ROI Case File No.596: They Wanted to Digitize the Contracts, but Had Never Asked Who Was Struggling and How Much
They Wanted to Digitize the Contracts, but Had Never Asked Who Was Struggling and How Much
Chapter 1: Paper and Electronic Are Mixed, but the Order Won't Settle
"We're considering digitizing our contracts and bringing in a management system."
Susumu Suida, legal department manager at TechNova, said this as he laid out the situation. "Paper contracts are bound in files and stored. For electronic contracts we use CloudSign, but the older paper is untouched. Every time we need something we walk to the archive and page through binders. The executives are interested too—this is a high-priority matter."
"Where do you plan to start digitizing?" Claude asked.
"With the ones drawn up and stored at headquarters under the representative director's name," Suida answered. "After that we want to extend it to each site. But some sites are telling us to hurry, while others say they aren't struggling as things are. We can't reach agreement on where to begin."
"Have you asked and measured who is struggling and by how much?" I confirmed.
"...We haven't measured it," Suida answered. "We hear that things are hard to find. But which person in which department, to what degree, and where nobody is struggling at all. We've never turned it into numbers."
"Impressions alone won't produce an order," I replied. "Let's break this down with NPS."
Chapter 2: NPS Asks—Measure the Gap Between Promoters and Detractors
"This case calls for NPS."
Claude wrote "Promoters / Passives / Detractors" on the whiteboard.
"NPS—the Net Promoter Score—is a framework that asks, as a score, whether someone would recommend something, then subtracts the share of detractors from the share of promoters to reduce satisfaction to a single number," I explained. "The crux is applying it to internal systems as well. Ask each department whether they'd recommend today's contract management to a colleague, and where the real pain is lines up as numbers. You no longer have to start with whichever department is loudest."
"First, let's measure the current cost," Gemini said, opening ROI Polygraph. The data Suida had provided went in.
"The monthly cost is out," Gemini read off. "Labor for searching contracts, retrieving them from the archive, and handling copy requests averages 175 hours a month; at ¥4,000 an hour, that's ¥700,000 a month. Unfavorable auto-renewals and lost business from missed renewal deadlines average ¥420,000 a month. Back-and-forth confirming where the original is held, because paper and electronic are mixed, averages ¥340,000 a month. Concentrated load when gathering materials for audits and legal reviews averages ¥300,000 a month. Handling queries caused by differing storage practices across sites averages ¥280,000 a month. Total: ¥2,040,000 a month. Annualized, roughly ¥24,480,000."
Suida stared at the figures. "I was only looking at the search burden. Once you add the losses from missed renewal deadlines and the load at every audit, it comes to this much."
"Then let's design it with NPS," I continued.
[Ask—ask each department whether they'd recommend today's management]
"First, asking," Claude said. "Headquarters legal, sales, procurement, and the administrative departments at each site. Have them answer, as a score, whether they'd recommend the current way of finding contracts to a colleague. The words 'we're struggling' can't be compared; scores can."
[Detractors—ask the low scorers what happened]
"Next, the detractors," Gemini continued. "Ask only the people who gave low scores what actually occurred. Walked to the archive and couldn't find it, didn't notice a renewal deadline, couldn't tell where the original was. Behind a low score there is always a specific incident."
[Promoters—find what to preserve in the reasons behind high scores]
"After the detractors come the promoters," I continued. "The range that runs entirely through CloudSign scores high. Ask why, and you find it's because signing through storage is unbroken. Move that shape over to the paper side. Not breaking the parts that work is also design."
[The gap—fill the places with the widest gap first]
"Last, the gap," Claude continued. "Subtract the share of detractors from the share of promoters. The department with the lowest result is the place to touch first. The order is decided by numbers, not by executive interest or by volume of complaint. The order of the rollout is decided by the same gap."
[Simulating the investment recovery]
"Let's run the numbers with ROI Proposal Generator," Gemini proposed.
