Switching from manual contracts to automated digital workflows

When done well, digitalization increases our efficiency, giving us more time to focus on our highest-value activities, and creating many new opportunities for innovation.

Digitalised online consumer banking doesn't just offer the convenience of 24-hour access; it also enables a host of innovative time-saving services like automatic bill payment.

Commodities and freight companies across the industry still spend a considerable amount of time manually performing contracting-related activities the same way they have for the past 20 years without the many benefits of recent innovations.

For example, many traders must still manually walk documents through an approval process by emailing documents from person to person. If an approver is unavailable or overlooks an important email, favourable trading opportunities may be lost. Additionally, it is challenging to track the status of many contracts when email threads multiply as more people are involved, such as when a trading manager decides that a legal review of a proposed change is required. Worse, companies systematically fail to make the most of their hard-won negotiations by missing important deadlines to execute valuable options.

"Contract automation gives all participants more time to focus on higher-value activities."

Digital workflows and contract automation provides many benefits:

1. The contract's execution can be orchestrated from start to finish by the digital workflow software instead of manually by email, getting the right person's attention when needed without requiring people to live in their inbox. This gives all participants more time to focus on higher-value activities, like optimizing the terms of the deal. It also allows organizations to set and automatically track performance KPIs for each operation, allowing them to identify and improve process bottlenecks, which can, in turn, lead to faster throughput and increased customer satisfaction.
2. Capturing the data in a digital workflow tool when it is first entered and storing it in an accurate and precise data model makes it possible for all your business systems to share the data electronically, speeding data exchange and reducing human error from manual re-keying.
3. The ability to analyse and report on all the data in your contracts and as well as on the performance of your contracting process gives you improved real-time situational awareness, so you can better understand your risks and opportunities as market conditions change.
4. You can capture and automate the application of your organization's knowledge by using rules defined by your experts to automate the assembly of contracts using the clauses with the best terms for the situation, freeing up those experts to work on less repetitive activities.
5. You can control what kinds of terms are negotiable and automate the approval of changes to low-risk terms while automatically routing other changes to the concerned party. For example, changes to certain terms can automatically trigger a mandatory approval from a trading manager or your Legal department. This “management by exception” frees most work to proceed unencumbered while ensuring that the trades needing special attention get it

In combination, these benefits create a more understandable, predictable, reliable, and smoothly-running contracting process, saving time, increasing compliance, and reducing risk.

A few tips to help you on your journey to automation

• Quite often, change management is the biggest challenge. Don't try to improve everything at once. Instead, let your organisation grow into it by focusing first on a few key benefits and adapting to those changes before rolling out the next feature. This incremental approach delivers increasing returns over time while giving people time to adjust.
• Research where you can benefit most, and start there. Sometimes this isn't obvious, so many vendors will work with you to map out your current contracting process and even quantify the business case for different improvements you can make.
• Your vendor is your partner, so find one who will invest in getting to know your needs and addressing your challenges.

At Chinsay, we are excited to help commodities and trading organisations realise all the efficiency and innovation that fully automated digital workflow solutions enable. Our Intelligent Contract Platform makes this easy.