Final week, I visited a cutting-edge AI startup in Austin. Their product? Thoughts-blowing. Their contract course of? Straight out of 1995.
Right here’s what I witnessed: A possible enterprise buyer able to signal a six-figure deal. The gross sales group celebrated. Then authorized obtained concerned. Three weeks later, they had been nonetheless exchanging Phrase paperwork through e-mail, with model numbers like “Contract_v23_FINAL_FINAL_actuallyFINAL.docx.”
Sound acquainted?
The irony kills me. Firms spending thousands and thousands on digital transformation—implementing AI, automating workflows, transferring every little thing to the cloud—whereas their contract processes stay caught within the Stone Age. It’s like constructing a Tesla however insisting on beginning it with a hand crank.
The 1995 Downside Is Alive and Properly
In keeping with latest statistics, 77% of people stated AI will impression their work within the subsequent 5 years. But in some way, most tech corporations are nonetheless managing contracts like we did when Home windows 95 was revolutionary.
Right here’s what the standard “trendy” tech firm contract course of seems like:
Creation: Somebody opens Microsoft Phrase (in the event that they’re fortunate, they discover the correct template on the third strive).
Negotiation: E-mail ping-pong begins. “See hooked up.” “Please overview adjustments.” “Is that this the newest model?”
Approval: Print it out, stroll it to authorized, wait. Then to finance. Then to the CEO. Every with their very own timeline.
Storage: Reserve it… someplace. Shared drive? Somebody’s desktop? That folder labeled “Contracts 2024 NEW”?
Monitoring: “When does this renew?” Examine the contract. If you’ll find it.
I’ve seen corporations with AI-powered suggestion engines, refined knowledge analytics platforms, and real-time processing capabilities grind to a halt when somebody asks, “Can we get this contract signed by Friday?”
The Actual Price of Your Stone Age Contract Course of
Let’s speak numbers, as a result of that’s what makes CFOs concentrate. Analysis exhibits that automation halves negotiation cycles, decreasing inaccuracies and contributing to a $12 billion market. In the meantime, 40 per cent of a contract’s worth could be misplaced because of inefficient contract administration processes.
Take into consideration that. Practically half your contract worth, evaporating since you’re nonetheless treating contracts like paper paperwork in a digital world.
However it’s not nearly cash. Right here’s what actually occurs:
Time Theft: Your highest-paid individuals—legal professionals, executives, senior managers—spending hours on duties a well-configured system may deal with in minutes. I’ve watched VPs of Gross sales personally shepherd contracts by way of approval processes. That’s like utilizing a Ferrari to ship newspapers.
Innovation Paralysis: Whereas your group is busy being a human workflow engine, your rivals are closing offers sooner, iterating faster, and capturing market share. AI implementation has led to a 39% discount in contract lifecycle time, streamlining every little thing from drafting to approval.
The Compound Impact: Each sluggish contract creates a cascade. Gross sales cycles lengthen. Income recognition delays. Buyer satisfaction drops. Staff get annoyed. It compounds.
One tech firm I do know calculated they had been shedding $50,000 monthly simply in delayed income recognition as a result of contracts took so lengthy to execute. That’s $600,000 yearly—sufficient to rent a number of engineers or fund a brand new product line.
Why Tech Firms Are Significantly Unhealthy at This
You’d suppose tech corporations could be main the cost on contract automation software program. As an alternative, I see three patterns that hold them caught:
The Cobbler’s Youngsters Syndrome “We’ll repair our inner processes after we ship this characteristic.” Sound acquainted? Tech corporations are so centered on constructing merchandise for purchasers that they neglect their very own operations. Inside effectivity all the time takes a backseat to the following launch.
The “We’re Totally different” Delusion “Our contracts are too complicated for normal options.” “We’d like {custom} phrases for each deal.” “Our course of is exclusive.”
No, it’s not. You’re not particular. 90% of your contracts comply with the identical patterns. You simply haven’t taken the time to acknowledge them.
The Integration Paralysis “We’d like it to combine with our CRM, our ERP, our custom-built no matter.” Excellent integration turns into the enemy of progress. In the meantime, you’re hemorrhaging worth by way of your guide processes.
