In today’s business, where digital transformation is crucial to stay competitive, digital contracts have become a central part of company workflows. Through e-signature and contract management platforms, digital contracts have revolutionized how businesses manage and protect their contracts. But how does digital contract affect your company’s return on investment, and why are they so important for a more efficient business process? In this article, we will dive into how digital contracts can increase business efficiency, lower costs, increase revenue and thus improve your company’s return on investment.
Digital contracts – an overview
A digital contract is a binding document that is created, signed and stored digitally. Compared to traditional contracts, digital contracts have several advantages, such as a faster signing process, better security and easier tracking. Tools such as Oneflow, DocuSign and Adobe Sign have made digital signing both secure and legally valid, and they are used in a wide range of industries, from small businesses to large international corporations.
How digital contracts affect return on investment
För att förstå hur digitala avtal bidrar till avkastningen kan vi analysera de tre viktigaste aspekterna: kostnadsminskningar, intäktsökningar och effektivare resurshantering.
1. Cost savings
Digital contracts are a smart solution for companies that want to reduce their costs and thus generate returns by cutting down on their operating expenditure (OpEx). There is no need for extensive manual work as everything is handled digitally. Traditional contracts through different systems such as e-mail and PDFs can be an expensive affair when you factor in the costs of labor, storage and document control. By digitizing the entire workflow, these costs are significantly reduced, as the process is automated and takes place online. According to a report by Aragon Research, companies can reduce their administrative costs by up to 75% by digitizing the contracting process.
In addition, security is enhanced when digital contracts are managed with advanced security measures such as encryption and user authentication. This reduces the risk of important documents being lost or accessed by unauthorized parties, which can otherwise lead to both financial and reputational damage. With automated monitoring and verification of digital contracts, companies do not have to spend as much time and resources manually checking that contracts are valid. This leads to further reductions in administrative costs and more efficient management of business contracts.
2. Increased revenue growth
Digital contracts enable faster business decisions and shorter sales cycles, which can have a direct positive impact on company revenue. In a traditional contract management process, the signing process can take days or even weeks, as documents are sent back and forth between parties. With digital contracts, documents can be signed and approved in minutes, no matter where the parties are. This speed means that businesses can secure deals and start projects faster, which in turn can lead to faster revenue generation and increased returns.
Another major benefit is the improved customer experience. Customers can easily sign contracts digitally, making the whole process much smoother and faster. This ease of use contributes to a better business experience, which can improve customer satisfaction and ultimately lead to revenue expansion. A satisfied customer base is an invaluable asset for businesses, especially in B2B, where long-term relationships are crucial for stable revenue growth, and thus positive returns.
3. Efficient resource management and increased productivity
Digital contracts save time and resources that would otherwise be spent on administering and managing contracts. By automating tasks such as reminders, document tracking and archiving, businesses can focus on more value-adding activities. This means that staff can spend more time developing new business opportunities instead of getting bogged down in administrative tasks. This increased efficiency and productivity allows the company to create more value with the same amount of resources, which positively impacts return.
Furthermore, productivity can be further increased by integrating digital contracting systems with CRM and ATS systems, such as Salesforce, Hubspot, and Teamtailor. Through integrations, users can quickly work within the same interface with real-time data without having to switch between systems.
Read more: What is sales automation? A complete guide
Using data from digital contracts for business strategies
Another great benefit of digital contracts is all the data that can be collected and analyzed to improve the company’s business strategies. With digital contracts, companies get detailed statistics on how often contracts are approved, how long it takes and which points are most frequently adjusted. This data can then be used to identify bottlenecks in the sales process and adjust strategies to speed up future deal closures.
Data from digital contracts can help companies fine-tune their pricing strategy by analyzing which terms and prices customers most often accept or want to change. With these insights, businesses can better adapt their offers to meet market demand, thereby increasing the chances of closing deals.
Security and compliance: key factors for digital contracts
Security and legal compliance are important as businesses move to digital contracts. Electronic signatures can be secured with multiple layers of encryption and authentication, reducing the risk of unauthorized access. In addition, all changes and events related to the contract are stored in a digital log, creating a transparent history of each step in the contract process. This is not only important to ensure that the contract is legally binding, but also to comply with rules and laws around document management.
By using digital contracts that comply with current rules and standards, businesses can avoid legal issues and costs linked to non-compliance. In addition, many digital contract platforms are designed to comply with international regulations such as eIDAS in Europe and the ESIGN Act in the US, making them ideal for global business.
Summary: generating returns on digital contracts
Digital contracts are much more than just a way to streamline contract management. They are a strategic resource for businesses looking to increase their return, efficiency and competitiveness. By reducing costs, accelerating revenue generation, and streamlining resource management, digital contracts offer many financial and operational benefits that directly impact a company’s profitability and long-term success.
Investing in digital contract management is a smart long-term strategy to ensure your business is ready to handle future growth and market changes. With the right tools and processes, companies can use digital contracts to provide value to customers, improve operational efficiency, and build stronger relationships in a global marketplace. All of this has a positive impact on a company’s ROI and growth potential.