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Where automation adds real value

In just one year, a well implemented contract management tool

saved the small startup company a massive  $52,000

all while delivering a better product to happier customers. 

Victoria in the small Ops team had been tasked with the contracts for an 'add on' product. Customers were vetted for eligibility by the risk team once sales had referred them. The ops team then produced and recorded the agreements which needed legal and finance approval. Each contract was touching 7 different systems, 5 different teams and there were often errors or agreements left unsigned. 15 contracts a day, taking at least 15 mins each and 20% went unsigned. Add up the time spent in one year, and you're left with the math that 50% of Victoria's time was given over to these contracts, with 20% of it being wasted on unsigned agreements. 

 

Let's think about the cost to the business of each day of these contracts. Assuming every staff member is on an annual salary of $70,000. 

 

Sales: Speak with risk to verify customer and approve commercials (5 mins) x 15 = 1 hr 25 mins 

Risk: Review customer in system and check commercials, respond to sales (10 mins) Time for response: 24 hours x 15 = 2 hrs 50 mins per day

Sales: Message Ops to request contract, give customer details and share commercials (5 mins) x 15 = 1hr 25 mins per day

Ops: Review customer in Risk held register, collate company details, update company systems, find customer authorised signatory in sales tool, update sales, send contract to customer using online signing tool, following up with customer, storing signed contract, updating sales and updating internal systems to activate product (15 mins) Time for response: 24 hours

3 hours 45 mins

Customer: Receives emails verifying purchase, and signatories, asking questions when there's gap in Ops knowledge. Receives separate communication asking for signed agreement. 

 

9 hours 20 mins = $316.31 x 5 (week) = 1,581.55 x 52 (Year) = 82,240.6

20% of which was wasted by non-committed customers

Total turnaround time - same day

Cost of implementation (including business training scoping etc) = $3,500

Tool cost (for that workflow) = 7,500 including licenses. 

Time now taken by business =  5 mins  x 15 - 45 mins= Sales request via tools - through to signature . 5 mins approval each (1 per day) for risk, finance and legal teams (30 mins) for non-standard requests. 90% of agreements being signed same day. all contracts being signed- no wastage cost. 

Total time per day - 1 hr 15 mins = 

33.65 (1 hour of time)  = $42.06 x 5 (week) = 210.31 x 52 (Year) = 10,936.25 

Total cost post implementation: $21,936.25

Total wastage = 0

TOTAL savings = $60,304.35

15 x 5 x 52 = number of customers taking product boost every year =  3900

Net income assuming product makes $300 from each customer over the year customer income is 1,170,000

ROI (old way) 1300% (for every dollar you get 13 dollars

ROI (New Way) 5200%

4 x ROI on new way + ability to scale 75% cost reduction and made same amount of money, in other words 4 x higher ROI 3900% Higher ROI 

 


"This is not what I thought it would be" said Victoria, about her job. "There must be a better way." 

When we reviewed the contracts 90% of the contracts matched each other exactly and that 90% was always approved by risk. 

Victoria didn't know that the company had implemented a contract management tool for a different workstream 6 months earlier, with great success. Victoria's add-on contract was a great candidate for this tool and so in just 2 days a workstream was created. Contracts could be generated, updated, signed and stored all within this tool. Even better, Sales could request them straight from the tool, risk, finance and legal could all approve them if they needed to - meaning that Victoria wouldn't even need to touch them anymore. 

The results of this implementation were staggering. 

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