The New Era of Corporate Contracting
In 2010, a fledgling tech startup named Dropbox inked a pivotal contract with Amazon Web Services. It secured scalable cloud storage that fueled its meteoric rise from a scrappy file-sharing app to a $10 billion enterprise.
What’s the untold story behind your next deal?
Modern technologies such as artificial intelligence (AI), blockchain, and machine learning (ML) have significantly evolved the contracting process in this digital-first era. The contract journey no longer transpires through antiquated paper documents or email exchanges.
By 2025, AI-powered contract analytics are expected to eliminate manual contract review processes, reducing manual efforts for drafting and reviewing contracts by 50%.
Most businesses have already adopted digitizing their contract workflows using contract automation solutions, such as Contract Lifecycle Management (CLM). CLM is an all-in-one platform for contract management, compliance, efficiency, and risk reduction.
Why Traditional Contracting is Costing You Millions
Businesses face contract management challenges in traditional paper-based contract workflows. These include maintaining contracts through shared drives, lengthy email chains, spreadsheets, and printed documents stored in physical facilities. This siloed approach often lacks transparency, scalability, and accountability, resulting in delayed and inefficient corporate contractual processes.
4 Common Legacy Contracting Challenges Corporations Face
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- Disjointed Collaboration: Contract workflows require multi-departmental involvement in various stages, such as collaboration, negotiation, and approval, making it hard to keep track of the contract status. A KPMG report states that businesses lose 40% of their contract value due to a lack of visibility and inefficient tracking.
- Poor Compliance Management: Contracts stuck in a siloed system have fewer compliance checks, leading to non-adherence to legal and regulatory standards and reputational damage. Over 70% of businesses struggle with poor compliance management, often lacking robust compliance management.
- Inefficient Storage Capacity: Conventionally, contracts are stored in shared drives, emails, or paper-based documents. Manual contract storage is likely to get lost, is prone to security risks, and can be fabricated without a centralized repository.
- High Operational Costs: Comparatively, traditional contracting incurs more expenses as it involves printing, scanning, couriering, and physical storage. Companies often overspend on contracts due to missed expiry and renewal deadlines, causing financial loss.
The Shift: Corporate Contract Journey in the Digital Way
A Contract Lifecycle Management system addresses every aspect of your contract journey from instant contract retrieval to faster approval. With contract automation, your organization can experience streamlined bulk workflows, centralized storage, and real-time collaboration and tracking.
| “The contract lifecycle — from start to finish — now fits on a screen.
Not in a file cabinet. This isn’t just a feature. It’s a foundation. One that opens the door to a future where trust is built digitally, securely — and at scale.” – Krupesh Bhat, CEO, SignDesk |
The Transition in Contract Journey
- Faster Contract Cycles: CLM Automation streamlines contract management processes, reducing manual effort and accelerating time-to-fill metrics.
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- TAT Reduction: After leveraging CLM tools, the HR and legal firms experience a reduction in TAT and faster contract execution.
- Missed Contract Milestones: Companies experience increased real-time visibility into contract status and performance, resulting in better ROI and zero missed renewals.
- Improved Audit Efficiency: Organizations that utilize smart contract workflows can enhance their audit efficiency, facilitating online collaboration and remote access to files from anywhere.
How AI-Powered CLM Accelerates a Corporate Contract’s Legal Journey at Every Stage
The legal journey of a corporate contract within a CLM system encompasses several key stages –
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Initiation
A corporate contract’s legal journey usually starts with an initial offer and acceptance, then moves on to the exchange of consideration and a distinct intention to establish a legally binding agreement.
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Drafting
Contracts are drafted once business requirements are precise using standard clauses, key terms, and counterparty details. The CLM tool enables stakeholders to create contract clauses using pre-approved templates and AI-powered clause suggestions.
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Negotiation
Once drafted, the contract undergoes several rounds of online negotiation to finalize its key terms and clauses with version control. AI-powered CLM tool enables real-time digital collaboration with stakeholders, thereby accelerating the approval cycles.
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Approval
The contract is submitted for approval once the terms, obligations, and compliance parameters are reviewed. In a CLM system, stakeholders can monitor all edits and user roles through the activity log, guaranteeing transparency throughout the review process.
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Execution
Upon successful approval, the parties officially sign the corporate contract. The CLM system optimizes this process through integrated eSign and eStamp solutions, which enable remote bulk signing and online payment of stamp duty.
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Tracking
A contract tracking system and analytical dashboard within CLM software enable businesses to monitor contract performance, track the real-time status of all contract stages, and extract valuable insights for informed data-driven decisions.
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Renewal
The CLM platform sends automated notifications and alerts for milestone updates such as contract expiration, payment status, and renewal information, reducing the risk of missed deadlines.
5 Practical Tips for Drafting the Right Contract
- Start with Your Business Structure
2. Map Out the Deal’s Complexity
3. Prioritize Risk Coverage
4. Know the Commitment Timeline
5. Tailor It to Who You’re Working With
The Road Ahead: The Future of Smart Corporate Contracts
Corporate contracts are strategic tools that shape partnerships, ensuring compliance and organizational value. Businesses can reframe the digital contract journey by leveraging digital solutions like CLM, transcending from manual and risk-prone legacy contracting to a seamless and scalable AI-powered contract governance.
Whether you’re handling joint ventures, mergers, or everyday vendor agreements, contract lifecycle management enables organizations to manage contracts efficiently and effectively. With the right CLM tools, even complex corporate contracts can be evolved into compliant processes that recreate a legal journey toward trust, transparency, and growth.