Automating contract approvals: Everything you need to know

In today’s competitive corporate landscape, mastering contract management can be the difference between soaring success and stumbling setbacks. Imagine a world where contract approvals are as swift and seamless as a well-choreographed dance. By automating contract approvals, you not only streamline your workflow but also ensure compliance and speed up the deal-making process.

In this blog, we’ll embark on a journey through the realm of contract lifecycle management (CLM). We’ll explore the magic of flexible and complex workflows, tackle the challenges of integrating with platforms like Salesforce, and reveal how a connected CLM platform can transform these processes into a symphony of efficiency.

The value of flexible and complex workflows

Effective contract management requires a system that can handle the intricate needs of an organization. Flexible and complex workflows are essential for adapting to various scenarios, such as contracts that need to pass through multiple departments for approval.

Benefits of automating contract approval workflows

Enhanced efficiency

Automating the approval process eliminates manual steps, reducing the time taken to approve contracts. According to reports by Weshare, automation can lead to a 50% reduction in contract negotiation cycle times. This means deals can be closed faster, allowing businesses to capitalize on opportunities more quickly.

Improved accuracy and compliance

Manual processes are prone to errors, which can lead to compliance issues. Automated workflows ensure that all necessary steps are followed, and any deviations are flagged for review. This reduces the risk of missed approvals or overlooked contract terms, in turn maintaining legal and regulatory compliance.

Better visibility and tracking

Automated systems provide real-time tracking of contract statuses, making it easier to monitor progress and identify bottlenecks. This visibility is crucial for maintaining control over the contract lifecycle. Managers can see exactly where a contract is in the approval process and take action if there are delays.

Consistent application of business rules

Automating workflows ensures that business rules are applied consistently across all contracts, reducing the risk of non-compliance and enhancing governance. This consistency helps in maintaining the integrity of the contract management process and ensures that every contract meets the organization’s standards.

How to create complex and flexible workflows

To create effective automated workflows, your CLM platform must be able to adapt to various business needs:

1. Customizable approval processes

Each department may have different requirements for contract approvals. A CLM platform should allow for customizable workflows that can be tailored to the specific needs of each department. For example, finance may require additional budget approvals, while legal might need detailed compliance checks.

2. Sequential and parallel approvals

Depending on the complexity of the contract, it may require sequential approvals (one after another) or parallel approvals (multiple approvals at the same time). Your CLM system should support both types of workflows. This flexibility allows for more efficient processing of high-priority contracts without compromising on due diligence.

3. Conditional routing

Some contracts may need additional scrutiny based on their value, type, or other factors. Conditional routing allows the system to direct contracts to the appropriate reviewers based on pre-defined criteria. For example, contracts above a certain monetary threshold might automatically route to senior management for final approval.

Integrating with your CRM and other platforms

Integrating your CLM platform with other systems like Salesforce can significantly enhance the contract management process. However, these integrations can also introduce complexities.

Challenges of integration

1. Data consistency

Ensuring that data remains consistent across multiple platforms is a common challenge. Discrepancies can lead to errors and delays in the approval process. For instance, if contract details are updated in Salesforce but not reflected in the CLM system, this can cause confusion and approval delays.

2. System compatability

Not all systems are designed to work seamlessly together. Compatibility issues can hinder the smooth flow of information between platforms. This can result in disconnected workflows and data silos, impacting the efficiency of the contract approval process.

Simplifying integration with a connected CLM platform

A connected CLM platform can mitigate these challenges by providing seamless integration with other business systems:

1. Unified data management

A connected CLM platform ensures that data is synchronized across all integrated systems, maintaining consistency and accuracy. This unification helps in avoiding duplicate entries and ensures that everyone is working with the most up-to-date information.

2. Streamlined workflows

With integrations, contract data can flow automatically from your CRM (like Salesforce) to the CLM system, triggering the appropriate approval workflows without manual intervention. This reduces the chances of errors and speeds up the approval process.

3. Enhanced collaboration

Integrations facilitate better collaboration between departments, as all stakeholders can access the same information and updates in real time. This level of transparency fosters a more collaborative environment, making it easier to address any issues promptly.

Real-world examples

Many organizations have successfully implemented automated contract approval workflows using Agiloft’s CLM platform:

A public health sector organization serving 2+ million people

Read how King County in Washington State adopted Agiloft’s CLM solution to streamline their governmental contract processes. By implementing Agiloft, King County was able to achieve a fourfold reduction in costs associated with contract management. This cost-efficiency allowed the county to allocate resources more effectively while maintaining high levels of transparency and efficiency in managing contracts, ensuring all necessary approvals were obtained promptly and accurately.

The largest higher education institution in Oregon

Portland Community College also benefited greatly from implementing Agiloft’s automated workflows. The college managed to centralize its contract management, cutting down on administrative overhead and improving the speed of contract approvals by over 50%. This allowed faculty and administration to focus more on their educational mission rather than being bogged down by manual contract processes.

The leading teaching and research hospital in Virginia

Another noteworthy example is the Eastern Virginia Medical School (EVMS), a renowned institution that has implemented Agiloft’s CLM solution to streamline their contract workflow processes. By leveraging Agiloft’s platform, EVMS has successfully reduced contract workflow time by more than 30%, leading to increased efficiency and productivity within their healthcare operations.

Conclusion

Automating contract approvals is essential for improving efficiency, accuracy, and compliance in contract management. By leveraging flexible and complex workflows, integrating with platforms like Salesforce, and utilizing a connected CLM platform, businesses can overcome the challenges associated with manual processes.

For more insights and real-world examples, explore Agiloft’s customer success stories to see how organizations can transform their contracting processes with data-first CLM.