We’ve got smart phones and smart houses. The way we live and work has become immeasurably more interesting and efficient because of our technology. The same is true for contract negotiations and the future is looking even smarter. With emerging technology like Blockchain, contract lifecycle management (CLM) can be further revolutionized through self-execution, transparency, and mass collaboration.
Even though Blockchain technology was developed for the buying, selling, and usage of the crypto-currency ‘Bitcoin’, and is predominantly used by the financial industry, it is now gaining favor in other industries because of its potential upside. Real estate, supply chain management, insurance, healthcare, among others, are industries that the Blockchain will impact for the better in the coming months.
The concept of decentralization of information and data storage managed by a network of invited users means more security and incorruptibility. Every record saved or edited on Blockchain is visible to everyone else who was given access. Nothing can be altered without everyone else with access being notified, and nothing can be retroactively manipulated. But for practical purposes, a deep understanding of Blockchain technology is not necessary in order to use it effectively.
When negotiating contracts, many of the mundane administrative tasks can weigh the process down and prevent deals from closing. Cloud-based contract lifecycle management software such as ContractRoom have revolutionized the end-to-end contracting process; facilitating negotiations and helping businesses reach agreements quickly and efficiently with a user-friendly digital platform.
So, how is a “Smart Contract” helping? A smart contract is "a computerized transaction protocol that executes the terms of a “contract". A Blockchain-based smart contract is visible to all users of said Blockchain. A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible.
The phrase "smart contracts" was coined by computer scientist Nick Szabo in 1994, and reworked over several years. Szabo's first publication named "Smart Contracts", later reworked as "Formalizing and Securing Relationships on Public Networks." These documents described how it would be possible to establish contract law and related business practices through the design of electronic commerce protocols, between strangers on the Internet.
However, whether using a paper-based contract or smart contract, what’s most important is to enable a smart contract-ing process to eliminate the time, money and resources wasted in reaching an agreement on a contract negotiation. An advanced CLM platform should ensure that all of the terms and conditions agreed to during the contract negotiation process can be carried out automatically (or with minimal manual intervention). Once a contract is negotiated and executed, all parties can rest assured that what was agreed to will be honored in a timely fashion and in full compliance. Task management, legal involvement and approval chasing is kept to a minimum. And when you reach agreement, you can either use ironclad execution electronic signature (or even leverage a ledger or rather “smart contract”) so that not only is every transaction/record stored automatically, it also will ensure transparency and irreversibility.
So, the million dollar question is whether it’s a Smart Contract or smart contracting that will transform your operation for greater revenue recognition and/or massive efficiency savings.
To significantly reduce the cost, timing, and frustration of an inefficient contracting operation, large corporations are turning to ContractRoom to transform how agreements are reached. The ContractRoom cloud platform has revolutionized the way decisions are made and deals get done by fully automating and streamlining the process for the full end-to-end negotiation and contracting lifecycle. This is helping enterprises with thousands of sales and procurement professionals to get through the deal making process faster, safer and smarter.