Contracts are the foundation of understanding and relationships in business, with construction firms relying on contracts for every part of a project. The funds that come in and out of construction organisations are based on the terms of a contract, which means it’s vitally important to get those terms right and to ensure that contracts are renewed and signed promptly.
Managing contracts manually can be incredibly time consuming, requiring staff members to track various contracts and their terms and ensure the contracts are reviewed and renewed as appropriate.
Digital contract management software removes the challenges of paper-based contracts, improving the process from creation through to completion, and everything in between. It helps shift the focus to what is most important in business, building trust-based relationships.
Business process automation (BPA) further enhances digital contract management by streamlining and automating repeatable daily tasks. It uses built-in decision-making based on user-defined rules and actions to send information to the right person. The two systems go hand in hand when it comes to business efficiency.
The contract between a client and a contractor is at the centre of all construction projects. Due to the size and complexity of these projects, digital contract management lets construction businesses reduce costs and save time and resources. It’s a simple change that can significantly boost productivity.
Digital contract management can be the first step in a staged approach to adopting technology and increasing technology competence to help streamline business processes across the board. It could, eventually, lead to organisations becoming more prepared to adopt emerging technologies such as artificial intelligence (AI), which can help construction firms further reduce costs and improve margins.
The Australian construction industry’s productivity has only increased by one per cent over the past two decades, and there are growing concerns regarding efficiency in the industry in this country, according to researchers from Queensland University of Technology and Shue Yan University. AI has been identified as a tool to help prevent cost overruns, improve site safety, and manage projects more efficiently.1 A construction firm’s journey to AI can start with simple process automation.
Konica Minolta has identified the three stages of technological opportunity that start with automated digital contract management.
1. The perfect starting point for digital transformation
Digital transformation is seeing businesses across various industries eliminate manual processes in favour of new digitalised workflows. However, the sheer volume and variety of potential transformation initiatives can be enough to paralyse an organisation. Starting in one area is a great way to open the doors to implementing technology. It helps employees overcome their natural trepidation and see for themselves how technology makes their jobs easier.
Digital contract management is a perfect place to start for construction firms because it focuses on solving a key pain point. Compliance, contract cycle times, renewal rates, and revenue are all substantially improved by taking contracts digital. The system sends notifications of deadlines, approvals, and changes so important dates and milestones aren’t missed.
Meanwhile, staff members who were previously responsible for managing contracts can have their time freed up for more interesting or creative work, such as finding new contractors, negotiating new relationships, and finding cost savings or efficiencies for the business.
2. Expansion of digital systems leads to further improvements
Contract management isn’t the only process that can be automated to pay dividends. Construction firms can automate the process of managing insurances and accreditations, creating and managing project documentation, and internal communication and collaboration.
Research shows that Australian builders still use cumbersome, paper-based processes for site activity records (29 per cent) and estimating and pricing (26 per cent).2 Digitalising and automating these processes could yield significant benefits. By starting with contract management automation, construction firms can build their skills in this area and gain confidence to adopt new technologies and apply existing technologies to new business processes.
3. Setting the scene for future technology adoption
The next step is to build on these transformations with further technology initiatives, so construction firms have more time to do the work that matters. Recent research showed that Australian builders expected to save around 13 per cent on projects by managing data more efficiently.3
Emerging and even existing technologies like the Internet of Things (IoT), Industrial Internet of Things (IIoT), AI, building information modelling (BIM), and many more will be much easier to contemplate, understand, and adopt once construction firms have built a foundation of technology understanding with contract management solutions.
While these advancements may be future-looking, automated contract management can be a reality for your business today. Konica Minolta’s contract management allows for easy access and up-to-date information by keeping every contract in a single place, regardless of its process stage. Each contract is edit-tracked and recorded, with contracts sent for approval automatically to save you precious time and resources.
Konica Minolta has worked with construction firms around Australia to streamline workflows such as contract management. To learn how we can help your construction firm digitally transform, contact the Konica Minolta team today.