Digital Contracting: Key Fundamentals and Features You Need to Know
What is Contract Automation?
Contract automation refers to the process of using technology to create, manage, approve, store, and track contracts without relying on manual work. Instead of drafting contracts from scratch, sending emails for approvals, and tracking expiration dates manually, contract automation software like ConvergePoint contract management software streamlines these steps within a structured workflow. The system handles contract requests, approvals, eSignatures, renewals, and obligations in one centralized platform.
Why is Contract Automation Useful?
Managing contracts manually often leads to delays, missed deadlines, and lost documents. Contract automation eliminates these roadblocks by keeping contracts organized, guiding users through approval workflows, and maintaining a full record of contract interactions.
Who can Benefit from Contract Automation?
Contract automation is valuable for any team that creates, reviews, or manages contracts, including:
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Legal Departments
Legal teams can significantly reduce contract review time by leveraging pre-approved templates, automated workflows, and clause libraries. This provides compliance with company policies while allowing attorneys to focus on high-value legal work instead of routine contract approvals.
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Procurement Teams
With contract automation, procurement professionals can streamline vendor agreements, from contract requests to approvals and negotiations. Automated workflows help reduce bottlenecks, ensure compliance and improve supplier relationships by accelerating contract turnaround times.
Also read: 5 Best Practices to Align Contract and Procurement Management Teams
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Sales Teams
Sales teams can close deals faster by generating standardized customer contracts in minutes. By integrating contract automation with CRM systems, sales representatives can create, send, and track agreements without waiting for legal intervention—accelerating the sales cycle and improving customer experience.
Also read: Aligning the Sales Department with Contract Management Processes
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HR Departments
HR teams handle numerous contracts, including employment agreements, non-disclosure agreements (NDAs), and benefits-related documents. Automating these processes ensures consistency, reduces administrative workload, and speeds up onboarding and compliance procedures for new hires.
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Finance Teams
Finance professionals need visibility into contract values, payment terms, and renewal dates to ensure accurate financial planning. Contract automation eliminates the reliance on spreadsheets, provides real-time insights, and reduces the risk of missed payments or unexpected renewals.
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IT & Compliance Teams
Managing contract security and regulatory compliance is crucial for IT and compliance teams. With centralized contract storage, role-based access controls, and automated audit trails, organizations can safeguard sensitive contract data, ensure adherence to industry regulations, and streamline internal audits.
Whether a business is managing supplier agreements, client contracts, or internal policies, automating the contract process helps teams stay organized and aligned.
What Problems Does Contract Automation Solve?
Without contract automation, organizations struggle with inefficiencies, compliance risks, and operational bottlenecks. Manual contract management often leads to errors, delays, and missed opportunities, negatively impacting business performance. Here are some of the key challenges that contract automation addresses:
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Lost Contracts
When contracts are scattered across emails, shared drives, or physical storage, tracking down the right document becomes time-consuming and frustrating. Important agreements can go missing, leading to compliance issues, financial losses, and strained business relationships. Contract automation centralizes all documents in a secure, searchable repository, ensuring contracts are never lost or misplaced.
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Slow Approval Cycles
Relying on email chains, paper-based approvals, or in-person meetings for contract sign-offs causes unnecessary delays. Teams waste valuable time waiting for signatures, which slows down deal closures, procurement processes, and vendor onboarding. Contract automation streamlines approvals through automated workflows, electronic signatures, and real-time notifications, significantly reducing turnaround time.
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Missed Deadlines
Tracking contract renewal dates, payment obligations, and key milestones manually often results in overlooked deadlines. Missed renewals can lead to financial penalties, service disruptions, or unwanted contract extensions. With automated reminders and alerts, organizations can proactively manage deadlines, ensuring timely renewals and compliance with contractual obligations.
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Compliance Risks
Storing contracts across multiple systems or manually tracking regulatory requirements makes it difficult to enforce compliance. Without a structured process, organizations risk non-compliance with industry regulations, leading to potential legal consequences and reputational damage. Contract automation ensures adherence to legal and internal policies by standardizing contract templates, maintaining detailed audit trails, and providing easy access to the latest contract versions.
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Version Confusion
When multiple stakeholders edit contracts without a centralized system, teams may work on outdated versions, leading to errors, miscommunications, and disputes. Version control issues can cause unnecessary rework and legal risks. Contract automation maintains a single source of truth, tracking changes in real time and ensuring that everyone works on the most up-to-date version of the contract.
By automating contract management, organizations can eliminate these common challenges, improve efficiency, and reduce risk. Whether it's securing contract data, accelerating approvals, or ensuring compliance, contract automation provides a structured, scalable solution for managing agreements effectively.
