In today’s competitive environment every business is looking for ways to improve their bottom line. How can you increase sales, reduce costs, streamline internal processes to improve efficiency? Have you considered the cost to your business of reviewing and approving contracts?
Teams, Versions, & Email
A recent study showed that 64% of companies say their contract approval process is causing deals to stall. If that is a sales agreement, is it possible that the delay impacts the current month, quarter or year because it slips past the target date? Does the delay result in a rush to close the deal before month / quarter / year end that may impact the potential profitability of the deal? If the agreement is to buy goods or services, is that delay impacting the ability of the company to expand capacity, have the required supplies to fill orders, delaying the deployment of critical systems that are expected to reduce costs and improve efficiency?
And while 64% of companies indicating the contract review process caused deals to stall, 66% considered it a problem and 21% considered it a big problem. In addition, a Harvard Business Review article stated that inefficient contracting causes firms to lose between 5% and 40% of the value of a given deal. An efficient contracting process can improve your bottom line.
What are the key factors that affect the review and approval process? From the survey, 52% of the respondents identified the inability to track tasks, deliverables and key events as the biggest challenge. This was followed by the approval process, workflow and reviewing (redlining).
Here are the top 3 issues that contribute to these challenges:
1 - More departments being involved in the review and approval process.
59% indicated Legal was the primary department involved. Beyond Legal, other departments involved included Sales (29%), Sales Operations (29%), Executive Team (31%) and other business units. With more departments and people involved, the complexity of tracking and aggregating everyone’s feedback becomes more complex. There is a need to have an automated approach to tracking the status of assigned tasks and efficiently aggregating feedback and approvals.
2 - The number of versions required before completing the review and approval process.
39% go through the process with only 1 or 2 versions. However, 32% require 3-4 versions and 29% require 5 or more versions. Keeping track of these and ensuring everyone is reviewing and/or approving the correct version is critical. Human nature can have the review process viewed as a necessary evil and an area that can create a level of frustration. As a recipient, if you have a 20+ page contract to review, you may be become frustrated if you find you have just reviewed the "previous" version of the contract and are now asked to review the "latest" version. In addition, many reviewers are frustrated by the requirement to review the entire agreement as it goes from version to version. You need to provide reviewers with the tools that ensure they have the most recent version and allow them to focus on the areas that have changed to improve their efficiency and reduce their frustration.
3 - 60% of companies use email to manage contracts.
Using email makes it difficult to track the status of tasks that have been assigned. The review process can take a serial approach that can slow down if one of the people involved is delayed. If the contract is sent to everyone at the same time a new set of challenges emerges. How does the owner of the document remember what suggested changes have come in from each reviewer (i.e. what happens if Sales suggests a change to a section that is different from the change suggested by Legal? When these are received as separate documents via email how does the owner of the document remember what each person said?) There is also the issue of ensuring all the relevant reviewers are aware of suggested changes being made by each reviewer regardless of a serial or parallel approach. How is this effectively accomplished so the suggested changes are effectively communicated and there is the ability for "in context" communication to take place. There is a need for an easy to use approach that allows reviewers and approvers to have a conversation, in context, on critical issues and know exactly what has changed.
Faster, Better & Secure Improves Bottom Line
How can you easily and efficiently address many of these issues? SavvyDox is a cloud-based solution that offers:
Automated tracking of all assigned tasks and due dates that provides a quick overview of what is on track and what requires attention and follow-up.
Simple and powerful distribution process that allows for a parallel workflow to improve efficiency.
Automated delivery of the latest version of the content being reviewed to ensure no one is reviewing something that is out of date.
Automated highlighting of changed pages from version to version to provide focus for reviews and improve a reviewer’s efficiency. In addition, we provide one click comparisons of any 2 versions of a document.
Delivery of comments in context, These can be shared with everyone so a conversation can take place, delivered just to select people (with the ability to change who is included based on the conversation contents). These alerts can be integrating with email and messaging systems so a reviewer can see a comment and with one click go to the exact spot in the document to see the comment in context and quickly respond. This improves communication and efficiency.
The owner of the document is the one making changes based on the comments provided. This allows the owner to see all comments delivered to them so they can make informed decisions on what changes need to be made, or they can reply to a comment to receive clarification before distributing a new version.
SavvyDox can be used as a standalone solution or become part of an integrated solution with your current CLM or CM solution to improve the efficiency of your contract review and approval process and improve your bottom line.