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Contract automation

6 Reasons Why Creating a Contract in Word is a Bad Idea

  • Are you still using Microsoft Word for important business documents such as quotations and contracts? If you are, you are not alone. However, you are missing out on a lot of great features that could save you time and make your documents better.

    In this post, we will highlight some of the problems with Microsoft Word and look at tools you can use instead that will give you far better results.

A look back at the history of Microsoft Word

Microsoft Word was developed back in 1983, about 40 years ago. Unfortunately, not much has changed since then. 

Basically, little has changed since the original version, apart from colours and a more elaborate graphical interface. Microsoft Word is still a piece of digital paper on a screen with some basic writing tools. However, with the increase in graphic detail and a nicer, albeit complicated, interface, the programme has become increasingly memory-hungry, which regularly causes it to crash when editing larger documents.

And although we changed from .doc to .docx, the output of the text didn't really change either. Everything became more complicated and confusing, and instead of the two toolbars that were common in the 1980s, there were more and more, leaving little text on smaller screens. At the end of the day, however, Word still produced a digital sheet of paper with static text and graphics on it, despite the more modern interface. While this was still a perfect result in the early 90s, the world has changed a lot since then. 

Tablets and mobile phones are now the main devices we connect to, more emails are opened on mobile devices than on desktops, and on YouTube alone we consume over a billion hours of online video content every day.

More importantly, the number of people on this planet has almost doubled since the 80s. This has also changed the way we work with each other. Content has become more complicated and the process of how we experience knowledge has become dynamic. The quality of many business relationships has also changed. Whereas in the past a business relationship could be recorded in a document at the beginning and then lie dormant in a steel cupboard for decades, today's business relationships are also outdated much more quickly with the shortening of innovation cycles. Static text on a white background has thus become completely insufficient.

These significant changes in the way we work, combined with the fact that Word hasn't really changed much in the last 35 years, means that it really isn't the best tool for any task these days.

Here are just a few examples of where Word fails when creating and editing contracts:

1. word documents are not interactive

Word documents are static documents with images and text. Unlike web applications or websites, you cannot embed interactive content here. Interaction with employees or customers, which is limited to the text and content, is only possible if you hand over the entire document. A simple connection of digital processes, as would be necessary for internal areas of companies, is currently not provided for. It is equally difficult to have documents signed by customers or superiors. 

"The usual 5-fight in the office: print, sign, scan, create PDF, email."

This means that if you want to allow collaboration with colleagues or customers, you have to pass the authorization over the entire document. Signing documents, which is actually so simple, also only works through a process that has remained unchanged for more than 30 years. You have to create a PDF if you don't want to relinquish design authority, then print it, sign it, scan it, and email it back. Research has shown that this slows document turnaround time by 80%

2. Word documents are difficult to edit together.

Have you ever had to go through hell collaborating with other people on a Microsoft Word document? Up to now, people have helped themselves by exchanging documents via the well-known but insecure channel of e-mail. This sometimes results in crazy and meaningless file names like 'presentation_final_final_v22' so as not to lose track of which document is the latest version in the chaos of collaboration with colleagues and clients. 

Or, in the past, one helped oneself by splitting up sections of the document to be created into different files that could then be edited separately. After the integration of the individual sections, at the latest, one was back in version chaos. 

Obviously, these systems are of limited help in determining which is the latest version, and often leads to people overwriting each other's work or creating conflicting versions. As you can see, this process often wastes many of your staff's valuable hours completely unnecessarily. 

As an objection, one must of course accept that there is reasonable version control software that is used in particular in law firms. Unfortunately, these extensions are not available for everyone. These sensible extensions have to be bought for additional money, and at the latest with the first project with different law firms and several companies, new stylistic blossoms of file naming arise again. This time, however, it is extended to include the versioning system of the law firm's software. It goes something like this: #23223av20200307#2324v2020_final_annotation_final_final_14.docx. Congratulations. 

"Today's challenges of an office worker using Microsoft Word: #23223av20200307#2324v2020_final_annotation_final_final_14.docx"

Admittedly, with the use of Sharepoint and Microsoft 365, it was possible to get a grip on some of these problems. But at the latest when one of the participants in this solution could not take part due to partly justified security concerns, one was back in versioning hell. 

3. Word documents are difficult to evaluate

Although some email tools provide a method of tracking when someone opens an email, it is still not easy to know whether the attached Word document was then actually opened. 

"I just wanted to check if you received the document I sent you".

