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, e-signature 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, adopting e-signatures with digital signature technology for online contract signing has been a game-changer for many businesses, enabling them to cut contract cycle times and increase efficiency.
Pressure to transact faster, more efficiently and 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 e-signature plug-ins for popular CRM and CPQ applications, are removing final barriers to the adoption of a fully electronic contracting process. Soon, e-signatures will replace pen and paper as the standard method to execute contracts.
OneSpan Sign processes more e-contracts than many other e-signature tools and helps organizations sign documents, eliminate hassle, and close deals. In this white paper, we share the top benefits of e-contracting with e-signatures, as articulated by customers in real estate, healthcare, retail sales, consulting and government.
What is contract management? contract administration? contract lifecycle 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, however, refers to the tasks and logistics that occur after the contract is signed. Finally, there is another associated term called contract lifecycle management (CLM), which includes both phases of the contract lifecycle, management and administration.
In this informative guide, we’ll explore the processes, best practices, and nuances related to the management of contracts to better distinguish it from contract administration.
Why contract management matters
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 that the terms of the contract are upheld, all contractual obligations are met, and should a contract’s terms need changing over time the team can negotiate modifications. A consenting agreement does not count for much unless each party is willing to follow-through with the agreement. This is why contract management matters. What’s more, depending upon 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: contract management customer stories
Research from Aberdeen shows that sales organizations that have adopted e-signatures grow company revenue at a 69% greater rate, year-over-year, compared to non-users. 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 Contracting Experience:
IBM is one of the largest, oldest and most trusted technology brands in the world. 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 in 2015, 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 e-signatures, making the signing process a breeze
To implement e-signatures, 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. IBM’s global sales force prepares contracting documents on an iPad and in a few taps, send them out for e-signature. The IBM e-sign process is either 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 been using handwritten e-signatures to accelerate approvals on purchase orders, invoices and service contracts. Prior to e-signatures, it was difficult to get timely sign-offs from hospital managers, who are often in meetings or offsite. This delayed 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:
Global Coal, provider of the world’s leading coal trading platform for seaborne thermal coal, improved access to its standard coal trading agreement by integrating e-signatures with its web portal. This made it easier for customers to sign the product licensing agreement and purchase contract. “Given the nature of our business, we wanted an e-signature solution that provided us the ability to both audit the signing process and produce irrefutable evidence of signing intent,” says CEO Eoghan Cunningham.
By capturing the online signing process from start to finish, OneSpan Sign creates an audit trail that provides much stronger legal evidence than is possible with pen and paper. Electronic evidence is a primary driver for many regulated organizations, as well as businesses like insurance and real estate, where there may be a higher risk of litigation. For example, IPM’s tonsofrentals.com, the largest property manager and marketer of single family rental homes in Western North Carolina and South Carolina, needed an e-signature solution that would provide electronic evidence to ensure that the company and its users complied with e-commerce laws and were protected during any court proceedings or evictions.
Delays in the contracting process lengthen time-to-revenue, put critical projects on hold, and open the door to the competition, compromising the sale. “In the real estate industry, if you don’t move quickly enough, there is always someone waiting around the corner that will move in to seal the deal,” said Robert Baer, VP of property management company IPM. “By deploying OneSpan Sign, we are able to make the process of leasing property even more seamless and fast for our customers."
Global strategy and technology consulting firm Booz Allen Hamilton was also facing a long turnaround time on approvals, ultimately jeopardizing sales. By adopting an electronic contract management system with e-signature and e-storage capabilities, Booz Allen was able to accelerate the contract cycle and better manage the workload associated with supporting 800 sub-contractors and 13,000 transactions a year. Subcontract administrators continue to develop subcontracts in Microsoft Word. When an administrator is ready to initiate an e-sign process, they log into the e-signature portal, upload the contracts and enter information about the signers. A notification is then emailed to signers, inviting them to log in to the portal and execute the agreements. Signed subcontracts can be downloaded by the subcontractor and stored in the CMS of their choice, while Booz Allen maintains contracts in Microsoft SharePoint.
Save Time and Money:
The State of Vermont’s 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.
Likewise, a pharmaceutical distributor is using the OneSpan Sign cloud service to automate ordering of narcotics and controlled substances from its 30 pharmaceutical manufacturers. Authorized signers use OneSpan Sign to click-to-sign and electronically send the purchase orders to manufacturers. This eliminates $8 - $10 of courier fees per P.O. A top bank recently implemented the OneSpan Sign on-premises platform for customer-facing transactions. However, e-signatures have become so popular that the bank is seeing demand from internal departments and teams that also want to use e-signatures. Within the bank’s HR department, for example, a single employee is responsible for sourcing and negotiating all training contracts. Maximizing that employee’s productivity was key – but any automation had to be done without burdening the IT department. The employee subscribed to the OneSpan Sign cloud service and was able to upload and prepare documents for e-signature within minutes. By eliminating paper processing, the employee now saves an average of 10 weeks annually.
Stages of 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 contract management involves planning, scoping, and a realistic assessment of your contract management team resources, skills, and pain points. This will help inform decisions later in the process. Does your team have an electronic signature software to upload an image of your signature, or will customers be signing documents with a handwritten signature? Can your 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, but the ability to automate processes using contract management software will enable your team to manage many more agreements and deadlines with greater efficiency and fewer errors, thereby enabling your sales teams and procurement teams to pursue larger and more contracts.
- Pre-contract stage: Pre-contract stage represents that 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 e-signatures 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 the terms of the contract are upheld by both parties. The defined work is to be completed and deliverables are to be delivered. This is another key opportunity for contract management software to alleviate the typically logistical pain points to 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. For some agreements, this will not be a factor 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 work is not quite over for the contract management team. This phase involves a final check to ensure contract terms were met, following through with the organizations 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.
Contract management best practices
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 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.
- Define and track KPIs: By setting and measuring your contract management KPIs, you can better identify bottlenecks and streamline process. Furthermore, reporting on these KPIs can help keep internal stakeholders and executives abreast of 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 track this as well. 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. If you operate in highly regulated industries, such as financial services, insurance, or healthcare, it is vital that you and your legal department remain informed of upcoming regulatory changes.
Top 3 steps to take now to improve 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 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 contract management frameworks: Using the findings of your audit, build a framework for the existing 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 e-signing 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 e-signature solution can scale and adapt to their unique requirements. You can get started with e-contracting by using e-signatures in any of the following ways:
The Beginner's Guide to Electronic Signatures
This essential briefing introduces important legal concepts and key considerations when creating digital business processes with e-signatures.Download Now