Smart contracts, CLM (contract lifecycle management) technology, document automation: the possibilities for confusing what a smart agreement platform like Clause does can add up.
Smart agreements use the data in your agreements to orchestrate business actions. Marketing, sales, finance, service, supply, and HR teams complete work faster and less manually because smart agreements connect to the systems they use and drive work for them. When IT builds with smart agreements, the needs of their stakeholders are met easier and more cost-effectively.
The smart agreement is an agreement—a document containing the text of promises, responsibilities, and actions agreed to by two or more parties—that computes the textual information inside it to verify for accuracy and automate the agreed actions.
The Clause platform makes it easy for businesses to power smart agreements wherever they use documents today: within e-signature, CLM, CRM, ERP, or other software applications.
How does this add value to business?
When you send a smart sales agreement, the agreement can know when a customer is entitled to a pricing discount after meeting specified volume or usage thresholds, like number of orders placed or API calls made. When you’re signing a payment authorization form with your lending institution, you don’t need to worry about entering the wrong bank account since the smart agreement can verify for you; at the same time, your lender reduces the risk that you’re a fraudster by relying on the same embedded verification technology.
By letting the agreement take action, business teams free up time. The automation brought forth by smart agreements reduces errors and speeds up customer transactions. Perhaps above all, all agreement users have an elevated experience: the sender on the business side doesn’t have to audit the information signers input or restart the process to fix bad data; on the recipient side, the customer has a familiar digital interface that helps them with filling out fields and informs them of errors.
As a pioneer of smart agreements, we know they can solve many business problems ranging in complexity. Remember that smart agreements respond to real-world and business data, rather than merely storing a snapshot of those data. In practice, there is value in starting with the simple, like using Clause Verify to verify the information that signers share within onboarding documents.
This has the value of speed: up to 72 hrs per document in manual audit of signed agreement data eliminated. Clause Verify smart agreements also reduce costs: $18 to $82 per document savings.
What are the alternatives?
Static files still dominate. Word and Google Docs turned into PDFs, or digital form builders that generate PDF files, are the bread and butter of agreement processes today. (We lump paper forms and contracts with static files—and while, yes, it is 2021, paper documents still take up an inordinate amount of space in businesses’ internal and external transactions.) Making sure the information contained in these files are accurate, syncing data with internal systems of record, creating invoices, managing pricing and payment terms, applying penalty and discount clauses—all of these are manual tasks. 56% of businesses still manually route signed agreements to systems for business use.
More sophisticated organizations develop custom code to reduce such manual actions. This is the other main alternative to Clause. Often, this involves patching different systems not purpose-built for agreements. A costly and time-consuming endeavor.
What are some real-world examples?
Today, we’re focused on Clause Verify use cases. We start with our customers’ high-volume contractual forms and examine the business implications of the data captured in those agreements. Where customer identity data is captured to satisfy KYC/AML requirements or to reduce fraud, Clause can impose checks within the agreement, during electronic signing, to prevent bad actors from entering the system. Where payment data is captured that needs to be processed after signing, Clause reduces failed payment transactions by verifying bank account data in an instant for ACH payments.
Our recent work includes enabling a large U.S. financial services firm to increase productivity and eliminate post-signature audit costs: Identity of individuals, address of residence, and bank accounts are verified within the recurring ACH authorization forms the organization sends out from DocuSign to hundreds of thousands of consumers a year. We’ve also helped regional banks streamline customer verification inside Paycheck Protection Program loan application forms and small businesses cut costs by initiating ACH payments from smart agreements.
What’s the future?
The core value of agreements is in the actions that follow after they’re drafted. Because the data in agreements are so crucial to business, there is tremendous value in a smart agreement freeing up and acting on that data throughout the entire life of the agreement. By connecting to external systems, the agreement comes alive and ensures the value bargained for is realized.
The technology for that future is here—Clause has built it. This is our upcoming Enforce product (currently available to select customers). An Enforce smart agreement persists for the life of the agreement, reacting to changes in market prices, weather data, customer behavior, unpaid invoices, and other information that impact the performance of parties’ obligations. (See our case studies building complex smart agreements for early enterprise adopters in insurance and supply chain.)
Our webinar with Tom Gonser (e-signature pioneer who founded DocuSign) has a good discussion about this future. Watch it in its entirety here.
How easy is it to get started?
Clause is built with flexibility as an essential quality. There is no need to make your entire document computable, or smart. The Clause platform powers smart agreements made up of Smart Clause® templating technology. Our customers add these templates to turn specific sections of agreements into their smart versions, as their business needs require. Like e-signature, you can use smart agreements one-sidedly, without requiring your counterparties to adopt Clause.
Deployments for Clause Verify smart agreements can happen in single-digit days using our flexible templating technology and pre-built integrations.
The point of a smart agreement is to make business simpler through increased connectivity. The Clause platform does this by sitting at the center of internal and external systems to drive business action.