Tieto Finland Oy
Author: Ron MacInnis, Founder and CEO of Document Agility, Inc
Several obstacles can stump businesses when they try to effectively produce contract documents. A new technology approach can help get the job done. Find out how to put the new method to work.
Organizations face a host of challenges when creating contract documents because the creation process itself is often inefficient, lengthy and expensive. The resulting documentation does not always reflect the business intent of the contract and there is often little access to the data required for an organization to manage the contract obligations.
At the heart of these issues is the challenge of collaboration – coordinating the many groups that must come together to gather and work on the required information. Coordination is especially challenging considering today's highly distributed and mobile workplace. As a result, generating documentation is essentially crowd-sourced.
In this distributed work environment, data is most often contributed in a variety of unstructured ways - by email, spreadsheets and even paper checklists. These methods are problematic. This is what can happen:
In addition to the data collection problem, another issue that affects the quality of the data used in the generation of contracts is the process that involves the legal or contracts staff interpreting the data. The interpretation process, by its very nature, opens the possibility for error. Even legal experts can misinterpret the data and make mistakes in drafting the appropriate contract language or selecting language based on their interpretation. This also places the most time-intensive and difficult part of the contract creation process with the legal department – the group that likely has the highest cost, fewest members (compared to the number of data contributors), and sometimes the least direct knowledge of the client.
Technology offers a new cloud-based approach - Collaborative Document Generation
Highly suited to cloud-based working, collaborative document generation consists of two technological approaches that help reduce errors and address the distributed and collaborative nature of data collection: 1) Distributed Data Assembly and 2) Rules-Based Document Creation.
The Distributed Data Assembly method operates in much the same way that a manufacturer assembles a physical product. Each team, business system, or stakeholder sequentially adds its unique information to an accumulating set of data that is efficiently moved among teams. As this data capture “engine” moves throughout the organization, it assembles data held in the cloud and accessible by all stakeholders into an accurate, cumulative representation of a given transaction. See Figure 1.
This approach collects data through online interviews using questions grouped and tailored to a particular team's role in the collection process. Interviews use conditional logic to control the order and type of questions presented to ensure that all required data is collected.
For example a commercial loan transaction might begin with an account manager in the field who answers questions in an online interview about the client and the basic loan provisions they want. When the account manager completes the questions, workflow rules move the interview engine to a compliance group. There a team member would see an interview with more complex questions that he/she is qualified to answer. Once all data is captured, workflow rules move the transaction to a legal group that generates the required documents. See Figure 2.
This process efficiently and effectively collects data more accurately and completely. Data can then be used to create the contract document.
The Rules-Based Document Creation approach can accommodate non-standardized contract provisions resulting from negotiation between parties. In this situation, an organization identifies areas of the contract most often negotiated by other parties and modifies standardized interviews to let users add customized language. This approach accommodates most situations. However, in cases where greater customization is needed, the rules-based approach at least provides an accurate “base” contract from which parties can negotiate.
This method eliminates errors of interpretation and ensures that documents are uniform and accurate. This approach uses business rules, for example government regulations and stakeholder business requirements and best practices, to generate documents directly from the data itself. Rules are created in advance and maintained by an organization's legal and contract staff to ensure compliance.
Rules are stored in template files that contain the possible variations of contract language and the logic that controls which language is used, based on how online interview questions are answered. Legal and contracts staff create these templates using an add-in to traditional word processing software, which also allows them to create and order the questions used in online interviews.
When documents are generated directly from data using the established rules, much of the creation can be done during the data capture process by the contributing teams. This enables legal resources to concentrate on higher-margin activities, rather than struggling to wordsmith the large number of contractual documents originated within their companies.
Wrapping it up
Taken together, the two processes (Distributed Data Assembly and Rules-Based Document Creation) form an overall approach referred to as Collaborative Document Generation. See Figure 3.
In addition to improving the document creation process, this cloud-based approach also improves the accuracy and accessibility data organizations need to develop their contracts, and saves on time and costly errors caused by flawed data.
ABOUT THE AUTHOR
Ron MacInnis is a long-time document automation entrepreneur. He is the founder and CEO of Document Agility. Ron had previously founded and led AccuDraft, a document generation company serving financial services organizations, which was acquired by Thomson Reuters. Ron began his career in the financial services industry and had previously held senior management positions in the insurance and brokerage industries.
ABOUT DOCUMENT AGILITY, INC
Document Agility, Inc. serves the mid-to-large-sized corporate market providing secure, scalable, cloud-based solutions for automating the creation and management of transactional documents and contracts. Our solutions help organizations collect data and create documents and contracts faster and more accurately, especially given today's distributed, mobile workforces. Document Agility is headquartered in Lake Mary, FL.
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