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article imageInterview: Why businesses need automated contract management Special

By Tim Sandle     Sep 26, 2017 in Business
Ninety-two percent of businesses report that human error impacts their contract management process. To avoid this automation is needed. To find out how we spoke with Erik Severinghaus, chief strategy officer at SpringCM.
The high proportion of businesses reporting that human error affects the contract management process, comes from a recent survey conducted by SpringCM. Challenges within contract management can cause deals to halt and destabilize partnerships. The findings show that such errors affect businesses of all sizes and across all industries.
There are steps that businesses can take to reduce human error and improve their contract management process. The answer is to integrate automated processes. For example, automated contract management solutions can eliminate human error and reduce the contract cycle time to days instead of months.
To explore the benefits of automation, Digital Journal spoke with Erik Severinghaus, who is the chief strategy officer at SpringCM. SpringCM is a workflow collaboration and document management platform used by more than 600 companies.
Erik Severinghaus  chief strategy officer at SpringCM
Erik Severinghaus, chief strategy officer at SpringCM
Erik Severinghaus
What is human error?
Digital Journal: How do you define human error? Does it impact on every aspect of business?
Severinghaus: "Human error is an unintentional mistake made by a person. This impacts every area of a business because every department requires some element of human touch. Most often, tasks that require less thought, such as keying in dollar amounts, addressing an envelope or writing down a due date for a task, are the most highly impacted by human error. While these may seem like small things, they can result in detrimental effects. Take Amazon, for example. In March, an employee unintentionally took more servers offline than intended, which created a domino effect and resulted in hundreds of millions in lost revenue for businesses that were pulled offline in the outage."
El Jueves website error message
El Jueves website error message
El Jueves
DJ: How can companies best minimize the impact of human error?
Severinghaus: "The best way to minimize human error is to automate simple processes and reserve human judgment for the tasks that really need it. Not everything needs human oversight; for example, a machine can be programmed to assign contracts to folders and send reminders to the necessary contacts for review and approvals. However, the flipside of this is also true; not everything can be automated. Automated tools should be implemented in a way that assists, rather than replaces, human workers."
How can automation help businesses?
DJ: What are the advantages of automation in general?
Severinghaus: "The two primary advantages of automation are to help work flow faster, and to ensure confidence in the process."
DJ: What are the advantages of automating contract management?
Severinghaus: "Automation in contract management reduces frustration and increases efficiency. One example of how automation helps contract management is that any repetitive task (such as moving a contract from a Pending to an Approved folder after it’s approved and archiving it after a certain amount of time) can easily be automated within a workflow through SpringCM. Additionally, custom tags can be created that sync with Customer Relationship Management (CRM) systems, like Salesforce, and automatically link to certain documents to aid in tracking and reporting."
DJ: What solutions do you offer for this?
Severinghaus: "SpringCM provides a contract management solution and a document management solution. Both solutions have a central repository, enabling employees to store, search and share contracts without hassle. We also have a Doc Launcher, which houses document templates that each company can customize to speed up the document generation process."
"The contract management solution has more specific tools to assist with contract management. The solution enables employees to route documents to the approver when a signature is needed, without having to track them down, create clause libraries for approved clauses and send renewal reminders. It also has in-depth tracking and reporting tools to identify problems and bottlenecks."
Office block in London.
Office block in London.
DJ: What has been the take-up of your technology? Which types of businesses do you sell to?
Severinghaus: "We work with a variety of different businesses across all industries, from publishers to marketing agencies to government organizations. Document and contract management is necessary for every industry and company size because everyone deals with contracts in some capacity, whether it be new hire onboarding or NDAs. Some of our more well-known clients include Valvoline, Spotify, Uber and NBCUniversal."
Developing the technology
DJ: What was the most difficult challenge in the development of your technology?
Severinghaus: "For technology like ours, there is a ton of complexity behind the scenes to make it work. Because we handle hundreds of millions of documents, we must make sure the system can scale seamlessly. Because our clients include defense contractors, banks, and the federal government, we have to ensure there are incredibly robust processes and technology controls for data security and integrity. Whereas many cloud companies can live by the mantra of “move quickly and break stuff”, we are always focused on the second-order effects of any decision we make on the security, resiliency and scalability of the platform."
Learning from a thought leader
We took the opportunity to ask Severinghaus about his experience and how he got into the industry.
DJ: How did you get involved with business? What did you study at college?
Severinghaus: "I taught myself programming starting in second grade and have been an active part of the Open Source movement since 1998. I began studying business at UNC's Kenan-Flagler Business School and received my MBA in Entrepreneurship from Northwestern's Kellogg School of Management."
DJ: What is your previous business experience?
Severinghaus: "Prior to leading strategy at SpringCM, I was founder and CEO of SimpleRelevance, a highly acclaimed machine learning platform to optimize digital marketing. In 2015, SimpleRelevance was acquired by Rise Interactive, where I led the account strategy and personalization business units. Before that, I had a varied career that included 6 years at IBM building new products and services, helping found iContact, a leading email service provider, and a stint building Papa John’s Pizza franchises."
The future of business
DJ: What else are you working on?
Severinghaus: "The most interesting part of my job is getting to focus on building out our next generation use cases. We have some incredibly cool technology that we are bringing to market which will allow AI to understand and negotiate contracts, the integrity of which we can verify using blockchain. Automated, smart contracts that enable transactions in an ecosystem driven by the Internet of Things is another fascinating use case that we’re working on. New developments across a variety of technology fronts all impact contract management and workflow automation, so there’s never a dull moment."
DJ: What other business or digital technologies interest you?
Severinghaus: "As you may have gathered from my background, I’m a bit of a polyglot when it comes to emerging technologies. Being part of the maturation of Artificial Intelligence fascinates me, as does the continued growth of microservices architectures that can be combined to do new and fascinating things. So much of the value that our clients get from Spring comes from integrations with our ecosystem partners, and we expect that to continue."
"I think one of the most under-rated areas of evolving business technology is in compliance and obligation management. Whether it’s GDPR, ASC606, Sarbanes Oxley, or a variety of other rules and regulations, compliance is increasingly becoming a front-of-mind concern for executives. As our legal frameworks struggle to catch up to the technology ecosystem, that trend is only going to accelerate."
The application of automation, along the lines of SpringCM's solutions, reduces errors, as seen with the example of contract management. The application of automation can also lead to cost savings fro businesses.
More about automated contract management solutions, Contracts, Automation
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