Docusign’s acquisition of SpringCM confirms that eSignature is just the tip of the contract management iceberg.
eSignature has become a routine way of executing contracts, even fairly basic agreements, such as NDAs and employment contracts. That’s great. eSignature is a great convenience for users in the final execution step of contracts. But if the only “e” in your contracts is the signature, they might as well be paper in a file drawer.
This reality was tacitly acknowledged by leading eSignature vendor Docusign when they purchased contract management startup SpringCM. Clearly eSignature vendors themselves see the limitations of a “sign and store” solution, and are trying to extend their relevance. That’s because the 30-second process of signing is just one tiny part of the overall contract lifecycle management process -- and by no means the most complicated, risky or expensive part.
A contract starts with negotiation, an often complex back and forth that absolutely cries out to be digitized. Redlining documents in Word and sending uncontrolled versions back and forth via email is hardly more “e” than having the parties throw paper airplanes at each other. Putting the negotiation online in a contract lifecycle management solution dramatically increases the speed with which the parties come to agreement. In fact, we commonly see our clients close agreements ten times faster when they put their negotiation process online. A contract lifecycle management system also dramatically speeds up other steps, such as document assembly. Building terms into a document goes from hours to seconds.
A fully digitized contract process also dramatically increases control and reduces risk, something eSignature alone does nothing to address. Unlike creating documents offline and dumping them into an eSignature systems, a true contract lifecycle management system provides guardrails that speed up routine transactions while managing exceptions. Users are constrained to a playbook of approved terms, and rules-based routing and approvals ensure visibility for management.
Finally, eSignature systems provide only basic search capability on the documents stored within them. In contrast, a true contract lifecycle management systems should offer deep analysis and reporting on both contract content and the contracting process. ContractRoom for example offers deep content search that can perform such sophisticated tasks as identifying a all contracts that use a specific clause, or process reporting to identify bottlenecks in contract completion by stage or by person. Contract lifecycle management systems mine their repositories for insights to make the contracting process and the business better.
As advocates for better contracting, we are happy to see eSignature vendors acknowledge that a more robust solution is needed for contract management. Welcome to the party, Docusign! But for those looking for a robust contract management solution, we would love to show you one that is already good to go. It also does (and integrates with third-party) eSignature!