Organizations across all industries rely on contracts and written agreements to conduct business, increase control, and mitigate risk. From purchase orders and sales contracts to retail finance contracting, legally binding contracts of all kinds are routinely signed in electronic form, and their legality has even been challenged and stood up in court. Industries like financial services, healthcare, insurance, law, manufacturing and government have all found ways to integrate electronic signatures into the unique demands of their business processes and channels.
Furthermore, eSignature laws such as the Electronic Signatures in Global and National Commerce Act (ESIGN Act) and the Uniform Electronic Transactions Act (UETA) in US federal law, have been passed around the world to govern their use. In fact, eSignature legality has enabled businesses and organizations to adopt eSignatures with digital signature technology for online contract signing. This has been a game-changer for many businesses, enabling them to cut contract cycle times and increase efficiency.
Pressure to transact faster and more efficiently from the convenience of mobile devices is accelerating the adoption of e-contracting and paperless solutions. Customer expectations, combined with the accessibility of cloud-based eSignature plug-ins for popular CRM and CPQ applications, are removing final barriers to the adoption of a fully electronic contracting process. Soon, eSignatures will replace pen and paper as the standard contract execution method.
In this informative guide, we’ll explore the processes, best practices, and nuances related to online contract management to better distinguish it from contract administration.
OneSpan Sign processes more e-contracts than many other eSignature tools and helps organizations sign documents, eliminate hassle, and close deals. Here, you’ll learn the top benefits of e-contracting with eSignatures, as articulated by businesses and organizations in real estate, healthcare, sales, consulting, and government.
Understanding contract lifecycle: From contract administration to management
Contract management and contract administration each refer to specific portions of the contract agreement process, but the distinctions between them are often blurred.
At a high level:
- Contract administration refers to the tasks and logistics that occur before the contract is signed and completed, up to and including the signing ceremony itself.
- Contract management refers to the tasks and logistics that occur after the contract is signed.
- Another associated term is contract lifecycle management (CLM), which includes both phases of the contract lifecycle: management and administration.
The contract management process is more than archiving and storing copies of a contract for later reference. During the contract management phase, a contract management team is responsible for ensuring contract terms are upheld and all contractual obligations are met. Should a contract’s terms change over time, the team can negotiate modifications.
A consenting agreement only counts for a little if each party is willing to follow through with the agreement. This is why contract management matters. What’s more, depending on the nature of your contract, the contract managers have a significant customer service role to play by ensuring that, for example, a service level agreement is met.
How eSign improves the contracting process: Electronic contract management customer stories
"The sales department is likely to benefit the most from eSignature solutions. The need for sales staff to deal with paper adversely impacts revenue, customer engagement and sales department productivity," says Hugo Moreno, editorial director at Forbes Insights.
Less time lost to paper-based contracting processes affords more time to secure additional revenue, above and beyond the direct benefits to the sales organization.
However, electronic signatures deliver value on many fronts, such as the convenience of a drag-and-drop electronic document builder to add signature fields to contracts, PDFs, Word documents, and other documents. Explore these customer stories and click the links to read the full case study and learn more:
Transform the client electronic contracting experience
IBM is one of the world's largest, oldest, and most trusted technology brands. Despite a 100-year history of innovation, the company’s contracting process was complex and involved a lot of manual work. Customer experience was affected, earning the tech giant the reputation of being difficult to do business with.
That’s why IBM began transforming the client contracting experience with electronic signatures. Pulling from three separate organizations within the company, legal, sales transformation, and operations, an agile team assembled to identify ways to simplify contracts and agreements. The impressive results:
- Radically simplified contracts (from 30 pages down to 4)
- Introduction of client-favorable provisos based on the most negotiated terms
- Alignment of contract decision-making to client teams, increasing deal velocity
- Implementation of eSignatures, making the signing process a breeze
To implement eSignatures, IBM worked with OneSpan to deliver a corporate-branded (white-labeled) app that was put into the hands of IBM sellers worldwide. The responsive app is simple for senders. In a few taps, IBM’s global sales force prepares contracting documents on an iPad and sends them out for eSignature.
The IBM eSign process is face-to-face with the client, remote, or a combination of both. In some cases, the IBM seller meets with a client and captures the first of a series of signatures on the iPad, and the document is then routed to a second signer who may sign on their smartphone.
