Nearly $2.4 trillion in global economic value is lost annually due to the agreement trap, according to a study by Docusign and Deloitte. “Agreement trap happens when outdated agreement systems and processes slow the business down and trap business critical information inside flat files, unconnected to existing systems of record,” says Allan Thygesen, CEO of Docusign. He tells DigitalEdge how serious the problem is in the Asia Pacific (Apac) region and how to prevent it.
How prevalent are agreement traps in Apac? What region-specific trends exacerbate the issue?
The agreement trap affects every industry, organisation and business function. Our report found that 40% of Apac respondents reported delays from manual, inefficient processes in the development and signing stages of a contract compared to 32% in other regions. This equates to an additional five hours per agreement spent compared to the global average.
Apac is impacted more by outdated and inefficient agreement management processes than other regions worldwide. Firstly, Apac generally has a more formal multi-layered approach to agreements involving several stages of face-to-face negotiations, which can be time-consuming and cause significant delays in the agreement process.
Secondly, many businesses have disconnected agreement management workflows, resulting in an additional 18% of their time working on agreements. This leads to an average of 16 additional hours spent on the agreement lifecycle. These hours are wasted for various reasons, including process inefficiencies, technical limitations, or delays caused by multiple in-person meetings.
Finally, as digital ecosystems and compliance become more complex, agreement management is not keeping up with the pace due to a lack of modern tools. In the region, agreements often undergo multiple layers of internal review, which wastes over two hours per agreement.
See also: Alibaba anoints new chief in revamp of stalling commerce arm
Your study with Deloitte reveals that 54% of Apac respondents manually enter agreement data into downstream (disconnected) systems. Moreover, only 36% reported using intelligent contract analytics tools. Why are regional organisations stuck with manual processes and hesitant to use analytics tools?
Agreement management solutions are relatively new in the region. Research has shown that inherent challenges — such as complex, time-consuming negotiations that often happen in person — contribute to slower agreement processes.
Apac's adoption of agreement management solutions is lower at 35% compared to North America at 46% and overall, the agreement process is 6% slower than the global average. Delays and inefficient workflows throughout the agreement process will potentially result in $670 billion to $817 billion in lost economic value in Apac by 2025.
See also: Break up Google? What’s at stake in antitrust action
How can Docusign enable organisations to manage their contracts better and avoid agreement traps while ensuring security and privacy?
Our mission at Docusign is to help organisations easily create, commit to and manage all their agreements in one place.
We offer robust product capabilities to empower businesses to safeguard their data — from no-code workflow automation so the right people can see or sign the agreement to two-factor verification, phone authentication and advanced administration. Docusign Monitor also automatically sends alerts about suspicious activities.
This year, we introduced Docusign Intelligent Agreement Management to help organisations address the issue of agreement trap. It uses AI to enable businesses to transform agreement data into insights and actions, accelerate contract review cycles and boost productivity organisation-wide.
We believe AI will transform the agreement management process end-to-end. From creating the agreement to negotiation, signature and ongoing management, agreement data in each step will inform better business decisions.
Why should organisations use Docusign instead of readily available generative AI tools like ChatGPT to extract value from their contracts for growth and cost?
We are building models for intelligent agreement management that provide precision and accuracy throughout the agreement management process. We also offer workflow solutions to help organisations move faster and more efficiently, including developing, editing, negotiating, executing and managing agreements.
To stay ahead of the latest tech trends, click here for DigitalEdge Section
Our approach to privacy and security is a big reason why Docusign is widely trusted. We offer organisations robust security controls to prevent the leaking of confidential information internally and externally.
Can you share how you have helped customers in the region?
Here are a few that spring to mind:
- As part of its digital transformation journey, Grab used Docusign eSignature to reinvent its processes with its merchants. In just 12 months with Docusign, Grab successfully implemented eSign and is excited to explore advanced AI capabilities and enhanced security measures over the next two years.
- James Cook University Singapore attracts students from across Asia, receiving thousands of applications for study each year. Student applications used to take up to 10 days to be signed and processed, consuming around 45% of the team’s time, which equated to approximately 900 hours. With Docusign, JCU Singapore processes 88% of applications in just three days, with some fully completed within a few hours.
- Guzman Y Gomez was an early adopter of WhatsApp Delivery for eSignatures with Docusign. As a result, their business is now 90% paperless, with contracts signed in just two hours. A customer said: “Employees can now sign a contract as quickly as we can roll a burrito!”
What's next for Docusign and the contract management space in Apac?
Apac is a key region for Docusign and we've seen significant progress in adopting agreement solutions across the region. We believe the opportunity here is so great that Intelligent Agreement Management will one day be on par with other software-as-a-service categories like customer relationship management and enterprise resource planning.
With AI, we are bringing agreement management into the 21st century to help businesses of all sizes operate more efficiently and grow revenue more quickly. If we do it well, we might realise one of the most significant business opportunities today, recapturing some of that $2.4 trillion in lost global economic value.