How to Automate Contract processes?
Automating contract process with ConvergePoint is straightforward and integrates seamlessly with Microsoft SharePoint:
1. Start with a Contract Request
- Users submit contract requests using a guided form.
- Requests include key details like contract type, parties involved, and approval workflow.
2. Use Pre-Approved Templates
- Contracts are generated from a library of templates to maintain consistency and reduce legal review time.
- Clause libraries allow users to select the pre-approved language to customize contracts.
3. Route for Approvals
- Automated workflows send contracts to the right people for review.
- Approvers receive notifications and can approve, reject, or request changes within the system.
4. Collect Digital Signatures
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- Contracts are sent for eSignature via DocuSign, Adobe Sign, or Dropbox Sign.
- Once signed, the system automatically saves the executed contract in the repository.
5. Store and Track Contracts
- Approved contracts are stored in a secure, searchable repository.
- Metadata tagging allows users to find contracts by type, status, or key dates.
6. Manage Renewals and Obligations
- Automated alerts notify users of upcoming renewals and required actions.
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Obligations are assigned to responsible parties with tracking features.
Best Practice Considerations at Each Phase
At each phase of the contract lifecycle, it is important to consider best practices in ensuring the success of contract management. Below, we explore key considerations for each phase to guide your process and ensure that no detail is overlooked.
Contract Request
- Should a request pass through a manager before making it to legal?
Passing the request to a manager reviews the request before legal provides that all necessary context and approval are in place for the legal team to proceed.
- Does the request contain all pertinent information?
A complete request should include details such as contract type, relevant dates, parties involved, and any special terms or conditions to prevent delays.
Contract Creation, Approval & Renewals
- What happens if a draft is rejected?
If a draft is rejected, feedback should be provided promptly, and revisions should be tracked clearly. The reason for rejection helps the drafter improve the document before resubmission.
- How do drafters know which version to use? How do they know when they’re needed?
Clear version control and tracking tools can help drafters identify the latest version. Automated notifications or task management systems can alert them when their input is required.
- How should they save supporting documents and discussions?
Supporting documents and discussions should be stored in a centralized system, ensuring they’re linked to the appropriate contract for easy reference and auditability.
- How do you keep track of renewals and obligations?
Renewals and obligations can be managed through automated reminders and dashboards, ensuring all critical milestones are met before deadlines.
- Does everyone know where to look for their contract?
A user-friendly document repository or centralized contract management system will ensure that all stakeholders know where to find the relevant contracts.
- Who has access to which contracts? When will contracts renew?
Access permissions should be clearly defined based on role, with alerts set for upcoming renewals to keep all stakeholders informed in advance.
- Will you know when an obligation is required?
Automated contract tracking systems should be in place to notify relevant parties when obligations need to be fulfilled, avoiding any compliance issues.
- How will you search and report on important information?
Using advanced search functions and customizable reporting tools will make it easier to locate key information quickly, ensuring efficient tracking and decision-making.
How Does ConvergePoint Contract Management Software Fit Your World?
Mid-Sized Businesses
- Mid-sized businesses will benefit from automating the entire lifecycle of contracts using your metadata for simplified searching.
Enterprise Sized Businesses
- Enterprise-sized businesses will benefit from automating the entire contract management lifecycle with advanced search functionality, while taking advantage of custom real-time dashboards and reporting with the use of important selected metadata.
Benefits of Using ConvergePoint Contract Management Software
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Complete and Accurate Requests: Ensure all pertinent data is included in requests and submissions.
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Efficiency Through Filtering: Filtering contract requests opens legal specialist time.
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Real-Time Status Visibility: Role-based dashboards load real-time status updates, preventing status calls.
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Task Management Automation: Automated task notifications ensure priorities are being met in the creation and effective contract stages.
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Centralized Communication: Workflow history and discussion boards allow all interactions to take place in one spot.
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Always Work on the Latest Version: Version history control ensures that you will always work on the latest document.
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Instant Information Access: Metadata searching and reporting allow you to find exactly what you need within seconds.
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Seamless Contract Migration: Quick migration allows you to manage existing contracts within days.
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Organized Contract Distribution: Dynamic publishing organizes your approved and active contracts for end users, while keeping supporting documents and amendments together.
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Controlled Access to Sensitive Contracts: Permission control makes sure contracts are seen by the right eyes.
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Cost-Effective Scalability: Scalable solution enables additional users without the additional fee.
Interested in implementing contract automation software in your business? Speak to our contract specialist about how ConvergePoint would work for your team with a personalized demo of features and use cases.
