At 4C, we’ve been busy conducting research that seeks to understand how digitisation can combat inefficiencies in companies’ contract cycles. Inspired by the fact that fast-improving technologies are making the world of work increasingly efficient and cost-effective, we conducted an online survey designed to find out how companies are managing their agreement processes. The survey was completed by 501 UK respondents at manager level or above, working at businesses with over 100 employees, with investigation focused on three major sectors: finance, technology and manufacturing.
The results have been collated in a whitepaper, entitled ‘Accelerating the contract cycle: How digitisation can combat inefficiency’, which offers a number of fascinating figures and insightful commentary on the extent to which UK businesses have gotten on board with digitising the contract cycle.
We’ve put together some of its fascinating key takeaways below.
First things first: Why is contract automation beneficial and is it commonly used by UK businesses?
Manual contract creation has always been a rather lengthy process, with companies having to manage various approvals from clients, suppliers, and employees. As our whitepaper explains, concluding agreements takes an average of nine working days, time which employees could be spending on other, more creative business pursuits.
Thanks to digitalisation, however, this process can be streamlined to produce and verify agreements smoothly and within a much shorter time frame. What’s more, businesses that have already adopted digitised agreement platforms cite myriad other advantages such as improved data security, better regulatory compliance, and reduced environmental impact. With legislation such as the General Data Protection Regulation (GDPR) requiring businesses to adopt stringent data protection processes, agreement automation represents a fantastic way for companies to protect themselves from penalties and reputational damage.
It is perhaps surprising, therefore, that our survey discovered that only around 8% of companies have adopted fully automated agreement management processes. After all, agreement automation can help speed up traditionally lengthy tasks such as completing funding transfers and fulfilling orders.
A deeper look at the research
One of the survey’s most interesting findings was that although a select number of companies have adopted end-to-end automation, an overwhelming majority (92%) still use at least some manual contract processes.
Whilst results showed relatively slow adoption of fully digitised contract agreement processes, respondents demonstrated an appreciation of greater automation, with many acknowledging problems with their current ways of working.
What are the problems with manual agreement processes?
Our research found a number of issues arising from manual, outdated contract management processes:
Resources are under pressure
Many businesses find that manual contract management puts a strain on human resources. Indeed, our survey found that companies spend an average of 69 hours (nine working days) ensuring that agreements have been signed off and completed accurately. Shockingly, one in ten respondents reported that agreements take over 200 hours to be fully completed, equating to over an entire working month. Automation, therefore, represents a way for employees to channel their energies into more creative tasks that could drive profit and grow a business.
Legal issues and inaccuracies are a significant problem
Of course, manual processes also come with a higher risk of human error. All companies surveyed that are yet to adopt fully automated contract processes have experienced some kind of issue related to human error, with some taking a financial hit. Indeed, almost half of finance and manufacturing companies have lost money due to employee oversight. Automation, therefore, is an obvious cost-effective investment.
Manual processes come with security issues
Almost a quarter of the companies we surveyed conduct their agreement procedures in shared virtual and physical spaces, representing huge security vulnerabilities. What’s more, only 10% of agreements come with restricted access for named owners. In this way, businesses are concerned about the security risks that come with manual processes, with many managers keen to make the switch to digital platforms with stringent security measures.
The move to automation
It is abundantly clear that manual agreement processes are plagued with issues, so it should come as no surprise that 59% of the respondents we surveyed consider the move to fully automated processes very important to their business.
One of the biggest barriers to adoption at the moment is cost, with 39% of organisations concerned about how expensive full digitalisation could be. This is a rather short-term and limited view, however, particularly considering the ways in which automation could increase efficiency and protect companies from costly legal ramifications associated with human error.
Fortunately, as our whitepaper highlights, most businesses are already on the road to full automation. As anyone who has already started using cutting-edge agreement platforms has seen, the benefits of automation far outweigh the costs. Once a company has made the switch to an automated system, they will discover a new culture of extreme efficiency and accuracy, with employees freed up to work on other tasks.
If you would like to find out more about our research and read the full whitepaper, head to the download page.