Companies are under significant pressure to digitally transform their business processes to increase visibility, continuity, and remote operations, and contract negotiation is no exception.
The average cost of processing and reviewing a negotiated contract continues to rise and can range from $6,900 for a simple contract to more than $49,000USD for complex agreements. This expense is due to the sheer number of people needed to complete the process. Negotiating even something simple can involve multiple parties, several back and forth emails, and tracked changes inefficiencies and inaccuracies, as well as a limited view into who at the third-party is involved in the negotiations and at what stage.
With more people working on cross-functional teams and remote collaboration, more agility and visibility into the contract review and negotiation process is required, and anything that makes the process of reviewing and negotiating contracts easier, faster, and more secure is a win-win for all parties involved.
Even in our pre-pandemic world, contract negotiations had a tendency to be complicated and manual. First, you need to get the agreement reviewed and approved internally. Even with everyone in the office, that likely involved attaching and emailing to one or more internal parties. Given everyone’s workload, it likely would get lost in the shuffle from time to time requiring someone walk down the hall or pick up the phone to remind the Reviewer that it needed to be, well, reviewed. Then, once everyone agrees internally, now it has to be sent to the counterparty for review and approval. Chances are, they will have a lot of comments, questions, and changes they want to make. This involves more emailing back and forth, sending around different versions of the document, and trying to keep up with EVERYONE’s changes. It’s frankly, a high headache and logistical nightmare. Now, with most people still working remotely, not much has changed except the inability to walk down the hall and rattle someone’s cage about needing to look at a contract. There has to be a better way.
It’s Time to Digitally Transform the Way We Collaborate and Negotiate
Companies are under significant pressure to digitally transform their business processes to increase visibility, continuity, and remote operations, and contract negotiation is no exception.
The solution is to collaborate and negotiate contracts with real-time capabilities that allow frictionless contract negotiation, enabling internal and third-parties to simultaneously review, approve, and mark-up contracts in a secure way, on the devices that they are working with now. In addition to making the entire process easier, real-time collaboration tools capture all edits and comments throughout the negotiation process. This provides a complete history of the engagement process, as well as an audit trail, to help manage risk. Approvals are also easier as all collaborators can approve an agreement with a single click. And, it completely eliminates the archaic, inefficient and error-prone method of emailing legal agreements back forth between parties.
For companies focused on business process optimization, some real-time collaboration tools allow them to benchmark and track KPIs that can be used to improve contract negotiation strategies such as measuring time to execution, identifying common objections and redlines, understanding exactly who from the counterparty is involved in the process, and more.
Real-time contract collaboration tools can help businesses approve contracts faster and with more transparency than if they were in the same room together, as well improve and optimize processes in today’s new normal. It’s another great example of how using modern digital tools can transform the way you do business – for the better.
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