By Tracy Fawcett
Now more than ever, technology manufacturing has become a global industry where players are focused on expanding to new markets and building their product portfolios to meet the international customer’s needs. For forward-thinking technology manufacturers, this goes beyond developing scalable hardware and software. It also means understanding how service contract information is transported, stored, and signed for electronically and whether there are country-specific compliance factors that could derail enforceability of a contract.
While the IT industry’s rapid globalization can be great for OEMs’ profits, it poses a variety of risks and challenges, specifically: the legality of service contracts as they extend across country lines.
Despite the variety of data that must go into generating legal contracts, many IT companies’ legal departments still rely on broken, manual processes to draw them up – wasting time and money and increasing the chances of error and compliance risk as a result.
For an industry hyper-focused on profitability, it’s surprising how few technology OEMs understand the implications of poorly managed legal contracts on bottom lines. Mismanagement in this area can hamper the effectiveness of other business units while costing the company money. In the end, technology manufacturers may ask themselves: was this rapid growth really worth it?
As OEMs begin to understand the complexity that is global contract management, legal contract automation tools are moving from a “nice to have” to a “need to have.”
Factors to Consider When Evaluating Legal Contract Automation Solutions
Here’s the good news: the market for legal contract automation tools is growing. But not all solutions are created equal.
Technology manufacturers with complex channel structures require equally robust resources to support their niche legal contract needs. Here are a few key factors businesses should look for when evaluating legal contract automation platforms:
- IT industry expertise: Legal contracts are the lifeblood of every industry, but that doesn’t mean that they’re interchangeable. When searching for automated legal contract tools, it’s essential to find a provider with a track-record in the tech industry. A third party that understands your unique sales cycle, business model and standards is better positioned to transform your contract creation process.
- Global support: A client’s location does more than determine where you send an invoice. Each country has unique data and payment regulations that dictate how legal contracts can be drafted, transmitted and approved. Any legal contract management tool you consider should be able to support these region-specific factors, as well as multiple languages and currencies.
- Service combination flexibility: Basic templates are no match for the variety of quote types (e.g., manufacturer to distributor, distributor to end customer, etc.), products and services, and billing details that factor into international organizations’ contracts. Look for automated contract solutions that are flexible enough to accommodate these nuances – and the infinite combinations they exist in.
- Dynamic creation: A truly automated legal contract automation solution requires minimal intervention from sales and legal staff. With only a few inputs, the right legal contract management platform should be able to detect and instantly insert the appropriate clauses and terms for the quote being converted.
- Scale: OEMs seek out automation to scale renewal revenues without increasing headcount or transaction costs of legal counsel. To ensure customized legal contracts are financially enforceable, technology manufacturers should look for a tool that allows them scale without increasing costs significantly.
To compete in a high-volume, low-margin warranty renewal business, OEMs and their channel partners are transforming services to match the terms and nature of how their country-specific customers want to receive services. While there are many risks involved in extending value-add services in a global market, one of the greatest is whether country-specific contracts are financially and legally enforceable.
Luckily, Managed Maintenance’s quote-to-contract platform ONEview automatically builds quote-driven, unique legal contracts on-the-fly for OEM and channel partners. This level of automation allows manufacturers and channel partners to create legally binding, country-specific contracts without increasing headcount or hiring outside legal counsel. Most importantly, ONEview speeds up the contract creation, review, and approval process, decreasing downtime and improving bottom lines.Large IT organizations have plenty to worry about, but legal contract creation shouldn’t be one of them. Contact Managed Maintenance to learn more about how our ONEview platform takes the headache out of legal contract automation and contract management.