In our previous article, “Why Contract Design is Becoming More Important to Enterprise Businesses”, we dive into how the consumer-driven economy is forcing enterprise businesses to shift the way they interact with clients, driving them to be more mobile with their services. Here, we explain how to start designing your contracts based on the needs of your business, rather than the other way around.
As their consumer-facing interactions change, so must workflows tied to them. One of those major workflows is contract management.
Think of this: A consumer signs up for your product or services via a mobile device. Shouldn’t the terms and conditions/contract process align with that ease of service?
Contract creation: Ideal state analysis
One of the first steps when evaluating your contract process to find room for improvement and efficiencies is to perform an ideal state analysis.
An ideal state analysis is the process by which you assess a specific business process as is and evaluate what it would look like without contract acceptance. Ask yourself:
- How would the process change without contract acceptance?
- How would it speed up and improve?
- How much are you deviating from the optimal process now?
- Does your current contract acceptance take your process on an unnecessary tangent? (are there any bottlenecks that you’d wish to eliminate?)
There is a perception that when both velocity and volume increase, especially exponentially, risk also increases and you lose control over some aspect of contract process. As part of your ideal state analysis, it’ll be important to take a methodical, systematic approach to ensure that velocity does not result in an increase in risk and decrease in control.
An example would be revenue increasing, driving more new business. Rapid growth is a good thing for businesses; however, it can cause some crucial internal workflows to start to break. Sales teams need contracts completed and sent for signature at an even faster rate, and if those contract designs aren’t built to scale with rate of the business, significant factors can fall through the cracks (or, worse—deals can stall).
You’ve analyzed your idea state of business—what next?
Once you’ve analyzed your ideal state, figure out how to inject contract acceptance into that process and design your contracts from the ground up in a way that will preserve that ideal state to the maximum extent possible.
Think, for example, of the sales contract. At a basic level, there is a buyer, and there is a seller. Then there is a sales person. Then there are multiple parties from the buyer. To keep track of the moving parts, you invest in a customer relationship management (CRM) tool. On top of all that, there are phone calls, emails, meetings, product people, and a host of other stakeholders, and, at some point, a contract. To optimize that sales process, then, consider how these different factors of contract design can inform a new contract experience:
- Workflow: What is your ideal workflow? What business systems are involved? How will they talk to one another?
- Presentation: How should the contract look? How do you want signers and stakeholders to interact with it?
- Engagement: How do you want it to be accepted?
- Velocity: How long do you want the overall process to take? What kind of volume do you want to handle?
- Recordkeeping: What kinds of records will you keep, and how will they be stored? What does tracking look like? (This will prove crucial when your online agreements are litigated.)
Contracts ought to be molded to the needs and functions of the business, not the other way around. In our podcast with Vanessa Davis, Vice President, Research and Product Development at LegalZoom, we dive into how LegalZoom looks at its internal workflows when implementing new efficiencies.
Vanessa shares how to combat challenges of technology adoption when even in a technology-driven environment, noting that team members using multiple tech products doesn’t always equal optimal efficiency. The key is making sure that these technologies integrate with and talk to one another, all working in parallel to move the business forward.
Additionally, Vanessa shares how important is is to know what other team members in your department are working on, what resources are needed, how to prioritize. Regarding contract design, this plays into how you structure your contract process.
For example, B2B SaaS/software companies can easily improve their online contract workflows by referencing terms hosted online as a link in order forms. Additionally, this eliminates redlines for smaller deals and improves readability of your contract.
Learn more about designing your contracts around your enterprise workflow by downloading our latest white paper, “Designing High-Velocity Contracts for Enterprise Businesses.” Download the eBook below!