How Contract Automation Drives Efficiency and Growth In 2025

April 5, 2025

5 min read

The future of legal work is smarter, faster, and more strategic and it begins with contract automation.
The problem? Traditional contract processes are painfully slow, packed with errors, and drain valuable time from legal teams.

With contract automation software, businesses are turning contracts into a source of growth and collaboration, rather than routine administration.

Across industries, leaders are embracing automation to unlock speed, accuracy, and smarter decision-making. According to study by Gartner, 66% of legal leaders already plan to accelerate their investments in legal technology.

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Quick Read

Summary generated by AI, reviewed for accuracy.

Contract automation begins with digitizing contract creation using predefined templates, clauses, and approval workflows. Drafts move seamlessly through review, negotiation, and signing, eliminating repetitive manual steps.

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What Is Contract Automation?

Contract automation is a structured process that uses technology to create, manage, and execute contracts with minimal manual work.

Instead of drafting each contract from scratch, organizations use standardized templates, pre-approved clauses, and automated approval workflows.

This approach reduces repetitive tasks, ensures accuracy, and maintains consistency across all agreements.

What is Contract Automation Software?

Contract automation software is a digital solution that manages the entire contract management from drafting and approvals to signing and storage. It reduces repetitive manual tasks, improves visibility across the contract lifecycle, and provides businesses with better control and insights into their agreements.

How Does Contract Automation Works?

According to WorldCC, 81% of organizations want to utilize contract automation, reflecting its growing importance in modern business operations. Before adopting such a system, it is essential to understand how contract automation works and how it supports the entire contract lifecycle.

Digitizes legal processes, making contract handling more organized and accessible.
Builds automated workflows that support drafting, review, approval, and execution.
Integrates smoothly with existing system like SharePoint business applications to enhance daily operations.
Accelerates contract activities, helping teams work faster with greater confidence.
Guides contracts through their lifecycle, from creation to signing and renewal, with clarity.
Boosts efficiency by freeing teams to concentrate on strategic initiatives and high-impact tasks.

Why do Businesses Need Contract Automation?

Contract management is one of the most important responsibilities within any organization. Yet, the process can often feel drawn out. On average, it takes 3.4 weeks for a contract to receive approval.

During this time, projects may be placed on hold, decisions are delayed, and teams wait for the formal green light to move forward.

While contract approvals are necessary the extended timeline shows how traditional approaches may not always match the pace at which businesses operate today.

At the same time, legal departments are looking for ways to improve the way they manage contracts. Research shows that 50% of legal managers want to improve efficiency but face challenges in automating key tasks.

This indicates that the need is well recognized, but the right systems are not always in place to make it possible.

This is where contract automation becomes important. By introducing structured, automated processes, organizations can create an environment where contracts move smoothly through each stage.

Who Benefits from Contract Automation?

Contract automation is not limited to legal teams. It supports multiple departments and industries by making the contract journey faster, more reliable, and easier to manage. Here are some of the groups that benefit the most:

1) Legal Teams

Legal professionals are central to protecting the organization, yet much of their time is consumed by tasks that don’t always need legal expertise.

According to Gartner, lawyers in corporate departments spend nearly 25%–40% of their time on activities such as drafting, approvals, or monitoring deadlines.

By adopting contract automation software, legal teams can move routine responsibilities into a system that handles them consistently.

Ultimately, they can safeguard the business while focusing on matters that require their expertise.

Recommended Read: Contract Management Software for Legal Departments

2) Sales Teams

The faster a proposal turns into a signed contract, the higher the chances of sales success.

Yet manual steps drafting contracts, waiting on reviews, or collecting signatures can create unnecessary delays that slow revenue growth.

Automated contract management application changes this by giving sales professionals the ability to generate contracts instantly through pre-approved templates.

Agreements can be tailored within set guidelines and finalized with digital signatures in just a few steps. This gives sales teams the flexibility to close deals faster without compromising on accuracy or compliance.

3) Business Leaders

Business owners and managers manages multiple responsibilities daily, and contract delays can quickly affect operations.

Following up on approvals, coordinating across departments, and tracking progress manually takes time that could be better spent on decision-making.

With smart contract automation, leaders gain visibility into every stage of the contract process. They can see progress in real time, avoid unnecessary challenges, and foster collaboration between departments.

4) Procurement Teams

Procurement departments often deal with a high volume of vendor contracts, purchase contracts, and supplier negotiations. Handling these manually increases the chances of inconsistencies, missed renewal dates, and oversights in terms and conditions.

By moving to contract automation software, procurement teams can draft agreements with greater consistency, track obligations more effectively, and reduce unnecessary revisions.

