The benefits of digitalising the contracting process in enterprise companies
As a legal professional in an enterprise organisation, you need to have time and space to focus on the tasks that make a difference. To make that possible, digitalisation is your best friend. A digitalised workflow allows you to spend less time on those repetitive tasks that create little value – such as managing contracts.
Even if you have a dedicated legal ops professional that is responsible for the digitalisation and streamlining of processes, the task can still feel daunting. If that is how you feel right now, don’t fret! In this post, we will provide insights and ideas that help lower the threshold to embark on the road toward digitalisation.
Don’t let manual work and complex processes slow you down
Legal departments have a reputation for being traditionalist (even borderline conservative) when it comes to processes and workflows. This might be especially true for enterprises, where processes involve many people and tend to take time, and where the legal team lacks the tools to work efficiently and with compliance.
The workload is high, time is scarce, and strategic matters are not always a priority. Sound familiar? Time-consuming and repetitive, but not necessarily value-bringing tasks, steal much of legal’s time.
If you don’t have the time to lift your head and look at strategic matters, it is easy to get stuck in the old ways of working or, even worse, get overworked. The good news is that even the slightest improvement on process efficiency and time spent on routine tasks can have a big impact on your day-to-day work.
The easiest way to get started is to rethink your processes and to digitalise them. Digital tools can be your best friend and enable the legal team to expand the value they bring to the business. However, there is still hesitation as to what technology to adapt, and what consequences it can have for legal professionals.
A common bottleneck in enterprises, and a good place to start, is the contract lifecycle and workflows connected to it.
Four great gains of digitalising contracting
For many working in legal, the setting is familiar: old and new contract templates are used without any streamlined process or centralised control, contracts are stored in an archive (digital or physical) that nobody understands the structure of, and post-its or calendar invites are commonly used as reminders of important contract milestones.
Here are some aspects of how a contract lifecycle management (CLM) software can ease the workload for an enterprise legal team while tending to the full lifecycle of all contracts.
1. Manage complex contract workflows with ease
The legal needs are always greater and more complex for bigger enterprises. In general, there are more clients, more contracts, more stakeholders, more negotiations, and more complex workflows behind each type of contract.
The average enterprise manages large volumes of contracts every month – something that requires structure, organisation, and control.
Depending on the organisational structure, it might feel a bit overwhelming and sometimes even out of control. Responsibilities become diffuse: when everyone is responsible, no one is responsible. Often, it is not totally clear who is in charge of ensuring that contracts and their corresponding templates are compliant and up-to-date.
This does not need to be the case, though. It all comes down to finding a tool that enables you to give the right conditions and set the right frameworks. Many digital tools streamline legal workflows, remind you of important events, and make sure that at least one person is clearly responsible for each task.
A CLM platform can help you keep track of things by organising everything related to contracting in one place. Your documents are tagged and stored in a safe place, and are always easy to find thanks to metadata.
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2. Automate repetitive contracting tasks (and keep control)
The legal department of large enterprises normally deals with complex workflows and processes, but also needs to execute repetitive and low-complex tasks. Many of these tasks faced by the legal department are also recurrent.
Take employee contracts as an example. There will always be people joining and leaving the company. If the workflow for these contracts were automated, or even independently handled by HR, legal would not necessarily have to be involved in each of those processes.
3. Create a collaborative contracting culture
Contracting is central to several departments and a smooth process is likely to make a big positive impact on internal stakeholders. This insight and common understanding is a good starting point for a common investment in digital solutions.
In larger corporations, stakeholders with their particular interests want to weigh in on any project or initiative that could potentially affect their department. Finance, HR, or IT, will want to have their say.
Even though this might slow the purchasing process down and feel frustrating, it is a great opportunity to evaluate and find solutions that can have positive effects on many aspects of the company. See it as an opportunity to break down silos and strengthen cross-functional collaboration.
Legal can create templates, give access to other employees, set the rules and workflows for contracting, and then other departments take over for completion of the contracts. You create a self-serving, efficient, and compliant organisation by encouraging a collaborative contracting culture.
4. Manage the legal spending
According to the KPMG Global Legal Department Benchmarking Survey, 80% say that the KPI they use to assess the performance of the legal department is the cost: the total legal spending and cost relative to business size.
The legal budget will be greater in an enterprise than in a small company. But in a large organisation with many employees, there are also many more lay-outs: headcount, contract value leakage, external spending, and penalties sum up to great amounts.
With automated contracting and compliant contract templates, you can in essence completely take out the factors of contract value leakage and penalties.
Get started by creating a digitalisation strategy and roadmap
The focus on implementing legal software, and also on hiring legal operations professionals to manage and maximise the value of these, tend to increase with the size of an organisation. All companies benefit from a more efficient legal department, but large enterprises will especially notice the difference.
In order to free up more time and space to focus on high-level strategic legal tasks, the first thing you will want to do is to audit the current technological state. Find out what works well and what should be improved. Don’t rush this part – it is vital for the continued process.
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Creating a digital roadmapDownload checklist
Once you have mapped out what needs to be improved, you will translate your answers into a timeline with long-term and short-term goals, and ping down possible solutions. Do not forget to involve all stakeholders early in the process.