The 2025 Method: What Trendy Contract Administration Really Appears to be like Like
Right here’s the factor—fixing this isn’t about implementing some huge, complicated system. The very best transformations begin small and centered. When corporations ask me about implementing contract administration, I inform them the identical factor I realized constructing Harmony: you don’t wish to automate one thing till you’re positive it’s fixing your actual downside.
Trendy contract administration in 2025 seems like this:
Templates That Assume: Your contracts aren’t distinctive snowflakes. They’re variations on themes. Trendy programs acknowledge this, robotically populating phrases based mostly on deal kind, buyer tier, and your small business guidelines.
Negotiation With out E-mail: Modifications occur in a single place, with full visibility and model management. No extra “Which PDF has Sarah’s newest feedback?”
Approval Workflows That Stream: The proper individual will get notified on the proper time. Approvals occur in clicks, not conferences. Bottlenecks turn out to be seen instantly.
Intelligence, Not Simply Storage: Your contracts turn out to be queryable knowledge. “Present me all contracts renewing in Q2” takes seconds, not days. Obligations, deadlines, and alternatives floor robotically.
Begin Monday: Your 30-Day Fast Win Plan
Change feels overwhelming, however it doesn’t must be. Right here’s precisely the best way to begin:
Week 1: Decide One Contract Sort Select your highest-volume, easiest contract. For many tech corporations, it’s NDAs or commonplace gross sales agreements. Map the present course of. Time it. Doc the ache factors.
Week 2: Simplify Earlier than You Automate Earlier than you take a look at any greatest contract lifecycle administration software program, simplify your template. Take away redundant clauses. Standardize language. Get authorized and gross sales to agree on one model.
Week 3: Implement Fundamental Automation Begin with e-signatures and fundamental workflow. Don’t attempt to combine with each system but. Simply get contracts flowing digitally with automated routing.
Week 4: Measure and Develop Monitor time-to-signature earlier than and after. Share the wins. Then choose your subsequent contract kind.
I’ve seen corporations minimize contract turnaround time by 70% of their first month simply by specializing in one contract kind. One startup diminished their gross sales contract course of from 12 days to 36 hours. Their gross sales group actually threw a celebration.
The Future Is Already Right here (Simply Not Evenly Distributed)
Some corporations get it. I work with a SaaS firm that now generates and executes buyer contracts in beneath 4 hours, begin to end. Their gross sales group can shut offers the identical day they’re verbally agreed. Their rivals nonetheless take weeks.
One other shopper found $2 million in auto-renewing contracts they’d forgotten about—all as a result of they lastly had visibility into their contract knowledge. They renegotiated half of them and saved $400,000 yearly.
However right here’s what excites me most: We’re on the cusp of contracts turning into actually clever. Think about contracts that:
Mechanically alter phrases based mostly on market circumstances
Flag uncommon requests earlier than they turn out to be issues
Recommend optimizations based mostly in your historic knowledge
Join seamlessly along with your monetary forecasting
This isn’t science fiction. It’s occurring now at forward-thinking corporations.
Your Transfer
Each day you delay is actually costing you cash. Whilst you’re studying this, offers are stalling in your pipeline due to contract bottlenecks. Worth is leaking from present agreements you possibly can’t correctly observe. Your greatest individuals are losing time on administrative duties.
The businesses that win in 2025 received’t be those with one of the best merchandise alone. They’ll be those that may transfer quickest—and that begins with the way you deal with the basic constructing blocks of enterprise relationships: your contracts.
So right here’s my problem: Have a look at your contract course of proper now. Time how lengthy your final deal took from verbal settlement to signature. Calculate what number of hours of high-value time went into pushing paper.
Then ask your self: Is that this actually how a tech firm ought to function in 2025?
The reply is apparent. The one query is whether or not you’ll do one thing about it.
Matt Lhoumeau is the co-founder and CEO of Harmony, a contract administration platform utilized by over 1,500 corporations worldwide. Earlier than founding Harmony, Matt labored with Nicholas Sarkozy through the 2007 French presidential marketing campaign and later spent six months manually managing 1,000 vendor contracts at a significant telecom firm—an expertise that impressed him to rework how companies deal with agreements.