They also gain timely reminders for renewals and better insight into supplier performance, which helps them manage vendor relationships with confidence.

Key Challenges in Traditional Contract Management

Many organizations still handle contracts with traditional methods like emails and spreadsheets. While this approach works, it often brings certain difficulties that can slow down business activities. Understanding these struggles can help companies see why modern tools are becoming more important.

Longer Approval Timelines
When a contract needs approval, it usually goes through different people such as managers, legal teams, and finance departments. Each review adds extra time before the agreement is finalized. This can hold up important business deals or delay new partnerships.

Time-Consuming Administrative Work
Creating, storing, and tracking contracts manually takes a lot of effort. Teams often spend hours on tasks like preparing documents, updating versions, or following up with colleagues for signatures.

Difficulty in Tracking Deadlines
Contracts usually come with renewal dates, contract obligations, or payment schedules. When these details are recorded in separate files or emails, it becomes harder to stay updated. Missing a date may cause unwanted delays or affect the smooth running of a project or supplier relationship.

Limited Visibility Across Teams
In many businesses, contracts are stored in different folders, departments, or even with individuals. This makes it difficult for everyone to access the same information. As a result, employees may repeat work, miss key details, or wait for updates from others.

Heavy Dependence on Manual Checks
To make sure every contract is accurate, teams often go through documents line by line. While this careful checking is important, it can be slow when handled completely by hand. It also increases the effort needed for compliance and risk review.

Key Benefits of Using Contract Automation

Contract automation helps businesses work smarter by saving time, reducing costs, and improving accuracy across every agreement Here are some benefits.

1) Saves Time and Costs

Automating contract management directly translates into massive time savings. Routine tasks that once consumed hours can now be completed in minutes.

A study by, WeShare reported that lawyers saved 82% of their time by adopting automation. That’s time they could redirect toward client service, strategic thinking, and high-value legal work.

In business terms, saved hours also mean reduced overhead costs, making contract automation a smart investment with long-term financial benefits.

2) Simplified Contract Creation

Drafting contracts no longer must be a repetitive process. Contract automation allows businesses to create accurate templates that can be reused and tailored within seconds.

Instead of spending hours writing standard agreements, users can generate polished documents instantly.

This not only makes life easier for legal teams but also empowers sales, HR, and procurement departments to handle simple contracts without waiting for legal support.

The result is faster deal-making and more self-sufficient teams.

3) Improved Compliance

With automation, compliance is built into every contract, giving businesses confidence that rules are always followed. Contract automation software are designed with built-in rules and checks that keep every agreement aligned with regulations and company policies.

Users don not just avoid mistakes they gain confidence knowing that every contract is accurate and audit ready.

This makes it easier for organizations to expand into new markets or industries where regulations can be strict.

4) Minimized Risks

Every business faces risks with contracts, whether from missed obligations or unclear terms. Contract automation gives teams an advantage by making contracts consistent and easy to track.

This means obligations are met on time, every important clause is included, and businesses build stronger, more reliable partnerships.

5) Stronger Collaboration

Contracts typically require collaboration among various stakeholders, including legal, finance, operations, and external partners. With automation, everyone can contribute without delays.

Teams get a unified, organized system where feedback and approvals happen effortlessly. This not only speeds up the process but strengthens collaboration across departments.

Teams can make faster decisions, have seamless coordination, and more effective teamwork throughout the organization.

6) Faster Contract Lifecycle

Making the process faster is one of the biggest returns from automation. According to WeShare, negotiation cycles are cut by 50% when contracts are automated.

This means businesses close deals twice as fast, giving them a competitive edge in winning clients and responding to opportunities.

For sales teams, this speed can mean hitting targets faster; for procurement, it means securing vendors without delays and for HR.

7) Greater Accuracy

With contract automation, every agreement is consistent, accurate, and dependable, giving businesses full confidence in their documents. This level of accuracy builds trust with clients, vendors, and employees. The real return here is confidence in knowing that every contract reflects the professionalism and reliability of the organization.

8) Contract Execution

The final step of a contract execution often slows things down. With automation, approvals and signatures can happen digitally and instantly.

Approvals and signoffs happen quickly, allowing deals to close faster and partnerships to progress without delays.

Businesses gain the agility to act on new opportunities right away, leading to quicker revenue growth and stronger long-term success.

Essential Features Every Contract Automation Software Should Have

According to WeShare, 82% of contract professionals say that more than 20% of their day could be automated with AI. This shows how much valuable time can be saved when the right tools are in place. Here are the key features that every organization should prioritize.

1) Contract Approval Process

An automated contract approval takes the stress out of waiting for signoffs.

Instead of chasing managers or department heads, contracts are automatically sent to the right people at the right stage.

