Traditional contract management has several challenges that may affect organizational efficiency. Most of these are manual processes that may be prone to errors and take too much time to complete. Such operational bottlenecks make it difficult to meet deadlines and track contract lifecycles. This results in unnecessary financial and legal issues.
The best alternative to overcome such issues is by opting for digital contract management. It involves leveraging advanced technical solutions to ensure better contract management for organisations. Let’s highlight more about digital contract management software, its benefits, and other details below.
A digital contract management system is a portal that creates, stores, tracks, or gets contracts signed electronically. It’s quite different from physical files or cabinets and is more focused on streamlined contract management processes.
Also called digital contract management software, these systems aim to transform conventional, paper-based management processes into intelligent, integrated, and dynamic systems. They cover the journey of a contract right from the initiation process to execution, tracking, and renewal.
Contractual agreements are compulsory for establishing business deals with customers, clients, stakeholders, and other professionals. Only a few companies can master contract management par excellence. Studies often show that businesses may lose 5% to 40% of deals because of insufficient contract processes.
The solution to this is digital contract management that allows companies to work on contracts electronically by relying on advanced technological solutions. Digitizing contracts allows companies to drive operational efficiencies at every stage of the contract lifecycle. This helps them maximize the value they get from existing and new contracts.
Digital contract software makes it quite easy for professionals or businesses to create a digital contract. However, you must learn the steps to create the contract correctly to ensure a hassle-free process.
Here’s a step-by-step guide on creating a contract with the help of a digital contract management system.
Outline the purpose of your contract, which can be either related to freelance work, a rental agreement, or other business service terms. Add the full names, roles, and location of the parties involved. This helps you make sure the agreement is customised for the right people and business objectives.
Include all details, terms and conditions, and other liabilities in the contract to make sure it’s accurate. Some of the key details to include are the scope of work or obligations, payment terms, duration, and dispute resolution.
Select an entrusted digital contract management system to upload your contract. You can upload, track, edit, or get the contract signed on the same system. You can also send the contracts to other parties through the same system.
Upload the contract to the software and add signature fields if needed. Then, you can assign the document to the intended party on the same system. Set a signing order if required. You can also add additional elements like checkboxes, custom fields, initials, and dates.
Send the contract via email through the digital platform. The digital contracting software will notify you when recipients open or sign. You can also set deadlines and reminders for pending signatures.
Several contract legal teams are already improving their adoption of digital contract management solutions to improve contract management. The good part is that improving existing contracts does not even require an all-or-nothing initiative. Even small improvements using digital contracting software can significantly streamline your workflows.
On that note, here are the steps to digitize your contract management process effectively.
Secure executive approval, which often involves other departments, to make sure the project begins on time. Make sure you have the right people to work on the contract. For the smooth implementation of your digital contract management software, cross-functional collaboration is essential.
Look at your existing approach to managing contracts and identify the gaps and pain points. Make sure to be transparent as you go through the discovery process. This is key to selecting the right digital contract management system.
Identify the reasons behind changing your current process and switching to a digital contract management system. You must also determine which items are most important in the process.
Create a CoE that gives you the blueprint for expanding the knowledge to specify improvements in your legal contracts and automate other digital contract management processes. This centralized team can easily manage your implementation roadmap for online contract management success.
Create a central repository for all approved contracts and clauses, including information for each customer and vendor. This involves creating a more efficient contract process with a permanent storage solution as part of your digital contract management software setup.
A legal contract playbook usually includes pre-approved clauses and contract templates. They can easily act as self-service opportunities among lawyers and contract managers who do not want to spend much time working on contracts manually.
Introduce an automated intake process on the digital contract software that can easily eliminate manual labor and free up resources for more important tasks. This helps ensure consistency in the information submitted with zero filtering.
A contact may go through several rounds of revisions, with various approvers, before it is uploaded for signatures. Examine the effectiveness of your current workflows to increase the efficiency gains through online contract management tools and streamline your digital contract management process.
Case management is associated with your intake process, and it can benefit greatly from automation. Make sure you can upload multiple versions of a document to the case file, lock your final documents, and integrate the solution with other relevant internal systems.
