The business landscape is headed toward a new normal due to the global coronavirus pandemic. Companies are relying more and more on digital channels to do business where work is accomplished through remote means.
Currently, this rapid digital adoption is manifesting itself through work-from-home programmes and e-commerce adoption, but companies must be prepared to shift more of their processes and workloads online to cope. Governance is one such business area that companies must seriously consider prioritising. Tasks involved in strategic discussions, policy making, and business agreements demand secure collaborative platforms to perform digitally.
We recently spoke with governance solutions provider ContractZen CEO, Markus Mikola, who shared his thoughts on how businesses will go about governance using technology and digital tools as the new normal takes shape.
We’re set to be living in a new normal these days due to the coronavirus pandemic. How do you think the business landscape will change, and what will become the new normal for us from here on out?
There’s certainly plenty of uncertainty going around. Companies are struggling with business continuity, so they must find creative ways not just to survive but also to thrive. We all need to adapt to new ways of doing things quickly.
Doing business online will become the norm. We’re seeing it in how aggressively companies are putting remote work measures in place. Previously, e-commerce was perceived to be more for B2C companies but now, even B2B ventures have to rely on digital channels to reach out to their customers.
The lack of face-to-face interactions can make it challenging for everyone to adjust. Sales teams have to find ways to close deals without physically being with customers. Even business leaders who do their work in the boardroom have to cope.
It’s great that there are plenty of tools and solutions that are now available to help companies digitise their workloads. In shifting governance tasks online, it’s essential to have ways to digitise document management, hold productive meetings, and share and collaborate on documents and assets.
‘We all need to adapt to new ways of doing things quickly’
Governance has always had its challenges even without the constraints of a global pandemic. With the pandemic, what new issues would ContractZen expect businesses to face in this regard?
Well, it’s true that even without the coronavirus pandemic, organisations may have already found governance to be quite challenging to manage. A part of effective management is maintaining due diligence. Ultimately, good governance creates trust among all stakeholders of the company, both internal and external. Trust is built through transparency and accountability. This is true for any organization regardless of size.
Interestingly, what appears to be routine tasks such as record-keeping and documentation are actually critical to nurturing trust. Properly maintaining documents such as contracts and financial documents, keeping and sharing accurate minutes of board meetings, and even properly archiving memos and policy changes are all essential to the process.
Many companies, however, still rely on manual record-keeping and prefer to maintain physical copies of these documents. If ever these documents are digitised, the files are often scattered across various staff and departments. There may be no centralized repository where staff members can conveniently access information.
Now, imagine having to suddenly need to submit to an audit or enforce an agreement while working remotely while not having physical access to these documents. It would also be quite difficult, if not impossible, to do.
One of your solutions focuses specifically on contract management. Can you share how shifting to remote work can have an impact in this area?
Contract management is a one of the key aspects of governance. Leaders should always know what they are legally committing themselves to. Unfortunately, this is one area that’s often overlooked when digitising workloads.
Contracts typically require a lot of human input and settling on a final version of a draft may take a lot of back-and-forth between parties. Companies would have to find ways to effectively and securely collaborate during the drafting process. Otherwise, they may end up with error-filled contract drafts.
Agreements are also often concluded through face-to-face interactions. This simply can’t be done during the pandemic. This results in a slowdown in the review and approval process. Some decisions might even be stalled or cancelled entirely should parties find no means to get things done. This can be quite problematic since it’s essentially to quickly respond to the changes in the business landscape.
Fortunately, contract laws in most territories now recognise the validity of electronic signatures to legally bind parties. At least there’s a way parties could formally seal the deal remotely.
Manual storage and management can also lead to missed deadlines and overlooked milestones. Considering the many changes due to the pandemic, employees may easily forget about contracts that are left inside file cabinets in their workplaces, leading companies to miss the fulfillment or enforcement of time-bound terms.
How will technology be able to help them overcome challenges in this area?
Digital solutions can help parties manage the entire contract management workflow. Users can utilise rule-based templates to draft consistent and error-free contracts. Through these, they can simply plug important details into input fields to ensure that all documents contain accurate and updated information.
