6 KPIs to Evaluate the Performance of Your Contract Automation Software | AXDRAFT (an Onit company)

ByLance T. Lee

Mar 22, 2022

Avocados are known to be very old-fashioned and conventional. They can keep up with old school working patterns for ages, even if they stop working properly. That’s why, once they’ve taken the next step and embraced contract automation, they’re more likely to stick with it, even if it no longer meets their needs or helps them move forward. faster.

A recent Thomson Reuters report shows that 64% of law firm executives cited “insufficient use of technology” as a medium to high risk factor for profitability. At the same time, 91% of executives expect to optimize legal processes and use technology to reduce costs.

64% of law firm executives cited “insufficient use of technology” as a medium to high risk factor for profitability.

However, sufficient contract automation software should not just be a way to reduce legal costs, it should become a trusted partner. And treating him like a partner means evaluating his effectiveness the same way you would evaluate the performance of your team members. So how do you make sure your legal tech is doing the right job instead of over-complicating things? And what are the telltale signs to consider another solution? Let’s find the answers together.

Vanity Metrics: Lawyers’ False Friends

There is no fixed or ABA-approved list of KPIs to assess the performance of your document management software. But to be sure that optimizing your legal processes is going in the right direction and accelerating your team’s performance, tracking metrics is a must. At the same time, not all indicators and KPIs can tell the difference.

Some metrics can only confuse you, but don’t help you see the big picture. They are usually called “vanity metrics” and give nothing but a falsely inflated view of a company’s growth or potential. Here are a few:

Number of documents generated

· Number of billable hours

Percentage of contracts renewed

Delays in approvals

This does not mean that this data is useless. Definitely not. Yet, in most cases, it is not 100% relevant to show the actual performance of contract automation software. The easiest way to avoid vanity metrics is to clearly define what you’re measuring and why you’re doing it. The right KPIs can help you track the effectiveness of your contract automation software and understand the value it brings to your business.

KPIs for contract automation software: what, why and how to track

Here we have put together a list of key performance indicators to assess the performance of your contract automation software, which we hope will be useful to you for both:

· those who are already following them — by broadening their horizons;

· those who do not — by helping them to build a system of performance indicators.

1. Team Feeling Score

team happiness is one of the essential assets of any company. To make sure your team is working to their full potential, we suggest tracking the sentiment score related to software usage. You can get this by periodically running a small assessment survey that can be translated into data. A few basic rating scale questions may be enough, but if you want to get a clearer picture, we suggest preparing a software sentiment matrix.

Generally, on a scale of 1 to 10, the results you get could mean the following:

· 8+ means that your team is satisfied with the software used

· 6-7 means some minor tweaks are needed

· =implies that the team is having significant issues with the tool stack

We recommend to monitor the results in dynamics. If the score decreases over time, this could signal the need for intervention and action, as the software:

could have been awkward

no longer meets the needs of the team

became too complicated after some update

All of these things need to be tracked, communicated, and considered when extending the contract with the software vendor for another period.

2. Vendor Team Response Time

It’s no secret that every company’s document flow is unique. When working with contract management software, custom requests, changes or questions are only a matter of time. To assess the service from your contract management provider provides, you must answer the following questions:

· How long does a supplier team need to give you an initial response?

· How long does it take them to completely resolve the problem?

· Is it easy to find the right contacts for each member of your team?

High quality customer service is important for the seamless use of any contract automation software. Especially when your business is just beginning to automate the legal department. At AXDRAFT, we assign a Legal Engineer to each user. They usually respond within minutes whenever something comes up. This approach helps us to ensure that our customers are satisfied with the level of service we provide.

3. Frequency of software updates

The world of legal operations is moving forward, and so are the needs and expectations of clients and consumers. To keep up with these, your software must be regularly updated. That’s why when your software vendor sporadically (every two months) releases minor updates, chances are your contract automation software is lagging behind.

First, you need to be able to track changes to the software you’re using. Second, these changes should make your legal work easier and help you build a self-sustaining system. documentary ecosystem. If that doesn’t happen, you might be better off using another tool.

4. Contract Risk Score

Tracking contract risk score is a must even if you are not using contract automation software. One of its benefits is that it also highlights the efficiency of the software you are using.

To regularly assess the contract risk, you must first define the list of elements that threaten the execution of the contract and can decrease the value of the contract. Next, you need to determine the role of contract automation software in each of these risks. You can do this by answering the following questions:

· Was the approval delayed because the counterparty was not automatically notified?

· Have your annotations been saved?

· Has the approval been recorded in the workflow?

· Have any unauthorized changes been made by someone who was not supposed to have access to them at this stage?

To track this, you also need to find some mitigating ways that would help fix the issue quickly. Once this is done, you must:

List the number of times you had to respond to technology-related issues

Assess the impact of risk by client (establish a rating scale that meets your needs)

Assess the impact of risk for all contracts (at the same scale)

Assess the likelihood of the problem occurring in the future

Define acceptable and critical scores for your business

Calculate each risk in the risk matrix

By following this approach, you can systematically track any software-related issues and see if:

it is acceptable in your legal transactions

you need to contact the supplier to solve it

it might be better to ditch the software altogether

5. A series of contract lifecycle stages

The entire contract lifecycle does not fully describe the performance of your contract automation software because the human factor plays a huge role in it. Thus, we recommend:

identify the stages through which each of your contracts passes

determine those directly impacted by software performance

calculate the time it takes for each of your contracts to go through each stage

For example, the entire contract lifecycle can be divided into document drafting time, document review time, and other stages. This approach will help you see if:

the software you use improves your team’s performance

the use of the software is clear for all members of your team

your contracts are generally respected

any document automation changes are really needed

6. Save time

One of the primary goals of legal department automation is to reduce court costs, eliminate routine tasks and, of course, save your team time. So it makes sense to know exactly how much time you save by using document automation.

For example, AXDRAFT calculates this score for each document and adds it to the daily, weekly, monthly and yearly scores. Tracking these statistics can help you understand:

· the value you get from document automation software;

· the problem (if you see that you save too little time).

What’s the bottom line?

Tracking the performance of your contract automation software is essential for a number of reasons. First, to understand precisely how it helps you: from simplifying processes and improving your team’s performance to saving time. Second, the software may be failing you – tracking metrics and KPIs can help you notice this.

AXDRAFT integrates some of the essential KPIs into the system to facilitate the tracking process. We don’t just provide software – we become a dedicated partner helping you get rid of routine work.

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