Modern Systems of Agreement: The Digital Transformation Key
Companies from two-person startups through to global enterprises are undertaking digital transformation exercises to attempt to modernize their processes and systems — not for technology’s sake, but to drive employee productivity, improve their customers’ experiences, and increase security and adherence to governance and statute.
A commissioned research paper conducted by Forrester Consulting on behalf of DocuSign has shown that one of the most effective ways to achieve substantial gains in the digital transformation journey is the modernization of agreement processes — in fact, the company calls those gains “low-hanging fruit” for those wishing to improve the customer experience.
The reason for that claim is apparent when we consider what agreements represent in the business lifecycle. With each agreement able to improve or worsen relationships with customers, partners and suppliers, and the fact that agreements are literally everywhere in a business, transforming an organization’s systems of agreement can be a significant catalyst for change.
So how important has digital transformation become in the minds of the 605 business leaders surveyed and interviewed by Forrester? Two years ago, it was only considered a primary focus for improvement efforts in 13 percent of cases. Two years from now, those surveyed placed digital transformation as the top priority in 49 percent of cases.
If digital agreement management is inextricably bound in digital transformation, and customer experience is massively influenced by the way a company manages its agreements, where in the agreement lifecycle are improvements possible?
Here’s a summary of Forrester’s breakdown of the agreement life cycle:
Preparation: preparation of agreements methods range from “scratch” creation to being formed with digitized templates from a single source.
Collaboration: ensuring internal approval and sign-off, especially from a statutory, governance, and legal point of view.
Signatures: the collation of signatures electronically, or on paper, from all stakeholders (often multiple signatories internally and from third parties).
Enactment: where the agreement triggers further actions, from work being undertaken to fulfill the contract (for example), to initiation of billing, creation of payments, ordering stock, and so forth.
Storage & management: storage in filing cabinets, on individual hard disks, in data silos or a single “source of truth” for agreements.
The survey has shown that the signature-gathering aspect of the agreement lifecycle is currently the most digitally-automated, thanks to the now widespread acceptance of electronic signatures provided by companies like DocuSign.
However, the acceptance of digital signature formats is not yet 100 percent embraced everywhere in the world, or in every vertical.
Where modern digital methods are not deployed along the agreement lifecycle’s stages, that’s where errors creep in, costs can accrue, progress is slow, and therefore, customer experiences worsen significantly, Forrester reports.
Legal approval of new agreements and contracts complicates the picture in companies that either generate contracts and agreements from scratch, fill in a template, or duplicate and alter an existing instance.
What we believe to be a staggering 84 percent of respondents said that’s how their agreements are currently created. As one global service manager at a pharma company said on record (speaking after digitization of the agreements system in use), “[…], it takes about 15 minutes to get [a] contract signed, where it used to take days to weeks.”
During those “days to weeks” is where errors creep in, with consequent impact on the organization, plus of course, manual processes take time, and so even if done correctly, still cost a great deal more than a digitized agreement management system.
The cut, paste, and copy involved in manual agreement enactment are also massively inefficient. After digital signatures have been gathered, activities like manually routing agreements to multiple teams for action is commonplace (53 percent), and 46 percent admitted errors and the need to rework because of human errors.
The final stage of the agreement lifecycle perhaps seems the most mundane — after all, it’s just filing, isn’t it?
On the contrary. It appears that the manual searching for contracts and agreements, either to refer to again or to be the starting point for a new instance is also hugely time-consuming, and that’s if the retrieval is successful at all.
Ranks of filing cabinets rammed with sheaves of paper may be a stereotypical view of the office of yesteryear, but for 19 percent of the Forrester survey’s respondents, searches through individual employee’s hard drives and through those file cabinets are a reality.
The aims of digital transformation initiatives are clear: increased efficiency, lowered costs, better customer service and experience.
The digitization of what remains to be a massively un-automated and manual series of processes seems, therefore, to be perhaps the best candidate for quick and efficient change.
Read the full study by downloading it here, and see how modernized systems of agreement management can help your organization on its digital journey.