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Contract Documents Have a New Meaning in the Digital Era
If you were asked to visualize a contract, would you think of a pile of paper with hand written signatures? If asked to visualize a digitalized contract, would you think of a scanned document at a digital contract archive?
Quite likely yes. In the old day contracts were signed papers. These papers had to be retained carefully for archives. Then arrived digitizing where contracts were converted from paper to a digital form such as a pdf-file and archived digitally. This sort of digitizing is not very interesting any more.
Today we buzz about digital transformation, which makes or breaks entire businesses. What is this new digitalization? What is a contract in the digital era?
Digitalizing Service Business
Truly digitalized contracts play an essential part in the forerunner continuous service businesses of today. Contracts are still agreed between the contracting parties just like in the old day, but the agreed pricing conditions and other contract terms are digitalized.
Thus, the conditions and terms of an agreement can now be digitally represented with rules. The rules automatically calculate pricing and drive orchestrated fulfilment actions depending on how the different factors actualize in the contract environment.
Pricing conditions, service delivery terms, service level agreements and other contract conditions of a digitalized contract can be extremely flexible. If similar levels of variability are attempted without a true service business system, it usually leads to Excel spreadsheets and Post-it notes becoming an essential part of the process.
As long as the rules can be defined and data of the prevailing factors can be obtained, the end results can be derived and driven automatically. - Even if factors are changing dynamically based on usage-volume, outcome, demand or the changing weather conditions... and different from one customer to another.
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The Digital Services Economy
We see it everywhere from one industry to another. What used to be products have now turned into services in many industry sectors. Devices have become an embedded part of the service, not a sold item. And what used to be a standard offering has now become both complex and variable. Is that good or bad news?