AI Automation

Contract Management Automation Software Unbundled

Contracts are the lifeblood of every business. They are the cornerstone of customer, vendor, partner, and employee relationships. Businesses increasingly depend on relationships to lower costs, improve quality, and drive innovation. But traditional contract management tools and processes just don’t cut it. Contract management automation solutions address these issues.

In the era of digital transformation, implementing a contract management automation solution to unlock contracts’ underutilized potential is becoming the norm. This blog explores the costs of manual contracting, the stakeholders involved in the CLM process, how to automate it, how to measure its success, and more. Read.

What is contract management automation?

Contract management automation is the process of streamlining contract drafting, internal approvals, counterparty negotiations, signing, storage, and tracking. It eliminates mistake-prone, wasteful administrative work across the contract lifecycle. Automation of contracts addresses problems like manual processing, poor counterparty experiences, the risks associated with version control, and compromised data integrity across devices, teams, and organizations.

The cost of manual contract management

According to WCC, poor contract lifecycle management can cause your company:

9%

annual revenue leaks

5-40%

lost deal value

70%↑

friction before sign

All contracts contain gaps and ambiguities, and the sheer volume makes contract data difficult to track. They need uniformity and predetermined standards to organize, manage, and update. Traditionally, contract management involved a labyrinth of paperwork, manual processes, and scattered data.

In contract management, a party may also fear being ‘held up’ by the other. Despite the legal team’s best efforts to plan scenarios and get ahead of bottlenecks, this only hurts the bottom line.

In the complex world of legal operations, managing contracts efficiently is paramount. Contract management software helps streamline and automate the contract management process, from creation, approvals, and negotiations to signing and tracking.

The impact of contract management processes, according to Gartner Reports:

50%

decreased contracting time

25-30%

less admin overheads

55%

better compliance rates

Who benefits from contract management automation?

StakeholderPrimary use cases
Legal

Stay in control of all contracts everywhere

Move surer and faster with routine contracts

Sales

Create and close deals faster without legal dependence

Never miss a renewal again

HR

Centralize and standardize error-free employee contracts at scale

Hire quickly with self-serve contracting processes 

Finance

Leverage contract data for cashflow tracking & reporting

Mandate cash flows and manage contract risks

Procurement

Procure safer, faster, and more transparently

Simplify contract creation, negotiations, and renewals

What are the challenges of manual contracting and how can they be solved?

Each business has distinct characteristics. There could be various reasons why you need to automate your contract management. Here are some reasons the current circumstances may warrant a new contract management automation system.

1. Manual request management

Fragmented requests to in-house legal and legal ops teams are the norm in manual contracting. Each team spends a lot of time trying to bounce emails and documents for reviews on the fly. This causes delays, frustration, and inconsistency across departments.

In an automated system, a central workflow management and automated reminders eliminates the need for endless back-and-forth on email, enhancing efficiency, accuracy, and collaboration.

2. High contract TAT

Operating without a CLM tool leaves your teams no choice but to rely on manual processes like spreadsheets, back-and-forth emails, cluttered Slack communications, outdated tech, and creating ad hoc reports. This not only steals time away from strategic work but also heightens the chances of human error, causing you to overlook vital insights.

In an automated system, the contract creation process is significantly fast-tracked with standard templates and legal-approved clauses. This also reduces the chance of human error and ensures compliance. No-code workflow waterfalls can be configured with an audit log and version control. AI-redlining with an in-browser editor allows for faster contract reviews. E-sign integrations and native hand-drawn or OTP-based signing options help close contracts in 2 clicks.

3. Missed renewals

Fragmented CLM processes cause revenue leaks from missed renewals and opportunities. Especially for high-volume, low-complexity contracts that further impede legal productivity and erode trust in business relationships. Without key strategic analytics and intelligence of contractual obligations, your business goals don’t align with team KPIs and fail to serve your business and partners effectively.

In an automated contracting system, obligation tracking with auto-extracted metadata and automated reminders helps legal teams maintain viability and control of risks and liabilities. Dashboards and analytics can be valuable for real-time decision-making without legal dependencies. They can help track contract performance, identify bottlenecks, and automate the reporting process.

4. Visibility of contracts

Manual contract management lacks visibility making status and turn tracking difficult. Opacity causes further inefficiencies, delayed decision-making, non-compliance, and missed opportunities. 

In an automated system, an in-flight dashboard centralizes all contract process data in one place accessible to administrators. It tracks process metrics like contract status, number of turns, contract review time, upcoming deadlines, and compliance.

 

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Top contract management automation features

“The clearer the contract, the shorter the dispute.”

Paul Belleflamme

Standardize with contract templates

A robust contract creation solution should provide simple clear and intuitive templates for users to draft contracts easily. Augmented with a legally approved clause library, standard language templates align with business goals and aid in creating contracts with consistency. They can also ensure accuracy through OCR capabilities. Intake forms can further standardize contract requests by prompting users for key details.