But imagine you could be notified when someone reads your document, and further imagine you could see exactly which sections of the document the customer interacted with or how long each section was read. This would make it possible, without much effort, to perfectly time further emails or calls, or at least avoid pointless emails. This would make emails of the "I just wanted to check if you received the document I sent you" variety a thing of the past.

Unfortunately, unlike modern data rooms or websites, Word documents have no way of tracking reading time or interactions, so this kind of advanced insight into when people view your documents and what content they engage with is not available to you in Word. The only thing you have left at this point is to count the number of characters and words used, and you've been doing that since 1983.

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4. word documents are not secure

As soon as you send a Word document by e-mail to another party, the document and its contents are passed on to that person forever. It can be forwarded, shared with others, published, printed, left behind in the office or meeting. You relinquish sovereignty over your document at once, including the versioning number. Granted, you can password-protect a Word document, but the password can easily be given to a third party along with the document or removed completely by anyone who has the password.

5. confidential information is no longer kept confidential when it is sent.

In distribution

Once you have sent an offer to the world via a Word document, it cannot be taken back. All price information can simply be passed on to the competition, including your corporate design, which you have worked on for hours in Word, in order to receive a counter-offer. It is best to say goodbye to your margin as soon as you send a Word document. 

In human resources:

Hotly contested workers can send their multi-page offer to their own employer without delay in order to pull up the current salary once again. You have the choice of entering a bidding war or going with the next best worker you can afford.

In the legal field:

In the legal field, the problem is particularly glaring. As a rule, companies do not want negotiated transactions and the strictly confidential details they contain to end up with their competitors or in the public domain. However, this cannot be ruled out when sending Word documents.

Often it is enough for the negotiated contract to be used as a template for the next transaction so that all the details end up - often simply unintentionally - with the next takeover candidate, thus quickly rendering well-guarded negotiation strategies useless. 

6. word is a very generic tool

A Swiss army knife is the most generic tool imaginable. It can be used in many ways and solves small and quick jobs very reliably. However, if you were to cut down a tree with your pocket knife, you would probably succeed after several days, but the feeling of success would not really come from looking at the worn knife and the calluses on your hands. 

This or something similar is also true for the use of Microsoft Word. A quick memo, a short thought, an invitation to a birthday party can all be done with it. But if you think about writing a doctoral thesis on the same software, or writing a three hundred page securities prospectus, or drawing up framework agreements, then you will probably see the calluses on your hands in the form of nights worked through. 

But if you want playbooks, contract signatures, data security and sovereignty, and a way to sign contracts directly, you might want to leave your Swiss Army knife at home and bring a chainsaw instead.

Tools you can use instead

While there are certainly alternatives to Microsoft Word such as Google Drive and Zoho Docs, they unfortunately all more or less suffer from the aforementioned maladies. At their core, they are also nothing more than a digital writing pad with advanced formatting options.

As a rule, different software packages are available for different areas of application, as is the case when using knives, to stay with the example above. Just as you will have better results with a filleting knife when stripping meat than if you approach the same task with a butter knife, custom-fit software solutions can save you a lot of time and money. 

Here are two examples of tools you can use instead of Word:

Internal memos and notes

Notion likes to present itself as a one-stop office application, perfect for internal documents and internal collaboration. Instead of a simple, static document, you can easily embed videos, bookmarks, checklists, special text (such as code, transcripts, etc.) and much more into the document.

Even simple databases can be created that can be totalled, shared and ordered. Tasks can also be given a due date. All documents, simple tables, corresponding tasks live in one place. There is no longer a need to constantly change applications. 

In addition, the need to format text falls completely flat. Text is formatted automatically. Headings and text blocks are simply assigned semantic formatting similar to the Markdown format and Latex. So you know that a heading is a heading, and not just a section of text that you happen to have formatted as a heading. Everything looks perfect within seconds. 

Contract software is an end-to-end contract collaboration and management platform that helps companies close contracts faster while providing deep insights into contract data. The AI-enabled system provides contract creation, negotiation, e-signature, and analytics, saving companies up to 96% of the time they spend on contracts.

The new design-oriented way of working with contracts makes very suitable for performance-oriented distribution environments. Contracts can be used as a sales tool and you retain control over the data at all times with maximum security.

It is time for a change

If you continue to rely on Microsoft Word for business documents such as contracts and quotations, you will probably still be able to achieve acceptable results, but you will not enjoy the simplification and process-oriented way of working of new, specialised software.

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