How RPA Drives Efficient Contract Management
The continuous technological advancements have caused the world to change at a considerable rate. As the world enters a digital transformation era, organizations consistently need to keep up with the changing times.
Technologies such as artificial intelligence (AI) and Robotic Process Automation (RPA) are gradually penetrating various industries. Like any other market, the Contract Management industry is also affected and subjected to digital transformation. More specifically, this article aims to explore RPA for contract management.
How will Contract Automation Impact Contract Management?
To establish a contract is no ordinary piece of paper. A contract is a legally binding agreement between two parties. A contract is an agreement between one party demanding goods or services and another party supplying the goods or services in business practice.
Presently, most companies still adhere to old methods in carrying out their operational phase, integrating a limited use of technology, thereby decreasing efficiency and value. Although organizations employ a contract administration system, this system is mostly just a principal source of all documentation. It does not ensure excellent contract management, nor does it automatize validating purchases. Thus, to optimize contract management, organizations must look for ways to balance methodology and technology. Such is what implementing RPA for contract management can offer.
Aside from streamlining contract terms and their timely renewal, employing RPA for contract management also allows for the digitization of contracts which is a huge leap towards more efficient contract management.
Currently, most organizations still put contracts, which are often unstructured, on paper. This method makes it difficult and time-consuming for most contract management staff to find necessary information within the contract.
With the application of RPA for contract management, this is not the case. RPA allows contract managers to store contracts as online data, thereby increasing contract visibility, improving document management, and enhancing overall accessibility and efficiency.
Today, there is existing software that already takes contract management a step closer towards efficiency. One of these is the Contract Lifecycle Management (CLM). CLM can partially automate and implement process elements throughout the contract lifecycle in terms of requests, collaboration, and signing for every purchase. Although CLM partially streamlines the process for contact managers, it does not wholly prevent "value leakage."
To further overcome this challenge, emerging technologies like artificial intelligence (AI), especially Robotics Process Automation, can be integrated into Contract Lifecycle Management systems to prevent "value leakage." With the integration of RPA for contract management, contracts can be optimized and can reap the maximum benefits of full contract terms, timely contract renewal, among others.
Robotics for Real-time Information Gathering
The application of RPA for contract management or its integration with the Contract Lifecycle Management software automates repetitive, monotonous tasks such as approvals and notifications, thereby resulting in shorter cycles and increasing overall productivity. Contrarily, a study conducted by Gartner found that 85% of companies who did not have an effective CLM resulted in longer cycle times, stakeholder frustrations, and unsealed deals.
Conclusion
Although traditional contract management techniques are still able to provide a clear structure in the handling and managing of documents, it can be a source of several inefficiencies in practice that may lead to more issues than good. However, with the continuous advancements of technology, these inefficiencies can be alleviated and overcome. The most viable option for writing is implementing or integrating RPA for contract management in the contract management system.
With the use of RPA for contract management, employees get freed of tedious, time-consuming tasks. They have more time to focus on higher-value tasks, thereby increasing overall productivity. Although the application of RPA for contract management is a relatively new concept to explore, RPA for contract management holds great potential to keep the contract management industry afloat in these changing times.