Draft with conditional logic

Conditional logic empowers teams with error-free terms without drafting and editing each new contract. These rules and conditions can be pre-set in contract templates to automate the inclusion or exclusion of certain clauses based on context. The functionality allows legal and contract admin teams to retain visibility and control over clauses without manual tracking and editing.

Set up no-code workflows

A pre-defined contract management approval process involves routing designated reviewers based on contract volume and department criteria. They can be configured without code to send contracts to stakeholders in their respective turns automatically. Frictionless workflows put legal back in control, enhancing visibility and reducing bottlenecks so you always know who has the pen and who has to sign. This means quick reviews, approvals, and faster closures.

Redline with AI

While human negotiation discussions cannot be replaced, pre-defined non-negotiable clauses can be auto-extracted with AI for redlining which cuts contract review time by 30-40%. Other contract management automation functionalities in this stage of the contract lifecycle include conditional access for reviews, audit trails, and version control. In a unified workspace with integrations to email or Slack, they are great collaboration tools. Legal, finance, management, sales, HR, and counterparty teams are empowered to do more fulfilling work.

Process bulk actions

Sending and tracking standard-form contracts individually is tedious. Contracting is challenging even without the paperwork. Bulk actions can be leveraged for ESOP agreements, employee agreements, offer letters, invoices, supply-side onboarding agreements, and procurement contracts. Variables can be recorded on a sheet and uploaded for bulk sending. They can then be tracked, followed up on, signed, and executed in batches. Processing contracts in batches saves HR and procurement teams routine contract admin time and errors while efficiently keeping track of standard rights and obligations proactively.

Automate reminder alerts

Automated alerts help notify relevant stakeholders about renewals, deadlines, and obligations, preventing delays and penalties. These alerts can match the specific needs of contract types, users, and roles. Timely notifications mitigate risk, keep operations running smoothly, and aid compliance. Contract administrative teams are transported from Excel spreadsheets to prompt custom actions at scale.

Track with metadata auto-extraction

The true success of your business partnership lies not in signing a deal but in fulfilling obligations. You should be able to track key milestones, contract status, deadlines, performance metrics, and upcoming actions for proactive management, mitigating risks and maximizing opportunities. Auto-extraction of metadata can be done from imported contracts or external systems like CRM, ERP, and HRM software. This saves your teams the time and frustration of manual data entry, tracking, and reporting.

Execute with e-signatures

The pen is the first act of commitment that bridges intentions and actions. Contract signing software expedites contract execution with secure electronic signature integration. Contract automation tools in this stage eliminate the need for paper-based signing, reduce delays, and ensure compliance with industry standards and legal requirements. Signing integrations with tools like Adobe Sign, DocuSign, and Hello Sign are efficient. Other legally binding ways to sign include hand-drawn or OTP-based options.

Visualize data with dashboards

Automated analytics dashboards provide insights into contract performance, expiration dates, and renewal needs. They replace manual data capture with smart fields that help you visualize key contract data for prompt decisions. Contract automation tools in the in-flight stage help you track real-time contract process data and the pulse of your contracting productivity. It provides a comprehensive overview of all ongoing contract pre-executions. It displays key metrics such as the number of turns, current turn, and total review time to optimize the process and close deals faster.

Centralize with integrations

Integrations simplify tasks across contract lifecycle management from auto-drafts, routing, and reminders to e-signatures and renewal tracking on CRMs and ERPs. Before you pick your contract management automation tool, ensure that it integrates with existing systems. The right integrations can empower your teams to self-serve on contracts without dependence on legal.

StageAutomationReplaces
Contract creation

Dynamic data tagging

Rich-text contract editor

Pre-approved automated contract templates

Clause library

Word, G-docs, PDF
Approval workflows

No-code workflows

Configure contract terms with conditional logic

Version control

Audit trails

Word, Google Docs, Email
Negotiation

Assign stakeholders, user roles & access

Browser-based editor

AI-redlining & review

Version control

Detailed contract audit trails

Word, Google Forms, manual change tracking & version control
Signatures

Central audit log

Legally binding and compliant eSignatures

Word, manual signing
Contract Repository

Central secure contract repository with automated metadata extraction

Advanced searchability with AI filters

Email, One Drive, manual archives
Tracking & Analytics

Track contract obligations with automated metadata extraction

Automated reminders for key contract dates

Contract intelligence & reporting

Visual analytics dashboards for decision-making

Custom contract & contract family reports

G-Calendar, Email, Sheets, Excel and Looker
Other crucial points of value

Integrations with core business systems

Administrative integrations for contract drafting, status tracking, and reminder alerts

Disjointed systems
 

How do you measure the success of contract management automation?

The success of contract management automation is best measured when KPIs are directly linked to specific outcomes expected of legal and other stakeholder teams. They include metrics like contract turnaround time, contract review time, turns taken, cost saved per contract, and contract retrieval time.

