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Contract automation: The what, why, and how

Digital transformation, Document productivity

Templafy

May 30, 2024

Is contract chaos disrupting your business?

Discover how to choose a contract automation tool that streamlines workflows, saves time, and strengthens security & compliance in this buyers’ guide.

Your legal teams are on the hunt for ways to make the contract lifecycle faster and more efficient. But they’re not the only department with eyes on contract automation.

Contracts brush through every corner of your business. That means, without robust processes, bottlenecks are inevitable. And they cost. In fact, poor contract management can eat up 9% of a company’s annual revenue, according to research by non-profit organization World Commerce & Contracting.

While manual document processes may be the norm in your business, they are time-consuming and prone to errors. With contract automation, employees can automate low-value admin tasks throughout the entire contract lifecycle – making space for more strategic work – while enhancing security, visibility, and accuracy.

What is contract automation?

Contract automation is a type of document automation software that digitizes and automates the creation and management of contracts, at every stage of the contract lifecycle – from drafting and editing, to approval workflows, tracking, and distribution.

By leveraging advanced technology (like rules-based automation and Managed AI) and customizable templates, contract automation tools automate repetitive tasks, like data entry and document assembly.

Like all document automation software, contract automation software aims to increase efficiency, reduce errors, ensure consistency, improve collaboration, enhance security, and ensure compliance with organizational standards and regulatory requirements.

Ultimately, the aim is to empower users to create high-quality contracts, faster and with less effort, allowing them to focus on more strategic tasks.

The price of procrastinating on document automation

The following statistics are based on a Templafy survey of 2,000+ employees from around the globe.

94% of workers say that they regularly find mistakes in “finalized” content
Employees can save 30 days annually per employee with document automation.
62% of global workers report that they waste time at work recreating content that may already exist.

How to automate the contract lifecycle (a quick guide)

Every step of your contract workflow can reap the benefits of automation. Here’s how.

1. Creation

Kickstart contract creation with pre-built templates and auto-generated content. Save time by automatically populating contracts with relevant data sourced from various platforms, with rules-based automation and AI.

The best contract automation tools seamlessly integrate with your everyday applications. For instance, Templafy seamlessly generates content directly within Microsoft 365, Salesforce, and Outlook, ensuring a smooth and efficient workflow

2. Collaboration

Simplify negotiations with features for tracking changes and real-time commenting. Ensure alignment across teams with centralized control over branding and compliance, so all assets and data stay current.

3. Approval

Accelerate the sign-off process with automated workflows that route contracts to the appropriate stakeholders for review and approval. Bid farewell to bottlenecks.

4. Execution

Seal the deal from anywhere with digital signing capabilities.

“Templafy ensures our professionals have access to the right content at the right time, so they can spend more time on true finance work.”

Petra Cisneros

Mergers & Acquisition Associate, Aquin

The benefits of contract automation

Increase efficiency and productivity

By automating repetitive tasks, contract automation frees up valuable time for legal, sales, and other stakeholders – so they can focus on more strategic tasks.

Reduce error & inconsistency

Automation minimizes the risk of human errors, such as typos, incorrect data entry, and formatting mistakes. Centralizing control allows for real-time updates — creating a single source of the truth.

Enhance security & compliance

Contract automation ensures compliance by enforcing the use of pre-approved clauses and templates.

Accelerate turnaround time

Automated workflows mean contracts are produced and delivered to stakeholders quickly – speeding up decision-making.

Save on cost, increase revenue

Save costs on administrative overheads and potential errors, while speeding up the entire sales cycle and freeing up resources for more strategic work.

Contract Automation

5 key features to prioritize

Customizable templates: Customizable templates tailored to your industry and organization’s specific requirements.
Workflow automation: Automated workflows that route contracts to the right stakeholders for review and approval.
Electronic signature integration: Seamless integration with leading electronic signature providers, such as DocuSign or Adobe Sign.
Advanced security: Look for role-based access controls, encryption, audit trails, and compliance certifications (like SOC 2, ISO 27001). These features ensure the confidentiality, integrity, and availability of your contract data, maintaining regulatory compliance and mitigating security risks.
Analytics and reporting: Look out for customizable dashboards, reporting tools, and metrics tracking to monitor contract performance, identify trends, and measure key metrics such as contract cycle time, renewal rates, and compliance adherence.

