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Though they appear synonymous and accomplish similar results, the terms — contract management and contract automation, represent different facets of the contracting process.

By understanding the distinction between the two and the roles they play, you will be able to locate the best legal tech solution for your business.

But to better highlight the differences between contract management and contract automation, we need to break down the entire contract life cycle first and analyze the distinct pain points.

A Typical Contract Lifecycle

1. Request

The first stop on a contract’s journey is the request, which establishes the scenario, the type of contract needed, and the particulars.

For example, After a successful demo, Alice, a salesperson at Globex Corp, is ready to close the deal for the sale of printers worth $100,000 with Acme Tech. She shoots an email with the necessary details to Bob in the legal team requesting for a bill of sale contract.

Pain points at this level


Use of multiple communication channels increases the risk of important information falling through the cracks.


Lack of clarity in the roles and responsibilities of team members can create confusion and extend timelines.

Absence of a triaging system to accept and prioritise incoming requests.

2. Author

This step involves drafting the agreement’s content using MS Word or a more specialized contract editor.

Bob begins drafting the contract based on Alice’s request and the information provided. He also makes sure that the company-approved clauses are used from a template document, while also taking into account the privacy requirements of the local jurisdiction.

Pain points at this level

Creating contracts from scratch is tedious and prone to human error.


The lawyer has to manually verify if the contract is in compliance with regulations set by the company, industry, and other governing bodies.

3. Review & Edit

Next, the contract is analyzed, and sections are renegotiated and revised based on back-and-forth discussion between the party and counterparty.

After receiving the bill of sale contract with Alice, Acme Tech requests for extended warranty period and increase in the number of free services. Alice works with Bob to approve the new changes in the contract.

Pain points at this level 


Erroneous track changes and lack of audit trail increases the workload for the lawyer.


Fragmented collaboration as changes to contracts are communicated over multiple communication channels.


Extended review cycles increase the length of the sales funnel and also cause sales fatigue.

4. Approve

After reaching a consensus, the contract is signed off by the signatories. Depending on the terms and value of the contract, the signing authority may change and has to be processed through proper approval structures.

Happy with the revised terms, Alice from Globex Corp along with the head of procurement at Acme Tech signs off on the bill of sale contract.

Pain points at this level


High pressure to deliver accurate contracts within a very short turnaround time.

5. Execute

The contract is formally signed using wet or digital signatures. The contract now comes into effect and the parties make sure they meet their obligations.

Globex Corp successfully delivers and installs the shipment of printers at Acme Tech’s offices as per the terms of the contract.

Pain points at this level


Running multiple, high-level reviews on contracts is impossible, increasing risk in the process.

6. Store

The contract is now stored for future reference and use.

Bob creates a docket for the bill of sale contract with Acme Tech and stores it safely on the Globex Corp’s internal servers.

Pain points at this level


Contract data are not stored at one location, making it difficult for teams to access the same information.

A lot of time is wasted trying to retrieve and reference contracts as the data is not structured.

7. Audit

Routine checks are performed to ensure that internal playbooks and guidelines are being complied with.

In the audit, Alice realizes that the new GDPR clauses have not been inserted in any of the vendor contracts including that with Acme Tech. They send an amendment agreement to include the new clauses in all of their vendor contracts.

Pain points at this level


Lack of a centralized database also makes it difficult for teams to uncover trends and insights that could potentially help in reducing costs and unlocking new opportunities.

8. Search and Reporting

Contracts are structured using metadata and tags for easier retrieval and detailed insights.

Bob can compare the details of Acme Tech’s contract with other similar contracts to find out trends.

Pain points at this level

As contracts are saved on siloed databases, it becomes difficult to navigate the data and run ad-hoc searches.


Lack of standardized storage patterns makes it impossible to segregate contracts based on different contract types, clauses, terms, etc.


Difficult to carry out granular searches on contracts due to lack of credible metadata, making it a challenge to identify trends and gain insights.

9. Renew

After completion of the contract’s duration, the parties can choose to renew the contract and continue business.

Acme Tech is happy with the quality of goods and services offered by Globex Corp, and decides to place a new order for printers with them.

Pain points at this level


Absence of reminders make it difficult to track important events, resulting in poor conversions and missed opportunities.

In the upcoming sections, we shall explore the meaning of contract management and automation, their impact on the contract lifecycle.

What is Contract Management?

Contract management is a system that manages the entire contract lifecycle from beginning to end. It is a composite workflow that consists of multiple sub-tasks, which follow guidelines and are connected by well-defined channels.

For instance, if Globex Corp was using contract management software, Alice could have instantly drafted a bill of sale contract by herself using a pre-approved template created by Bob previously. This would allow Globex Corp to jump directly to the review stage, thereby helping them close deals faster.

Where does Contract Management Software excel?

Standardization: The contract workflow methodology used is the same across the organization, allowing for better communication and collaboration between teams.

Volume: By making teams self-serving, contract management helps in-house legal teams take on larger contract quantities without increasing the headcount, saving on costs in the process.

Collaboration with Internal Stakeholders: With a unified communication channel in place, it becomes easier for teams to share information and review contracts.

Storage: The platform ensures that all contracts are stored on a centralized repository in a highly accessible and secure format, using tags and metadata. This way it becomes easier for teams to search and pull up contracts at a moment’s notice.

Tracking: It becomes possible to monitor key contract events efficiently, helping teams stay up to date with upcoming contract renewals and expiries.

Know more about - Enterprise Contract Management Software


💡 Did you know?

Even a simple excel spreadsheet can help you to track and manage your contracts. But, a purpose-built contract management software can help you become more effective by allowing you to delegate tasks and improving overall workflow visibility. Click here to learn more about contract management software.

In the meantime, here's a free resource to get you started!


What is Contract Automation?

On the other hand, contract automation is a modular process that has proper inputs and outputs that are focused on optimizing individual stages within the contract lifecycle. It helps improve visibility while at the same time reducing turnaround times.

For example, Alice could speed up the approval process by using eSignatures to inform and collect signatures from different parties.

Where does Contract Automation software excel?

Speed: Overall, contract automation eliminates the manual element to contract processes without compromising on the accuracy, thereby significantly reducing the turnaround time for contracts.

Tamper-proofing: Teams can control access to the contracts and also view who has made what changes when and where.

Collaboration with External Stakeholders: Approvals can be collected from multiple stakeholders sequentially or simultaneously using eSignatures.

Interoperability: By integrating into other enterprise software, such as, CRM, ERP, etc., contract automation software allows teams to adopt new technology without the hassle of breaking their routine.


💡 Did you know?

There are multiple free tools available that help you to automate contracts, such as IFTTT, calendars, etc. However, contract automation software like SpotDraft allow you to manage everything from a single dashboard! Click here to learn more about contract automation software.

In the meantime, here's a quick guide to help you get started on your automation journey.


The Difference

Contract Management

Contract Automation

  • Oversees the entire contract lifecycle
  • Optimizes individual stages within the contract lifecycle
  • Focus on standardization and reliability
  • Focus on speed and accuracy
  • Creates channels for collaboration and communication
  • Improves accountability and turnaround time
  • Can be replicated and highly scalable
  • Easy to integrate and operate

The Verdict

At the end of the day, contract management and contract automation are simply terms whose definition varies from teams to businesses depending on the work complexity and responsibilities. Ultimately, a business should select an option that prioritizes functionality over nomenclature and one that is based on the parts of the contract lifecycle that require optimization.

Selecting any one software will guarantee a total net positive for your business in the long run, despite the initial investment barrier. The technology will help your business teams save time, effort, and money when creating and executing contracts, while enabling stronger collaboration and faster approvals.