This means businesses spend less time waiting and more time closing deals. Teams gain complete visibility into who has approved, who is pending, and what comes next.

The result is a faster contract cycle, fewer delays, and stronger accountability across the company.

2) Contract Redlining

Contract redlining allows multiple stakeholders to edit, suggest changes, and review clauses in real time. This not only makes collaboration easier but also speeds up negotiations.

For legal teams, it reduces the workload of consolidating feedback, for business teams.

It means faster agreements that move projects forward without confusion.

3) Contract Reminders and Alerts

Keeping track of renewals, deadlines, or compliance dates is one of the biggest challenges in contract management.

With contract reminders and alerts, users no longer need to manually calendar important dates.

The contract automation software notifies them when action is required. This ensures obligations are never missed, contracts are renewed on time.

4) Contract Routing

Smart contract routing gives businesses the ability to assign the right contract to the right person at the right time.

For example, a sales contract may go to the sales manager first, then the finance team, and finally to legal for approval.

This structured contract automation management routing eliminates challenges and saves valuable hours.

5) E-Signature Software

Today’s businesses need speed and convenience, and e-signature software provides both. Instead of printing, signing, scanning, and emailing contracts, signatures can be added digitally in seconds.

This reduces paperwork, improves customer experience, and makes it possible to close deals from anywhere in the world.

For organizations, it means faster revenue recognition, and for clients or partners, it means an easy and professional signing experience.
Recommended Read: What Is Electronic Contracts

6) Contract Version Control

Contract version control keeps every draft, revision, and approval neatly organized in one place.

Teams can always access the latest version, enabling smoother collaboration and quicker decision-making.

For businesses, this feature builds accuracy, consistency, and confidence in every contract, ensuring agreements are clear, reliable, and ready to support growth.

7) Contract Management Software Integration

Contract management software integration with existing systems is a must-have for modern businesses.

Instead of constantly switching platforms, contracts can connect directly with tools teams already use every day like SharePoint, MS Teams, and Outlook, as well as CRM or ERP.

By living inside familiar platforms, contracts become part of a connected ecosystem that reduces duplication.

The Microsoft SharePoint contract management offers flexible configuration options so you can align your contract management solutions with your unique processes.

From creating custom document libraries and metadata fields to setting user permissions and access levels, every aspect can be tailored to how your team works best.

This ensures a smoother adoption process and a system that supports your day-to-day operations without forcing you to adapt to a rigid structure.

4) Extensive Customization Capabilities

Users can leverage dashboards that show contract statuses, deadlines, and performance metrics immediately. Add custom fields to capture unique contract details and design templates for different types of agreements.

5) Streamlined Approval Workflows

Approvals are often the biggest bottleneck in contract management, but SharePoint’s automated workflows remove unnecessary delays.

Contracts are automatically routed to the right stakeholders based on your pre-set rules, and notifications ensure that no approval request gets lost in someone’s inbox.

This not only speeds up turnaround times but also improves accountability and transparency, as every step is logged and trackable.

6) Tailored Custom Workflows

Beyond simple approvals, contract automation enables you to design workflows for the entire contract lifecycle from initial request and drafting to renewals, amendments, and compliance reviews.

These contract workflows ensure consistency, reduce errors, and make it easy to follow internal processes without manual oversight.

For example, you could set automated reminders for contract renewals or route expired contracts directly to your legal team for review.

7) Personalized Email Templates

Clear, timely communication is essential for effective contract management.

SharePoint Microsoft contract management allows you to create personalized email templates for every stage of the contract process whether it is sending out an approval request, notifying a stakeholder about a new contract, or reminding someone about an upcoming renewal.

These templates can be branded with your organization’s identity, ensuring professional and consistent messaging that reinforces trust and clarity.

Implementing a Contract Automation Software

Implementing a contract automation management goes beyond simply moving contracts online. It is about creating a smarter, faster, and more reliable contracting process that reduces risk. Here is how to implement it.

1. Define Objectives and Scope

Every successful implementation starts with clarity. Defining what the business want to achieve with contract automation ensures the software supports your most pressing business goals rather than becoming just another underutilized tool.

Identify key goals such as faster turnaround time or improved compliance
Define the scope of contracts to be automated first
Establish measurable success metrics before rollout

2. Standardize Templates and Clause Libraries

Inconsistent contracts often lead to delays and errors. Standardizing templates and leveraging a centralized clause library not only speeds up contract drafting but also ensures every document complies with company policies and legal requirements.

Create pre-approved templates for frequently used contracts
Build a clause library validated by legal teams
Ensure updates are centrally managed for accuracy

3. Map Workflows and Approval Processes

Contract automation is only as strong as the workflows behind it. Clearly mapping approval processes ensures that contracts move seamlessly through the right stakeholders, reducing unnecessary back-and-forth and improving accountability.

