Automated contract management for SMEs

March 25, 2021
Magda Fessy

The digital age is an age of permanent change and fast-moving digital innovations. Machine learning, AI, robotic process automation, virtual reality, big data – one trend chases the next. It is sometimes difficult to maintain an overview here. And especially in the SME sector, there is a great deal of uncertainty: What will prevail, and what will turn out to be a flash in the pan? Our tip: rely on the automation of processes. In the area of contract management, it not only helps to save costs. You will also always be on the safe side from a legal point of view.

What does automation mean? A definition

Automation is the term used when recurring processes are outsourced to a machine or computer. The smart technology then handles these completely or to a large extent independently. The advantage of this is that workflows are processed more efficiently, always with consistent quality and in a cost-saving manner. This is because a machine can work around the clock and always delivers the expected result.

However, decision-makers traditionally associate the term automation with high acquisition costs for a machine or tool that must be amortized over years or decades. For areas such as industrial manufacturing, this may be true.

Cost-efficient automation - yes, it is!

But there are also areas in which processes can be automated without immediately swallowing up vast sums. On the contrary, users here can even enjoy the many benefits of automation in a very cost-efficient manner. A perfect example from practice is the automation of contract management.

For this purpose, there are smart software applications such as Approovd, which make it very easy for even non-lawyers to create a first-class and legally compliant contract. Users do not have to do anything other than let the software guide them step by step through the creation of a contract. The process requires no prior legal knowledge and is ressembles the streaming model of music platforms: Users find and customize the contract they need, when they need it.

The automation of contract creation is particularly well suited to SMEs, which usually do not have their own in-house lawyers compared to the big players. In practice, therefore, they often fall back on existing templates, which, however, are becoming increasingly outdated. This is because the density of regulation and the speed of change in contracting have never been as high as they are today.

Minimizing sources of error thanks to automation

If SMEs do not regularly adapt their templates in an expert manner, they risk legal defects in their contracts. Especially when specialist departments make updates to the best of their knowledge and belief, the risk for errors is high – because legal pitfalls often lie in the details and are difficult for non-experts to recognize. The safe but expensive alternative is to have an external lawyer review each contract from time to time. But the usually tight budgets of SMEs often do not allow for this.

It is therefore obvious that a higher degree of automation in contract management would solve many problems in one move, especially in medium-sized and small companies. What often stands in the way, however, are concerns from within the company itself. For many employees, the keyword automation triggers the uneasy feeling of being replaced by a computer program. But these concerns are unfounded.

Conclusion: Automation in contract management

On the contrary, users benefit noticeably from automating their contract management: they do not have to struggle with the time-consuming and error-prone adaptation of outdated documents, but thanks to automatic workflows they get back valuable hours that they can invest perfectly in the further development of their area. Thus, higher automation in contract management is a win-win situation for all sides: Higher cost efficiency, legally flawless contracts and more time for strategic thinking.

Magda Fessy
Digital Marketing Director

Approovd

Magda is convinced of the benefits of automation. She is committed to ensuring that all companies in Switzerland have access to the best legal know-how.

Automated contract management for SMEs

What does automation mean? A definition

Cost-efficient automation - yes, it is!

Minimizing sources of error thanks to automation

Conclusion: Automation in contract management

Share article