New research shows that 62% of business leaders struggle to locate and access previously approved contracts for reference. 50% face tedious, inefficient, and repetitive legal and compliance approval processes as part of their contract iteration, and 54% have to manually track and analyse key terms, deadlines, renewal dates, and enforcement needs.

These figures come from Deloitte and Docusign’s Digital Agreement Management Study which reveals the scale of the problem surrounding poorly managed business agreements.

It’s a story of toilsome, inefficient processes that slow down sales and lose the value from activity. Companies with disconnected agreement management workflows lose twice as many deals due to poor agreement processes. 

No small business can afford to be less agile than their bigger competitors, and learning the causes and consequences of a poor agreement management process provides a valuable leg-up.

The Agreement Trap

The problem is clear: Due to inefficient processes, almost no business, regardless of size, manages its agreement process without losing important insights. This causes slipped deals, lost customers from complicated onboarding, and lost time and money from poor vendor or partner delivery on what was promised. Deloitte found up to 25,000 hours annually are wasted while developing agreements, and 14,000 are wasted analysing agreements for insights.

First, moving an agreement from a confirmatory conversation to a signature is more complicated than it should be and may involve mistakes caused by human error. The data shows these processes take 10 business days longer than they ought to.

Then, once a contract is signed, sealed, and delivered, it’s often filed and forgotten, not referred back to for adjusting delivery expectations or supporting timely and efficient renewals and renegotiations. What about analysing, understanding, and leveraging that information in ongoing business operations?

Agreements are often lengthy and a challenge to understand. Non-legal professionals need some support to offer context about the document and how clauses relate to each other. This is an easy opportunity to start using AI. It can generate fast, easier-to-understand summaries of long blocks of text so each person can focus on the terms that are relevant to their expertise. This counts double for smaller businesses who can’t access consistent legal advice or rely on manpower to stay on top of contractual detail in this way.

Boiling all this down, the average business is treating their contracts – even where they have digitised much of the process – like mediaeval scrolls: important, archived, rarely touched, and often forgotten about. This knowledge could be used to empower growth and efficiency opportunities.

Breaking free of the trap

One problem with a broken, old-fashioned system of managing agreements is that it has an outsized impact on small businesses who don’t have time or people to throw at optimising their processes as they seek the next deal. The solution comes from the latest evolution in the digitalisation of business – what business leaders have heard a lot about lately: AI.

Just as the paper map gave way to the keen analytical cartographer of a smartphone’s route planner, every area of business, including agreement management, can be supercharged to help staff deliver greater value. In this case, ‘intelligent agreement management’ (IAM) is the category that helps guide businesses to using their contracts and agreements like stepping stones to where they want to go.

AI-assisted agreement management will help users in just the same way that solutions like CRM or human capital management help the marketing or HR teams make the most of their time and attention. Compared to well-resourced businesses, small businesses often see a comparatively high advantage from these solutions, helping their teams and processes work smarter and grow revenue faster.

Losing value from poor agreement management should no longer be discounted as an unavoidable cost of doing business. Using new advancements in AI to break out of the agreement trap is one of the biggest opportunities for a small business to unleash value. Customers can be better served, and the business given greater stability. Because after a trap comes freedom.