Define approval hierarchies clearly (legal, finance, management)
Set role-based permissions for editing and approvals
Automate routing to avoid unnecessary bottlenecks

4. Integrate with Existing Business Systems

Contracts do not exist in isolation, they connect to sales, procurement, and finance. By integrating contract automation software with existing systems, organizations ensure data consistency, reduce duplication, and improve overall efficiency.

Connect automation software with existing systems
Sync contract data to reduce duplicate entries
Enable real-time collaboration across departments
Recommended Read: MS Teams Contract Management Explained

5. Provide Training and Drive Adoption

The best software won’t succeed if people don’t use it effectively. Training, onboarding, and ongoing support are crucial to building user confidence and ensuring long-term adoption across teams.

Conduct hands-on training sessions
Leverage knowledge resources like FAQs and guides
Collect feedback to refine processes

Best Practices to Implement While Automating Contract Workflow

Automating contract workflow not only speeds up processes but also helps organizations reduce risks. Below are five best practices every business should follow to get the maximum value from contract automation.

1) Use AI for Contract Summary

AI feature summarize contracts highlight the most important points such as payment terms, renewal dates and liability clauses.

For legal teams, this means less time spent on repetitive reviews and more focus on strategic risk analysis.

It also helps business teams understand the contract essentials without waiting for legal interpretation.

2) Define Clear Contract Lifecycle Stages

The first step in contract automation is mapping out the entire lifecycle of a contract.

This typically includes drafting, internal review, negotiation, approval, execution, storage, and renewal or termination.

Clearly defining these stages ensures that contracts move through a structured path with no gaps or bottlenecks.

3) Set Role-Based Access Controls

Contracts contain sensitive financial and legal information, making data security and access control crucial.

Role-based access ensures that only authorized individuals can view, edit, approve, or sign specific parts of the contract.

For example, a sales manager may only access commercial terms, while the legal team has full access to clauses and risk provisions.

4) Monitor KPIs and Continuously Improve

Automation should not be a one-time setup. Legal and compliance teams need to track contract performance metrics to evaluate how well the workflow is functioning. Key performance indicators (KPIs) include:

Average contract cycle time
Number of contracts stuck in review
Renewal and expiry management compliance
Ratio of standard vs. non-standard clauses

Continuous improvement makes the contract automation system smarter and more aligned with business goals over time.

5) Advanced Search & Reporting

One of the biggest challenges for legal teams is finding the right contract or clause quickly

Especially when dealing with hundreds or thousands of documents. A centralized repository with advanced search and reporting makes it possible to locate contracts by keywords.

Additionally, reporting dashboards give leadership real-time insights into risks, obligations, and compliance.

How CLM 365 Streamlines Contract Automation

CLM 365 optimizes and speeds up the entire contract management process using smart automation.

Its AI-powered capabilities allow teams to quickly summarize contracts, suggest alternative clauses, and efficiently manage obligations and potential risks.

The platform seamlessly integrates with Microsoft 365 apps like SharePoint, Microsoft Teams, Outlook, Word, and MS Copilot, providing a unified workflow for all contract-related activities.

Certified by Microsoft, CLM 365 also ensures enterprise-grade security, giving organizations confidence in protecting their sensitive contract data.

Conclusion

Automating contract management is no longer optional; it is essential for organizations that want to save time. Experience the power of automation with CLM 365 and transform the way your organization manages contracts.

Get started now and see how effortless contract management can be.

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Frequently Asked Questions

What is an automated contract?

An automated contract is a legally binding agreement that is created, managed, and executed using software tools without relying solely on manual processes. Automation allows contracts to be drafted, reviewed, approved, and tracked digitally

Is automating contracts secure?

Yes, contract automation can be highly secure when implemented with enterprise-grade security standards. Modern systems include role-specific permissions, secure encryption, comprehensive audit trails, and regulatory certifications.

How can automation in contracts process reduce legal risks?

Automation minimizes legal risks by ensuring consistent use of approved clauses, compliance with regulations, and accurate tracking of obligations. AI-powered tools can flag high-risk terms, identify missing approvals, and enforce internal policies before contracts are executed.

How does automation handle contract renewals?

Automated contract systems track expiration dates, renewal options, and termination clauses, sending alerts to relevant stakeholders. This guarantees contracts are renewed on time, avoids accidental expirations, and helps fulfil all obligations consistently.

How does automation reduce human error in contract management?

By replacing manual processes with templated clauses, automated routing, and alerts, automation ensures contracts are accurate, compliant, and complete before execution.

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