Security & compliance in contract automation

Contracts are your businesses most sensitive documents – so choosing a vendor with robust security measures is non-negotiable. Let’s explore how to safeguard your sensitive contract data.

Guaranteed compliance with centralized control

Document automation platforms like Templafy centralize management of data and assets – so admins only have access to the most up-to-date information. Centralized control puts Legal in the drivers’ seat when it comes to compliance, with pre-approved clauses and templates – minimizing the risk of regulatory violations.

Security and compliance checklist

Keep an eye out for the following essential features when selecting a contract automation vendor like Templafy.

Role-based permissions for precise access control
Compliance templates ensuring adherence to industry regulations
Robust version control to track and manage document revisions
Data residency and sovereignty options for compliance with regional laws
Secure document sharing to protect sensitive information
Collaborative tools with built-in security measures
Comprehensive compliance reporting for auditing and transparency

Security accreditation and certification

Ensure that your data, privacy, and compliance requirements are rigorously upheld by opting for a contract automation platform that is backed up by the right accreditations and certifications.

Verify that the company holds SOC II and ISO 27001 certifications.
Speak directly with their Chief Information Security Officer (CISO) to understand their approach to security.

Templafy is powered by enterprise-grade security. We’re trusted by 800+ enterprises to meet and exceed industry standards. Read more about our security-first approach.

The cost of poor security in document automation

The following data was collected by Templafy.

Companies without ISO 27001 certifications are 48% more likely to experience a data breach compared to certified organizations.
Businesses using vendors without SOC II compliance face an average of 2.5x higher financial losses in the event of a security incident.

“We know that all employees have access to updated and correct templates, and we save time by having our templates available when needed. Additionally, we know that all approved pictures are easily available, and that we are able to ensure that all disclaimers and general terms and information are updated on a regular basis.”

Ove Forseth

Brand Manager, BDO Norway

How to choose the right contract automation tool for your business

Document automation platforms are not one-size-fits-all. To guide your selection process, consider these key factors.

Key considerations when choosing a vendor

Scalability: Does the solution have the capacity to scale with our business needs?
Industry-specific templates: Does the software offer templates customized for our industry?
Security & compliance: What security measures and compliance protocols does the software employ?
Integration: How seamlessly does the software integrate with our existing systems and workflows?
Customization: To what extent can the software be tailored to meet our specific contract management needs?

Conclusion

Contract automation is more than just a tool – it’s a strategic investment that has the power to drive efficiency, accuracy, and compliance across your organization. Here are the key takeaways from this blog, to get you started on your contract automation journey.

CONTRACT AUTOMATION

5 key takeaways

Contract chaos costs: Inefficient contract management can eat up to 9% of a company’s annual revenue, highlighting the urgency to streamline workflows and minimize bottlenecks.
Contract automation in action: From creation to execution, contract automation tools like Templafy streamline processes, reduce errors, and accelerate turnaround times, ultimately boosting productivity and revenue.
Security first: Verify that the company holds SOC II and ISO 27001 certifications.
The benefits: Contract automation increases efficiency and productivity, reduces error and inconsistency, enhances security and compliance, accelerates turnaround time, and saves costs while increasing revenue.
Choosing the right tool: Consider factors such as scalability, industry-specific templates, security and compliance measures, integration capabilities, and customization options when selecting a contract automation vendor.

Contracts are just the tip of the iceberg. Experience the full power of document automation with Templafy.

Templafy automates the entire document workflow to enable better document creation at any complexity and scale, for over 800 organizations globally.

With Templafy, employees gain instant access to on-brand, up-to-date, and compliant company templates, seamlessly integrated within their daily apps, like Microsoft 365 and Salesforce.

Book a demo today and discover how our platform can revolutionize your workflow.

Contract automation: The what, why, and how

Contract automation: The what, why, and how