Accelerate delivery of goods and services
Le Grand Hôpital de Charleroi is a Belgian hospital complex that spans five different sites. Since 2011, the hospital’s IT department has used handwritten eSignatures to accelerate approvals on purchase orders, invoices, and service contracts. Prior to eSignatures, it was challenging to get timely sign-offs from hospital managers, who are often in meetings or offsite–delaying the delivery of urgent supplies.
The IT team knew that if they could accelerate the process, the goods they needed would be delivered sooner and put to use faster. “Now, I get an email on my smartphone requesting I sign a document, and I e-sign immediately,” says Nicolas Depasse, the hospital’s assistant director of IT.
Audit the signing process and capture evidence
Nasa's JPL has completely transformed its contracting process. In their first months using eSignatures and based on the first 5,000 eSigned contracts, the team has already seen significant productivity benefits. By digitizing contracts, staff save considerable time during the signing process and when any document needs to be revised.
OneSpan Sign stands out from competitors due to the strength of its audit trail. The audit trail captures a detailed record of all activity during the signing ceremony, providing exceptional security. This feature simplifies compliance with regulations and makes it easy to reproduce precisely what happened during the signing process.
By capturing the online signing process from start to finish, OneSpan Sign creates an audit trail that provides much more substantial legal evidence than is possible with pen and paper. Electronic evidence is a primary driver for many regulated organizations and businesses like insurance and real estate, where there may be a higher risk of litigation.
Enable remote, paperless signing
Delays in the contracting process lengthen time-to-revenue, put critical projects on hold – and in the case of sales contracts, open the door to the competition, compromising the sale. A digital contract process also reduces manual effort and people-hours, connects remote participants, and enables those working from home.
Michigan State recently launched an eSignature solution from OneSpan. The solution was found in March 2020. The timing coincided with the remote work requirements that arose due to the coronavirus pandemic. With the pandemic, paper-based processes became impractical.
“Remote work meant that people stopped getting the internal mail at their physical address,” says Richard DeMello, the eSignature administrator with the Michigan Department of Technology, Management and Budget. “This was a new challenge that was added onto the situation that we really didn’t see coming.”
He initially organized multiple demonstrations to showcase the ease of use of eSigning to increase employee buy-in and comfort with the technology. Michigan also introduced virtual training sessions for new users, offered 15- and 30-minute blocks, and established a help desk to assist with issues.
Save time and money
For one US state, their Department of Information and Innovation (DII) manages the delivery of IT products and services to all of the state’s government departments. The DII signs 240 vendor contracts monthly. Each contract is circulated for review, negotiation, revisions, completion and signature among legal staff, employees, executives and their private sector counterparts. However, because all of this now takes place digitally, the $30 round-trip courier fee per contract to and from the vendor has been eliminated, resulting in significant cost savings.
Similarly, a top bank recently implemented OneSpan Sign. While their first use of eSignature was for customer-facing transactions, the bank’s internal departments and teams also wanted to use eSignatures.
For example, a single employee is responsible for sourcing and negotiating all training contracts within the bank's HR department. Maximizing employees' productivity was vital, but automation had to be done without burdening the IT department. The employee subscribed to the OneSpan Sign cloud service and could upload and prepare documents for eSignature within minutes. By eliminating paper processing, the employee now saves an average of 10 weeks annually.
Stages of electronic contract management
In the typical contract management process, there are seven steps designed to help your organization meet contract requirements:
- Planning stage: The initial stage of electronic contract management involves planning, scoping, and a realistic assessment of your contract management team’s resources, skills, and pain points. This will help inform decisions later in the process. Does your team have electronic signature software to upload an image of your signature, or will customers be signing documents with a handwritten signature? Can customers respond to your signature request using their mobile phone? What authentication factors can you enforce?
- Implementation stage: Once your plan and assessment are complete, you can progress to the implementation stage, which involves utilizing and deploying whatever systems and tools are required to manage your pool of contracts. If your contract quantity is small, your team may be capable of leveraging manual solutions like Microsoft Excel spreadsheets, shared drives, and calendars. Still the ability to automate processes using electronic contract management software will enable your team to manage many more agreements and deadlines with greater efficiency and fewer errors, thereby enabling sales teams and procurement teams to pursue larger contracts and more contracts.
