What Is Workflow Automation Software for Contracts?

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by ContractRoom

Workflow AutomationWorkflow automation software can be thought of as any software that embodies a repeatable business process into software. General benefits of embodying a business process in workflow automation software include speeding up and scaling the process, reducing manual steps, and improving control over how the process is carried out.

Workflow automation makes complicated business processes easier to manage. An article on Technology Advice provides some examples of what these tools do: When a form fill, user action, or internal signal is triggered, automated workflows can move or transform data according to your instructions. This hands-off approach helps streamline repetitive and time-consuming work.

 

 

Workflow automation software comes in two main flavors:

  • General-purpose workflow automation software tools

  • Workflow automation software embedded into a function-specific or vertical-specific solution.

General-purpose workflow automation software tools can be adapted to a variety of business processes. This makes them suitable for business processes that are unique to a particular company or that are not well covered by pre-built functional or vertical solutions. The downside of general-purpose workflow automation tools of course is the amount of work required to build your process into such a tool. This often includes a fair amount of “reinventing the wheel,” since most business processes are common across companies.

For these common business processes, most companies choose to consume workflow automation software embedded as part of a functional or vertical package. CRM, ERP, service management, procurement and increasingly contract management systems are examples of software solutions that include embedded workflow automation software.

 

What is Workflow Automation Software for Contracts?

Given that many companies deal with thousands of contracts a year, most organizations can benefit by automating their contracting processes. The challenge is selecting the right kind of solution.

The functionality of workflow automation software for contracts focuses on streamlining the specific workflows involved with contract lifecycle management, including:

    • Contract Request

    • Reviewing and Redlining

    • Negotiations

    • Approvals

    • Execution

    • Storage

    • Records Management

    • Search and Retrieval

    • Audit and Reporting

    • Renewal/Disposition

In theory, workflow automation software for these workflows can be either embedded as part of a contract lifecycle management (CLM) solution or built out using a general-purpose workflow automation tool. In practice though, most companies choose a contract lifecycle management solution to cover these needs, just as they choose to purchase a CRM system rather than build their own.

 

Advantages of Consuming Workflow Automation Software Within a CLM Solution

There are several main benefits to consuming workflow automation software for contracts as part of CLM solution:

    • Faster implementation with less customization

    • Integration with popular adjacent software solutions

    • Expanded contract capabilities both within and beyond workflow automation

Faster implementation with less customization

While general workflow automation software offers broad functionality, organizations will have to spend the time and effort to customize and configure it to their needs. This can easily become a huge time-waster for organizations dealing with thousands of contracts each year.

Specifically-designed CLM software reduces the need for customization, as contract-specific workflow processes are already defined and optimized to solve industry pain-points. This reduces the need for back-end customization and allows teams to focus on their main business objectives.

Integration with popular adjacent software solutions

Optimizing the contracting process includes choosing products that integrate well with popular solutions for adjacent business functions. These include CRM systems such as Salesforce for sales contracts, as well as procurement and ERP systems for purchasing contracts. Since a CLM system is designed specifically to automate contract processes, it will have integrations to such contract-adjacent systems already built in.

Expanded contract capabilities both within and beyond workflow automation

CLM systems embody industry best practices for contract management workflow that are not pre-built in a general purpose workflow automation software tool. This is analogous to the best practices for sales forecasting and operations built into a CRM system. Having these best practice workflows built in does more than save time in implementation; it actually improves the way your company handles contracts.

It’s also important to understand that the functionality of a contract lifecycle management system extends beyond workflow automation software. At the front end, functionality such as online negotiation can greatly speed up the closing of agreements. Post-execution, a robust CLM system stores all contracts in a searchable repository that facilitates everything from contract analysis to risk mitigation and obligation management. This is not functionality that can readily be replicated using general-purpose workflow automation software.

 

Specific Benefits of Workflow Automation Software for Contracts

Automating contract administration and management processes will save organizations a significant amount of money and time. For example, one of Contract Room's legal clients was able to process 20,000 staff contract requests 75% faster and with 90% greater accuracy.

This efficiency comes from streamlining every aspect of the contracting process with embedded workflow automation and cloud storage capabilities -- including  form creation, negotiations, approval routing, renewals, exceptions, search and retrieval, etc.

As decision-makers realize, organizational efficiency is key for productivity. Cloud-based contract management solutions are giving modern enterprises the functionality needed to optimally organize and manage their contracting processes.

An article found at TechTarget explains more:

In the enterprise, contract management software can be used to manage a new contract request, capture data related to the contract and document authoring, contract creation and negotiation. The software can then follow the contract as it goes through the review and approval process, providing documentation for digital signatures and execution of the contract, including post-execution tracking and commitments management. The workflow automation software not only provides business owners with better visibility into the status of a specific contract, it also facilitates reporting and compliance.

Throughout the contract's lifecycle journey, workflow automation software works to streamline each process with rules-based triggers and AI machine-learning algorithms. The resulting efficiency improves compliance, productivity, strategic vision, and more.

Cloud-based CLM solutions fully centralize contracting processes in the cloud, improving accessibility, visibility, collaboration, and compliance. These improvements help organizations replace redundant manual processes and cumbersome paper storage systems.

 

Conclusion

Optimizing contract management with workflow automation software can improve not only contract workflows but also vendor collaboration, client/employee satisfaction levels, compliance, and ultimately the bottom-line.

The optimal way to realize these benefits is by consuming workflow automation software as embedded technology within a purpose-built contract management solution.

If you would like to learn more about how ContractRoom’s CLM platform can help you, please contact us today.

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