ability to search terms and clauses, compare terms between contracts, and conduct advanced searches for reporting—all in one place.
Why it’s a must-have: You need to determine which agreements are expiring in preparation for a new fiscal year. Use your searchable repository to find which agreements are expiring and refine the data to include key financial terms, like payment terms or billing frequency. In just a few clicks, you can share valuable data with your sales team to help them re-negotiate better terms.
3. Contract Creation Wizard
Just like a Turbo Tax questionnaire guides you through tax filings, a contract creation wizard guides you through new contract generation. Business users can efficiently generate self-service contracts while the legal department governs the process—creating a balance between speed and compliance.
Why it’s a must-have: Your newest account manager needs to create a contract for a target account but is unfamiliar with your contract templates and process. Luckily, a contract creation wizard enables him/her to quickly generate a company-approved agreement. This self-service capability not only streamlines the process for the account manager, but it also helps the legal department ensure compliance and reduce risk.
4. Favorability Rating and Approval Workflows
A contract management tool with favorability ratings and approval workflows is essential to eliminating bottlenecks. Look for the ability to set favorability ratings for specific terms and clauses, regardless if it’s your paper or third-party paper. When terms are unfavorable, the system will trigger an automated approval workflow, notifying specific stakeholders to approve or reject the identified terms. This automation calls the right teams to action at the right time.
Why it’s a must-have: You’re beginning vendor negotiations for an MSA and import the vendor agreement into your contract management platform. Your system triggers an approval workflow since the vendor’s payment term and governing law state are unfavorable. This automatically routes an approval request to your CFO and Chief Legal Officer, accelerating the negotiation process and maintaining a clear audit trail.
Since most eSignature tools charge fees per document or envelope, you ideally want a contract management tool with unlimited eSignatures. This offers scalability, convenience, and security, all in one platform without incremental cost. You’ll no longer need to rely on the manual process of printing contracts to sign, scan, and return them. Plus, you can securely e-sign contracts from multiple devices—like your phone, desktop, tablet, or laptop—and maintain a clear audit trail.
Why it’s a must-have: You’re traveling for business and are notified that a contract is ready for signature. Since this notification is from your contract management platform, you can rest assured knowing the contract made it through your firm’s required approval workflow. Using your mobile device, you securely e-sign the final contract without any delay.
Exploring Contract Management Tools
While there are countless contract management tools to choose from, few provide end-to-end capabilities that transform your contract process from a cost center to a value center. At IntelAgree, we’re on a mission to accelerate contract management so you can do impactful work, not busy work. Ready to get started? Schedule a demo today.