- Pre-contract stage: Pre-contract stage represents the last overlap between your contract management team and your contract administration team. At this point, your contract administrators are finalizing terms and preparing to apply online eSignatures or other forms of sealing an agreement. The contract administration and contract management teams should embrace a collaborative posture to establish a clear understanding of the agreement’s specifics between the two teams. This will prove valuable as your contract management team takes over in the next phase.
- Handover stage: The account, signed contract, and obligations are transferred on to the contract management team once the contract is formally signed. It is wise at this stage to have dedicated meetings between your teams to ensure a complete understanding and eliminate the risk of oversights.
- Contract stage: The contract management team can now work to ensure both parties uphold the contract terms. The defined work is to be completed and deliverables delivered. This is another key opportunity for electronic contract management software to alleviate the typically logistical pain points of online contract management. Automated alerts, notifications, templates, and custom reporting will inform your team of upcoming deadlines, termination windows, and other salient dates.
- Pre-renewal stage: When approaching the end of the period of work defined in the contract, the two agreeing parties must decide whether to renew or extend the contract. This will not be a factor for some agreements due to the finite scope of work; others could require contract renewal for an ongoing working relationship. The contract itself will often define the contract negotiation period, and the contract management team must be ready to facilitate that process.
- Post-contract stage: When the contract period is complete, the contract management team's work is still ongoing. This phase involves a final check to ensure contract terms were met, following through with the organization's archiving process, and finally settling any outstanding invoices. This is also an opportunity to conduct a post-mortem on the full contract lifecycle from contract creation to completion to understand the successes and challenges encountered on the project.
Online contract management best practices
Online contract management is an open-ended challenge that can be approached in a variety of ways, and there are numerous technologies and tools available to help ensure a successful process. Explore these seven best practices below:
- Unified electronic contract management: In short, keep all of your contracts in one location where your team can quickly and easily find necessary dates, contacts, and other details. Disorganized archive systems can create time-consuming bottlenecks. For high-value contracts, consider immutable blockchain storage that is fully integrated with your eSignature solution.
- Define and track KPIs: By setting and measuring your contract management KPIs, you can better identify bottlenecks and streamline processes. Furthermore, reporting on these KPIs can help keep internal stakeholders and executives up-to-date on the performance of your contract management team.
- Security and access: A contract management solution will have the functionality to help you balance the security and access needs of the contract. By allowing access only to select members of the legal and contract management team, you can ensure each member can fulfill their role without incurring undue risk.
- Track contract approval time: This can and should be a KPI for your contract administration team, but the contract management team should also track this. The faster a contract can move through the approval process, the faster a company can collect revenue and value from the agreement. Furthermore, this will give your team a high-level view of the full contract life cycle and help identify areas where efficiencies can be found in the approval workflows and elsewhere.
- Regular compliance reviews: Meet with your legal team to discuss changing regulations and coordinate on changing policies to align better with legal requirements. You and your legal department must remain informed of upcoming regulatory changes if you operate in highly regulated industries, such as financial services, insurance, or healthcare.
Top 3 steps to take now to improve online contract management
Building teams and processes takes time; and along the way, the company still needs to conduct business and generate revenue. While exploring ways to improve your online contract management processes, here are three quick-win strategies to yield immediate results:
- Contract audit: Take an inventory of your processes, assets, tools, workforce, and stakeholders to gain a complete understanding of the existing situation.
- Formal electronic contract management frameworks: Using the findings of your audit, build a framework for the existing online contract management process and write out what occurs at each step, who is involved, and how long steps take.
- Leverage technology: At this stage, your process is mapped. Explore technology solutions that can alleviate the bottlenecks identified in your framework and help facilitate new contracts, complex contracts, and strengthen business relationships.
Flexible eSigning pricing plans to get started
Electronic signature solutions are available in many different ways. This flexibility means organizations of any size can benefit from electronic contracting processes and are also able to ensure the eSignature solution can scale and adapt to their unique requirements. You can get started with e-contracting by using eSignatures in any of the following ways:
- Professional Plan for ad hoc signing and rapid deployment
- Enterprise Plan for complex, integrated use cases
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