Custom rules can also be set so that certain terms only become included in the document when the right conditions are met. This guarantees that only pre-approved terms are made applicable to the current context.
Parties who can’t meet in person can also electronically sign their documents to conclude negotiations. The signed documents can also be tagged with relevant metadata and archived in a cloud-based repository to help companies search for documents. This allows companies to quickly access relevant documents and to securely share them with partners.
Notification features can also be helpful. Alerts can be sent to all concerned parties about time-bound conditions such as upcoming renewals, expiries, and milestones.
A streamlined workflow using capable digital tools ensures error-free results, minimal back-and-forth between parties, and timely enforcement of terms.
Meetings and agreements are often ideally made through face-to-face interaction. Will digital solutions such as ContractZen be able to deliver similar results or perhaps make better?
There’s still nothing quite like face-to-face conversations when it comes to richness of communication. A great deal of information is communication through nonverbal means, and you only get to observe those by being physically present with the other party.
However, social distancing forces us to rely on digital means such as video conferencing, online collaboration, and document sharing to get deals done. These could be further enhanced through new capabilities that make the process convenient and secure.
For example, digital tools can be used to schedule meetings and automatically notify and remind attendees. Meetings should also be collaborative so it’s great that certain solutions now allow video conferencing among dozens of users, meeting recording, and screen and document sharing. Meeting minutes can even be reviewed online and sent to attendees which can also be signed by electronically. These allow for more efficient meeting processes.
In the case of mergers and acquisitions or investment deals, for example, parties often have to dive deep on confidential information such as financials, corporate documentation, and intellectual property. Virtual data rooms that can be used to share these documents privately and securely between transacting parties. Files shared through these data rooms are encrypted to keep them safe in case of a breach. In addition, access and changes to documents are logged, providing a transparent audit trail for transacting parties.
Small-to Medium-sized Businesses (SMBs) are among those heavily affected by the crisis. Will adopting a governance solution make sense for them financially?
In times like these, businesses may have to prioritize their budgets. However, they must also take into consideration that ignoring certain workloads such as good corporate governance may be more costly to deal with down the line. For instance, contract disputes can cost small businesses tens of thousands of dollars in legal fees to deal with. Missing out on required compliance audits and reports can also result in significant fines. These are definitely issues that no business would want to deal with during a pandemic.
It’s great that many providers have now adopted the software-as-a-service or subscription model for their solutions. This allows even smaller operations to access enterprise grade solutions without having to commit significant portions of their budget or capital upfront. Gone are the days of having to deal with lengthy procurement processes in order to adopt business solutions. Companies can simply instantly sign up to use tools. They can even quickly scale up or down should their usage changes.
There has also been a rise in cyberattacks during the pandemic. How confident should businesses be when using online solutions? How does your solution manage data security and confidentiality?
All apps and software that companies adopt should be properly vetted as these can have vulnerabilities that hackers can exploit. Of course, it will be wise for companies to also put in place security measures and implement stringent security controls. For ContractZen, we run on Microsoft Azure’s cloud computing platform which complies with EU’s strict data privacy laws and meets all important international and industry-specific compliance standards.
User error can lead to their files being corrupted or deleted, but ContractZen has continuous geo-backup capabilities to enable point-in-time file restores. Our ContractZen solutions also use AES-256 encryption to encrypt data and keep them secure. Companies can also monitor all activities in a browsable audit log so they can do their own checks and review any suspicious activities related to their accounts.
Are there any other interesting developments in the offing for ContractZen?
We at ContractZen are constantly improving our solutions and exploring potential synergies in order to deliver value for our clients and partners. Our recent collaboration with DocFusion greatly enhances the experience we provide to our customers as they can now enjoy intelligent and automated contract generation and a more streamlined workflow.
We’re definitely pursuing further enhancements to our offerings. These days, we would like for ContractZen clients to be able to overcome the challenges of digitisation and maximise the benefits as we all adapt to this “new normal.”