How to Close Contracts Faster with Real-Time Negotiation
You’ve finally written what you think is the ideal contract. Your legal team has pored over it. Your CEO has signed off on it. Everything looks good — until it’s time to send it in.
Now it’s time for the other side to examine the contract and make proposed changes. You wait. Then you wait. And you wait some more. When those alterations come back, you get to start the process over again. This isn’t a fast-moving or intuitive workflow for anyone.
According to Harvard Business Review, inefficient contracting processes causes firms to lose anywhere from 5 to 40 percent of value on a deal. The International Association for Contract and Commercial Management (IACCM) has found that more than 80 percent of contracts using today’s practices do not result in the best outcome.
Here are some of the ways that inefficient contracting processes cause firms to lose value on a deal:
If your business has a habit of missing critical deadlines, it is probably losing value in its agreements. Deadlines such as expiration and auto-renewal dates can cause liability issues, remaining legally bound to a contract that doesn’t benefit your business, or missing the chance to renew a valuable agreement. Each of these can result in a significant amount of lost profit.
Lawsuits over compliance issues aren’t only time-consuming, but also costly. Businesses regularly uncompliant with their contractual obligations and regulations most likely have inefficient contracting processes. For example, if your contracts aren’t regularly audited to ensure that they have all of the necessary clauses, a compliance issue is likely to slip through the cracks and cost you later down the line.
Companies that unproductively manage their contracts are likely to miss out on opportunities to add value to their agreement. This is because their team is so tied up with mundane administrative tasks that they don’t have time to consider the ways to improve value before they agree on a contract. This could be anything from missing the chance to negotiate a higher price to missing out on developing healthy partnerships with other companies.
Lack of data analysis
Data analysis allows you to learn from your mistakes so you don’t repeat them again. It is an invaluable tool when it comes to the contract lifecycle process. But, many businesses don’t even look at their KPIs and other data sets from their previous contracts to understand how to improve ones in the future.
The way we’ve historically done contracts tends to sap both parties of time and money — but there’s a better way: real-time online negotiation.
An End to Costly Turn-Based Negotiation
A common frustration among businesses is the friction involved when it comes to negotiating contracts. In a digital world, it’s one of the last remaining manual business processes. Thankfully, it finally has a cure.
Parley Pro’s Online Negotiation Engine (ONE) works much like real-time communication tools employed by businesses all over the world. Instead of one person passing it off to another, the platform is capable of hosting multiple people in the contract at one time — much like editing a Google Document in real-time, while still remaining legally compliant.
This makes the negotiation process more transparent and dramatically speeds up the contract lifecycle. What used to take months or weeks can now be done in hours, reducing bottlenecks and freeing up employees to focus on higher-value activities.
When you close contract negotiations faster, you free up valuable time to:
Prioritize client and partner relationships
Client and partner relationships are one thing that every successful business owner should prioritize. Clients are your source of profit, and partners help you ensure your business runs smoothly. When you take the time to improve your relationships with both, you can expect to increase your number of repeat customers and form more beneficial deals with your partners. Both of these can help you network and build a positive reputation for your company, which is essential when you’re trying to develop your practice.
Expand your operations
Growing your business takes a considerable amount of time and resources, which many companies with inefficient contract lifecycle management lack. All of this valuable time that’s wasted could be used to develop their company, instead, they’re stuck going back and forth over the terms of a single agreement. If you optimize your negotiations process, you can dedicate more time and resources to improving your business to support expansion and become a leader in your industry.
Look for bottlenecks in other departments
Contract management might not be the only process slowing your company down. Many businesses have bottlenecks in other departments that they don’t even realize because their hands are tied with their legal agreements. These inefficiencies lead to lost profit and productivity within your business. Streamlining negotiations can free up a considerable amount of time, allowing you to check in on other departments and collaborate with the team on ways to improve.
Real-time negotiation allows for red flags and speed bumps to be cleared up in minutes, not days or weeks. The other party can view the same document as you, quickly and easily bringing up any issues, allowing you to answer questions as they pop up. The process of negotiation has never been smoother, saving multiple headaches on both sides.
Additionally, all parties are able to see where the contract negotiation is — stage by stage. Everyone involved can quickly see what needs approval, and what is mutually agreed upon.
This way, no one is working off the old version of a contract. The current version is the only version, something essentially impossible when you’re working off Microsoft Word or email as your platform. Those programs were not meant to handle complex legal negotiations. Parley Pro specifically addresses this critical process.
Get Back to Business Faster
The faster and smoother the negotiation process goes, the quicker you’re able to get back to doing what you do best. Real-time negotiation through Parley Pro’s Online Negotiation Engine cuts through the friction and frustration, allowing you to spend more time growing your business.
In addition, Parley Pro’s analytics tools and dashboards give you the power to make future negotiations flow more smoothly. Unlike a basic word processor program, our platform allows you to glean useful insights, seeing where negotiations tended to stall.
Interested in making the negotiation process a real-time collaborative effort instead of a lengthy nightmare? Schedule a demo of Parley Pro today or sign up for a 14-day free trial.