With the introduction of disruptive technologies, collaborative tools, and digital transformation, the business industry has become revolutionised. Contracts, however – which form the basis of business engagements/interactions have not kept up with the digital surge owing to: inscrutability, variations in contracts, and collaboration needed among multi-players to mention a few. Contracts signify agreements between parties with the objective of creating legal consequences. Traditional signing and other methods of conventional contracts may lead to delay, deal fatigue, and sometimes, missing out on a deal.
With time being of the essence, companies have continued to look for ways to facilitate contracting, and have started implementing digital solutions to facilitate contracting, from negotiation through execution. Given the advent of the pandemic and the migration of activities to cyber space, digital solutions that enable contracting and in turn business continuity have become a necessity. One of such digital solutions is Digital contracting.
Digital contracting is a process that turns the entire contracting lifestyle, not just signature, or storage, but every stage of the journey into a data-first, collaborative, browser-based workflow. This enables everyone in the business to work with contracts seamlessly – whatever their role. Digital contracting supports all types of contracts and facilitates all the process required for contracting. It enables smarter agreements to be executed faster. The overall status of contracts, as well as renewal dates will be widely known by members of the organisation, thereby providing unparalleled information about contracts within the organisation. More benefits of digital contracting can be found here.
Digital contracting offers a wide range of benefits; It provides templates designed for various contract types, ensuring a standardized format for even future contracts. It also plays a key role in the development of business operations, by improving the availability of contract information. The system ensures that all contracts can be conveniently found in the same place and available to authorized employees. Systems such as Excel and Word do not enable users to monitor the implementation of negotiations and contracts. They do not allow you to automate the management of contract monitoring, things like the fulfillment of contractual obligations, renewal of contracts, or the compliance of the contracting parties. These are however obtainable with digital contracting. Document management systems may be suited for some contract management tasks but this will require both product development and customization in order to function properly
As much as the benefits to digital contracting seems appealing, there are certain downsides as well. Due to limited storage and the difficulty of storing all documents on their servers, organizations depend on other sources and third parties to store documents. There is also the dependency on a proprietary signature for the execution of electronic signatures. When securing a contract management system, data security and privacy should form part of the overreaching factors taken into consideration. Digital contracts should be stored, retained, and archived using the same sort of privacy as conventional contracts to protect clients’ personally identifiable information. The unreliability of internet infrastructure could also pose a challenge to digital contracting.
Conclusively, it is safe to say that digital contracting would be the wave of the future. It is possible that there could be a synergy between traditional contracts and digital contracts for efficient and seamless contracting. This new mode of contracting can be used by all companies, irrespective of the size of data and the type of industry. It can also be used for all kinds of contracts. It is more agile, providing multiple advantages to organizations and businesses.