Contract TAT

The total time it takes for a contract to go from the initial request to completion. It includes all pre-award stages of the contract lifecycle.

Contract review time

A specific timeframe within the contract TAT involves contract review and redlining. Legal teams usually analyze documents, spot risks, and suggest edits in this phase.

Turns taken

This is the number of times a contract goes back and forth between stakeholders during contract review and negotiations. Fewer turns imply efficiency.

Cost saved per contract

This metric factors the resources saved from reduced manual work, fewer errors, and a faster contract TAT to calculate the overall financial savings.

Time saved on contract retrieval

This refers to the time saved on contract and contract data manual searches across disjointed tools.

Why choose HyperStart over other contract management software 

StagesWithout HyperStartWith HyperStart
Central repository90% of contract management teams struggle to find contracts2-second contract retrieval
Redlining71% of contract are not monitored for deviations from standard terms75% reduction in contract review time 
Tracking 78% of organizations don’t track obligations systematicallyNever miss a renewal again
Costs$3,800, $14,000, and $49,000 costs incurred for simple, mid, and high-complexity contracts33% of cost saved

Contract management automation use cases by industry

Contract automation revolutionizes multiple industries streamlining contract processes, enhancing efficiency, and mitigating risks. Here are real-world applications of contract management automation across a few industries:

1. Real-estate

The real estate industry handles large volumes of lease and sales contracts. Communication across stakeholders like buyers, sellers, agents, and legal teams while ensuring compliance with local regulations is also challenging.

Instead, sales contracts and lease agreements can have standard templates, no-code workflows, signature integrations, and systems to handle routine tenant communications for rent due, maintenance updates, and contract renewals.

2. Manufacturing & supply chain

The supply chain industry demands handling high volumes of complex clauses. Approvals across multiple departments and regulatory locations are a key challenge.

Contract management automation in the industry simplifies administrative work, payments, renewals, and reminders while keeping rote work transparent, traceable, consistent, and compliant. Integrations with existing procurement systems also help track contract statuses in a unified workspace.

3. Healthcare

In healthcare, collaborative processes may conflict with customer privacy and confidentiality per HIPAA and other regulations. The industry stewards sensitive information around patient care, supplier agreements, and industry regulatory compliance while responsibly coordinating with departments and external care partners.

Automation for patient care agreements emerges when creating and managing consent forms, treatment agreements, and insurance claims. On the buy side, you can standardize vendor agreements and SLAs, streamline contract workflows for medical equipment, pharmaceuticals, and services, and track renewals with automated alerts.

4. Construction

The construction industry manages contracts with subcontractors, suppliers, and clients with tight deadlines and budgets. It also frequently processes change orders and amendments.

The right CLM helps you generate and send bid requests with standard templates. Subcontractor agreements and change orders can be automated efficiently with workflows and pre-approved clauses based on project type and scope.

5. IT

IT institutions manage high volumes of SLAs and other project contracts while abiding by compliance data security and privacy laws.

A CLM automates standard form contracts like software licensing agreements, SLAs, MSAs, and NDAs from creation to completion to commitment.

Ready to automate your CLM?

Shopping for a contract management automation solution is like shopping for a home. You will need to evaluate it and compare options, features, and prices before you make the buying decision. In today’s business climate, legal teams are under immense pressure to manage a growing volume of contracts effectively. To make sure the implementation is successful, legal teams should carefully plan and adhere to the best practices in the industry.

As the stodgy image of the legal world cracks under the force of AI-powered contract management automation and augmentation, this technology has the potential to reduce stress, eliminate manual drudgery, improve data accuracy, and nurture your business relationships and trust. So lawyers can soar above bottlenecks and focus on what matters most: strategic decisions and contract intelligence. 

HyperStart leads the industry with robust, secure, and intuitive contract management automation at different touchpoints of the contract lifecycle, driving value at each of them. You can get started in 5–7 days. Unlock superior value at a fraction of the cost. 

Frequently asked questions

Contract automation software streamlines and simplifies initial contract creation, workflows, and execution, as well as performance and renewal tracking. It reduces manual errors, enhances compliance, and boosts legal efficiency by 80%.
The 6 stages of contract management that can be automated or augmented with AI are: creation, approvals: no-code workflows with conditional logic, negotiations, signing, storage, and tracking.
No, contract automation cannot eliminate the need for legal teams. The value of legal teams is defined by the complexity of problems they solve, like challenging negotiations, creativity, and deep analysis. Precious legal resources are better employed there than repetitive and administrative tasks.
AI is a powerful tool that streamlines the contract lifecycle, improves accuracy, and provides analytics insights. It can :
  • auto-extract intelligent data
  • flag contract risks and vulnerabilities
  • retrieve contracts with smart filters
  • standardize contract creation
  • AI-powered redlining reducing review time
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