Delivering Next-Generation Agreement Experiences Today
In my role as CTO at DocuSign, I spend a lot of time thinking about the future of agreements. But not as a passive observer. At DocuSign we’re actively helping build that future by transforming the agreement process to deliver impactful, next-generation experiences today. Our digital-first world demands it.
Business is built on agreements. Agreements codify virtually every business relationship, from personnel and procurement to partnerships and property. At DocuSign, we’re focused on making the entire agreement process—including creating, signing and managing—faster and easier for your customers and employees.
DocuSign is known for pioneering electronic signatures—a technology that transformed the contract signing process. But organizations do so much more with agreements than just get them signed.
Consider the transition from paper contracts to PDFs. It helped us retire fax machines and interoffice envelopes for the speed and convenience of sending and receiving contracts digitally. However, those PDFs are little more than pictures of a paper contract and are no easier to understand.
Without spending precious time carefully reading and analyzing each word, there’s no way to quickly understand the parties involved, relevant dates, obligations or financial terms. And even then, it’s still incredibly difficult to identify areas of risk within the terms and validate the accuracy of the data. When that time-consuming task is multiplied across a large volume of contracts, it’s easy to imagine how error-prone and inefficient it is to manage PDF contracts.
What the research says
Clearly, when an agreement functions as a digital snapshot of a paper agreement, businesses lose out on the promise and benefits of digitization. DocuSign regularly researches this topic, seeking to understand the challenges organizations face—and how best to solve them with technology.
Here are a few striking stats from our recent Contract Management Trends 2022 research that speak to these challenges. Respondents reported spending:
- 45 minutes, on average, to find a completed contract
- 1 hour and 24 minutes, on average, to find specific information in a contract
- Over 23 work hours—more than half a workweek—to draft, edit and approve a contract before the signing phase
Remember, these numbers represent time spent working on a single contract. Now consider the frustration associated with each of these manual, laborious tasks. DocuSign can significantly improve these experiences with smart technologies and a digital-first approach.
Digital transformation for a digital-first world
Most business content is now created digitally, and much of it will stay digital forever. So why should contracts remain static representations of paper?
The implications are paradigm-changing. As an example of how dramatically a digital shift can improve our everyday lives, think about a different paper-to-digital transformation we all underwent not long ago.
Back in 2009, Google Maps brought turn-by-turn navigation to everyone’s smartphones. The switch from paper to digital, interactive maps transformed our travel experience forever. Navigation apps use map information that’s been turned into digital data points to create a faster and easier way to navigate, spawning new business sectors like ride-hailing services and food delivery.
Smart agreement technologies can do the same for the agreement process. Contracts can be turned into easily referenced data points to be used by other smart technology to automate and accomplish repetitive tasks—such as triggering billing and payment processes from a PO number or initiating a background check from an applicant’s personal information.
And like digital map technology, smart agreement technology will evolve, creating new possibilities for contracts and the business processes centered around them.
Delivering next-generation experiences with smart agreements
Smart agreements are digital-first contracts that are inherently easier to understand, more actionable and more easily extended to other systems.
Here are three aspects of our smart agreement development:
1. Capturing the key elements of a contract as structured data points
Critical elements of a contract—like parties, obligations and payment terms—can be captured and automatically saved as separate data points right from the start. Then, as the contract moves through the review, negotiation and signing phases, the points can be updated and additional points captured if necessary.
In addition to making the contract easier to search and analyze, structured data points also greatly simplify the use of the data in integrations, providing the access and standardization needed to synchronize across different systems.
Organizations in industries with unique terms can benefit from having consistent data fields. For example, the HL7 standard in the healthcare industry provides a foundation for your doctor and hospital to exchange information. By mapping to standards like these, we can make contract data far more extensible and actionable.
When these structured data points are captured during contract creation, they become true digital assets to the business.
2. Leveraging the power of AI to analyze contracts
Organizations increasingly use AI to uncover hidden risks and opportunities and extract intelligence from existing assets. AI can reveal valuable knowledge from the variety of contracts essential to any business's successful operation. Contracts are brimming with data waiting to be converted into actionable insights that can drive smarter business decisions.
DocuSign AI includes hundreds of pre-built machine learning models that can analyze contracts before and after signature, on an individual basis or across entire portfolios.
Our AI can interpret not only the content but also the implications of the contract’s clauses. For example, beyond identifying the existence of a data privacy clause, DocuSign AI can answer specific questions about that clause, like:
- Are there data privacy notice requirements?
- Does it address incident response plans?
- Is there a duty to destroy confidential information?
By harnessing the power of DocuSign AI to augment or replace manual contract analysis processes, some of our customers have saved literally hundreds of millions of dollars in operating costs.
But our mission with AI doesn’t stop there. We’re working to make AI readily available to organizations of all sizes by making it easier to implement and adopt. We’ll deliver DocuSign AI as a scalable, efficient service that can bring value to any DocuSign application, across the entire agreement process.
3. Embedding programming code within contracts
Code embedded in a digital contract can monitor for a set of conditions and trigger an appropriate action—without manual intervention. This is when digital agreements become smart agreements, and really start to show their value.
One such example is contract renewals. Often, when a contract is up for renewal, the business owner has shifted roles or left the company. Embedded code in a contract can monitor key data points like renewal date and business owner. It can automatically and proactively notify legal and other teams when a contract that’s up for renewal is no longer assigned to an active business owner. They won’t be caught off guard and will have time to prepare for the upcoming negotiation.
Another valuable use case can be seen around a contract for a transport driver. The embedded code can look at data points like driver’s license and insurance information and automatically verify them periodically via third-party services. This streamlines the agreement process and potentially reduces the risk of non-compliance.
The use cases for embedded code can get more sophisticated over time as the structured data set grows. They can be designed for specific industries or individual lines of business. And they can connect with the multitude of internal and external systems your teams are already using.
Smart agreements are a leap forward
Smart agreements remove the constraints imposed by static paper or PDF contracts. Our goal is to infuse AI into every stage of the agreement process to make it faster, easier and more intelligent. The next generation of the agreement experience is here, and it’s natively digital, active and available anywhere at any time for any authorized process.
To learn more about how our next-generation agreement technologies can help your business today, watch my recent talk, “Providing Next-Generation Agreement Experiences in a Digital-First World.”