Once your digital contract management system is in place, establish key performance indicators (KPIs) to evaluate its effectiveness. Track metrics like contract turnaround time, renewal success rates, and compliance adherence.
Every contract management process begins with a draft, and the end is the signed final copy in the archive. You must avoid experiments at this stage and instead rely on a clearly defined, step-by-step procedure for your digital contract management, as mentioned below:
| Steps | Descriptions |
| Contract Negotiation | Begin with contract negotiations, as part of which business partners will communicate, and you will note down the crucial points in the document. Conversely, one of the parties may provide a rough framework, and the other party may accept it or suggest some changes. This is a vital phase in the digital contract management lifecycle. |
| Review the Contract | If both parties agree to the digital contract, it goes for review. This helps make sure that the new contract does not clash with the interests of any other existing contract. The legal departments of both parties will also check the contract thoroughly as part of a proper contract negotiation workflow. |
| Contract Filing | The contract is put into force by implementing the signatures of both parties if the draft is approved upon review. Each party will receive at least one valid copy of the signed contract for future purposes. This process is streamlined using a digital contract management system for secure filing and retrieval. |
| Track the Contract | There must be regular checks on the contract once it comes into effect. This helps make sure that both parties are following the agreements and adhering to the deadlines. Efficient contract tracking is a key feature of modern digital contract software, ensuring visibility and compliance throughout the contract lifecycle. |
Not all digital contract management systems can provide you with the same key benefits. However, there are certain common features present in each software that you can easily leverage:
| Features | Descriptions |
| Automated Document Assembly | Automating the contract generation process with clause libraries and templates reduces the time to value and improves the legal team’s responsiveness. This empowers individual business units with self-service contracts for standard, routine agreements, such as non-disclosure agreements and employment contracts. This is one of the most sought-after features in digital contracting software. |
| AI-powered Contract Analysis | A digital contract based on artificial intelligence (AI) is often packed full of key terms, obligations, and dates. These minute but crucial details are important for risk management across parties in the long run, making AI a vital part of advanced digital contract management. |
| Process Automation and Workflow | Automated workflows are a part of online contract management that can easily eliminate manual procedures to follow the correct steps and approvals. This speeds up contract execution and eliminates the risk that contracts are entered into without the proper authority and approval. |
| Centralized Contract Repository | A centralized digital repository stores all contracts, clauses, templates, and historical data in one secure location. This feature ensures easy access, version control, and audit trails. This reduces the risk of lost documents and enables quick retrieval during audits or renegotiations, which is fundamental to effective digital contract management. |
| Real-Time Collaboration and E-Signatures | Modern systems allow multiple stakeholders to review, comment, and make changes in real-time. Integrated e-signature functionality also speeds up finalization to ensure legally binding execution without printing or scanning. This real-time capability is standard across leading digital contract management software platforms. |
You must ensure that a digital contract management software includes all key features that cater to legal, procurement, and business needs. The right features help streamline processes, improve compliance, and reduce turnaround time, like the ones mentioned below:
Reusable clause libraries and pre-approved templates help maintain consistency across all contracts. These also enable legal and business teams to draft documents faster and with minimal risk of errors. Such features are integral to any digital contract management system or digital contracting software.
Look for software that supports customizable workflows, including review, approval, and signature stages. Automated reminders and alerts for renewals or obligations prevent missed deadlines.
AI-enabled search allows users to locate key contract terms, parties, expiration dates, and obligations quickly. This is particularly useful when managing hundreds or thousands of contracts, making it an essential component of advanced digital contract management.
A complete audit trail tracks every edit, comment, and signature added to a document. This ensures transparency, compliance, and accountability at every stage of the contract lifecycle.
Built-in e-signature capabilities ensure secure, legally binding execution of contracts. It eliminates delays caused by physical signatures and improves overall efficiency, further strengthening the value of digital contracting software.
