Deloitte and Docusign’s new report, Unlocking the Value of Agreement Management, surveyed more than 1,000 business leaders worldwide to uncover the biggest problems across the agreement process. The report analyzes the pain points, value drivers, and possible solutions across the agreement cycle to help businesses thrive in today’s environment, including:
- The surprising risks behind poor agreement management;
- The critical capabilities essential to the next generation of agreement management solutions; and
- The holistic approach organizations will need to take to address poor agreement management effectively.
A high cost to poor agreement management
Deloitte found poor agreement management practices and systems cost organizations nearly $2 trillion in annual global economic value with value destruction happening unevenly across functions, but with an overwhelmingly negative impact on customer and partner relationships. The key findings:
Disconnected workflows are the root cause of poor agreement management.
- On average, companies spend an extra 18% of their time on agreements, resulting in over 55 billion hours wasted globally per year.
- An agreement can undergo 15+ handoffs internally before any counterparty negotiation.
- Customer-facing functions like sales and marketing contribute 40% of the global value loss, driven by missed revenue opportunities such as delayed deals.
- In contrast, support functions represent 60% of the value loss due to time wastage and operating costs.
- 48% of businesses reported their customer relationships deteriorated significantly due to agreement delays.
- 66% reported inefficient agreement workflows as a driver for negative customer satisfaction.
- Seamless collaboration across stakeholders, Al-enabled search and analytics, up and downstream process integrations with applications and databases, and persona-based workflows are opportunity areas to prioritize.
- 2 out of 5 companies are looking for solutions with smarter capabilities, and more than half plan to increase spending on agreement management solutions over the next three years.
Pain points by stage of the agreement journey
To better understand the problem, Deloitte first created a standard framework of the way modern teams complete agreements, deconstructing this end-to-end workflow into eight distinct stages: initiate, develop, iterate, negotiate, sign, inventory, analyze, and implement. And in speaking with respondents, it became clear that not only were agreement management issues pervasive, they caused problems at every, single, step.
Examples from each step of an agreement workflow:
Initiate: 62% of respondents struggle to locate and access previously approved contracts for reference
Often, the easiest way to start a new agreement is to review completed agreements— whether with the same company or for a similar service. But if those documents can’t be found, they won’t be useful. New agreements have to be created from scratch, which requires a lot more upfront resources and could also translate to additional cycles of internal review in later stages.
Develop: 45% of respondents have to manually add information to contracts that already exist in systems
Any time contact preparers manually complete work that could be automated, they’re wasting time. They’re also introducing opportunities for errors if data isn’t copied completely or is pasted in the wrong location. While a slight majority of the respondents had built an agreement process that automatically fills agreements with existing data from systems of record, nearly half still need to prioritize that step to catch up.
Iterate: 50% of respondents face tedious, inefficient, and repetitive legal and compliance approval processes
The long and tedious delays that are often part of those legal and compliance processes are avoidable. Modern teams can make better use of pre-approved templates or clause libraries to give agreement creators the tools they need to self-serve. More robust agreement technology won’t cut legal and compliance out of the review process — rather, it will save them critical hours by reducing the amount of unique text they need to review.
Negotiate: 34% of respondents have to manually read, interpret, and understand the impact of terms within agreements
Agreements can be long and difficult to read - full of legal language. When non-legal business stakeholders are assigned to focus on specific sections, they need some kind of context about what’s in the other parts of that agreement. This is an easy opportunity to start using AI. It can generate fast, accurate summaries of long blocks to text so each person can focus on the terms that are relevant to their expertise.
Sign: 52% of respondents have to wait for identity and notary verification, which risks deal closure
How many times have you heard that time kills all deals? It’s undeniably true and steps like identity and notary verification — a critical part of some high-value deals — can sometimes slow you down. If your team hasn’t proactively built a streamlined solution to those processes, you’ll end up with long delays. In some cases, that long wait might mean the deal falls through entirely.
Inventory: 49% of respondents believe they spend too much time searching for completed agreements
Centralizing every team around a single digital repository is an easy solution, but the idea of digitizing large catalogs of existing agreements can be daunting. This could be another opportunity to implement AI to offload some intimidating transition work. Modern AI can scan a range of file formats (PDF, jpeg, etc.) and turn the text into a series of filterable data points. Not only is the agreement easier to find, but it can also be sorted or filtered by date, dollar amount, agreement type, and more.
Analyze: 54% of respondents have to manually track and analyze key terms, deadlines, renewal dates, and enforcement needs
Any time your team has to manually track agreement terms, you’re adding steps to the workflow that slow down the process and introduce room for errors. There’s a better way. All of the data points in your agreements should be available directly to your other business systems so automation can simplify routine tasks.
Implement: 45% of respondents lack the tools to track, search, and analyze past agreements
To create and commit to the most advantageous agreements in the future, your team needs visibility into agreements from the past. A key element is the ability to search through those documents to pinpoint specific terms and track performance against commitments. When the agreement nears expiration, your team will be prepared for a renewal decision and possible negotiations.
In this report, Deloitte adds up these agreement inefficiencies and translates the value loss into dollars and hours. It’s powerful and instructive for anyone looking to get more business value from their agreements. If you want to learn more, download the Docusign and Deloitte Digital Agreement Management Study report.
The report includes ways to modernize your workflow and Docusign can help make every step of the agreement process smarter for organizations like yours, so you can accelerate revenue, reduce risk, and unlock value. That is why we announced a significant expansion of our company strategy, opening up a new SaaS category—Intelligent Agreement Management—and new Docusign IAM platform to lead the way. Docusign IAM solutions are available starting on May 30 in the U.S. and will roll out internationally starting later this year.