AI is already transforming how businesses manage contracts by removing manual burdens and minimizing human error. Here’s how AI-backed digital contract management enhances contract processes:
| AI Capability | Description |
| Intelligent Document Review | AI can scan large volumes of contracts to identify risky clauses, missing data, or non-compliance with company policies. This allows legal teams to focus on strategic issues rather than line-by-line reviews. It significantly improves efficiency within digital contract management workflows. |
| Contract Data Extraction | AI tools can extract key metadata like party names, dates, payment terms, and obligations. This information can then be organized for easy tracking and reporting without the need for manual entry- an essential feature in digital contract software and online contract management KWS. |
| Predictive Insights | AI can analyze historical contract data to suggest optimal negotiation strategies or highlight patterns that could lead to disputes. This aids in better decision-making during the contracting process and enhances the functionality of your digital contracting software. |
Are you looking for an all-in-one digital contract management system? If yes, then Legistify stands out with its user-friendly interface and enterprise-ready capabilities.
| Features | Description |
| Centralized Repository and Collaboration Tools | Legistify enables teams to store, manage, and retrieve contracts from a secure cloud-based location. It supports internal collaboration and external negotiation via secure document sharing, essential in any digital contract management system. |
| Custom Workflows and Templates | It allows businesses to customise contract approval workflows based on internal processes. Users can select from predefined templates or add clauses from the central library, reducing drafting time through efficient digital contracting software. |
| Compliance and Risk Management | Legistify includes compliance checks, clause deviation alerts, and AI-based insights to flag potential risks. This proactive risk identification helps ensure that contracts are aligned with legal and business standards, a key benefit of using digital contract software for modern contract management. |
Shifting to digital contracts offers several measurable advantages for organizations, both large and small. Here’s how digital contract management helps companies increase their operational efficiency and gather better ROIs over time.
Digital contract software removes paper-based delays. From contract creation to signature, every step is streamlined, often reducing execution time from days to hours.
All stakeholders can access real-time data on contract status, due dates, and responsibilities. Dashboards and reports offer full visibility across the contract lifecycle, which is a key strength of modern online contract management systems.
With every change logged and all versions stored, audit readiness becomes simpler. Automated reminders for renewals and obligations also help maintain compliance, a standard feature in any digital contract management system.
Reducing paper usage, printing, courier fees, and administrative effort results in lower overall digital contract management costs. Additionally, AI reduces reliance on external legal reviews for standard agreements.
Digitizing your contract management isn’t an overnight transition, but it’s definitely achievable with a step-by-step approach.
Here’s an overview of the process that one must follow when shifting from traditional to digital contract management.
| Step | Description |
| Evaluate Current Pain Points | Identify manual bottlenecks, approval delays, missed renewals, and storage issues in your existing workflow. This helps define your goals for digital contract management. |
| Build Cross-Departmental Alignment | Involve stakeholders from legal, procurement, finance, and IT. Getting buy-in from each department ensures smoother implementation and adoption of digital contract management software. |
| Choose the Right Technology | Pick a contract lifecycle management (CLM) tool that aligns with your needs, be it AI integration, scalability, or ease of use. Ensure it can integrate with your existing systems, like CRMs or ERPs, for seamless digital contract software use. |
| Train and Onboard Teams | Training is critical. Organize hands-on sessions for legal, sales, and admin users to understand how to create, edit, approve, and store contracts using the new digital contracting software platform. |
| Monitor and Optimize | After implementation, track metrics such as average contract cycle time, user adoption rate, and compliance issues. Use these insights to refine processes and ensure the long-term success of your digital contract management system. |
Digitization and AI are the need of the hour, and what better way to implement them than with a digital contract management system? Every company must implement the software on its systems for a smooth and hassle-free process to close business deals. It also helps create flexibility among parties when sharing, tracking, or signing contracts.
Among the many choices available in the market, selecting the most suitable contract management tool can be a tough job. Legistify is the go-to solution in this case. Legistify is a leading digital contract management software provider that offers a fast, reliable, and precise automated platform for large organizations. The software provides functionalities such as centralised storage, collaboration with partners, and compliance tracking, which all serve to help legal departments and firms in the effective management of the contract lifecycle.
Step up your game by opting for Legistify for all your digital contracting solutions.