- Initial cost: Department-level satisfaction survey, building the contract-management system, digitizing and tagging past paper contracts, CloudSign integration, implementing renewal-deadline management, and permission design—¥5,000,000 in total
- Monthly cost: System usage plus ongoing storage and operation—¥230,000 a month
- Monthly savings: Reduced contract searching and retrieval handling = ¥490,000 a month (assuming a 70% reduction), prevention of missed renewal deadlines = ¥340,000 a month, elimination of back-and-forth over the location of originals = ¥260,000 a month, more efficient material gathering for audits and legal reviews = ¥240,000 a month—¥1,330,000 a month in total
- Net monthly savings: ¥1,330,000 − ¥230,000 = ¥1,100,000 a month
- Payback period: ¥5,000,000 ÷ ¥1,100,000 = approximately 4.5 months
"That's a payback of four and a half months," Gemini summarized. "What works is that you don't leave the difficulty as an impression—you turn it into a score. Start with the loudest site and you spend effort where nobody is actually struggling. Line them up by gap, and the most painful place gets filled first. The investment doesn't swing at air."
Suida looked over the numbers. "I thought digitizing would improve everything. Without measuring who's struggling and how much, the order doesn't settle either."
"NPS is a tool for setting priorities by the gap between promoters and detractors," I replied.
Chapter 3: A Deployment Plan That Lines Things Up by Gap
"Let me lay out the approach," I said, standing at the whiteboard.
"Month one—satisfaction survey by department and site, and interviews on the reasons behind low scores. Month two—calculate the gaps and fix the starting order and target contracts. Months three and four—digitize and tag headquarters contracts under the representative director's name. Month five—implement CloudSign integration and renewal-deadline management. Month six—re-measure the gaps and verify results. Month seven onward—roll out site by site, starting from the lowest gap."
"Wouldn't it be better to do it company-wide at once, while executive interest is high?" Suida confirmed.
"Do it all at once and the effect looks diluted," Claude replied. "Include the sites that aren't struggling and you pay company-wide costs while part of the numbers don't move at all. Fill the lowest-gap places first and the first three months produce a visible change, and that result becomes the material for approving the next budget. It's precisely because there's interest that shipping where it works comes first."
Suida took notes as he spoke. "Measure who's struggling before digitizing. I can see the sequence now."
Chapter 4: The Day the Gap Became Visible and the Order Was Settled
Ten months later, a report arrived from Suida.
Contract searching changed dramatically after digitization. "Nobody goes to the archive anymore. Search by counterparty name and paper and electronic line up on the same screen," Suida wrote.
Missed renewal deadlines stopped too. Notices now arrive ahead of an auto-renewal. "Contracts no longer roll on for another year under unfavorable terms. 'Too late by the time we noticed' is gone," the report said.
The largest change showed up in how the order was decided. A state of deciding by volume of complaint became a state of deciding by gap. "The site telling us to hurry wasn't necessarily the one struggling most. Once we took scores, the procurement department—which had said nothing—came out lowest," Suida wrote.
The re-measurement showed the effect in numbers as well. The gap for the departments already addressed improved clearly. "Instead of reporting 'we're glad we did it,' we can now report how many points the score moved," the report said.
As a side effect, the same question started being used on other internal systems. The habit of asking whether people would recommend something took root. "Instead of 'is it convenient?', we started asking 'would you recommend this to a colleague?' The answers got honest," Suida wrote.
The final line of Suida's report read: "I thought the trouble with contract management was that paper remained. But the real problem was that we said we wanted to digitize and had never asked who was struggling and how much. The moment we measured the gap with NPS, the place to start was decided. Before digitizing, turning the difficulty into numbers came first."
The day a company that had never asked who was struggling became a company that could set an order by gap, contract digitization had changed from a company-wide sweep into a design that sets priorities by the gap between promoters and detractors, the report noted.
"Consultations about digitization usually arrive in the form of 'we want the paper gone.' But there is a question to ask before starting. Have you turned who is struggling and how much into numbers? What NPS asks is promoters, detractors, and the gap between them. Line things up by gap, and the order is decided by the size of the pain rather than the volume of the complaint. The day a company that spoke in impressions could turn its difficulty into numbers, what changed was not the method of storage but the very perspective of measuring and comparing satisfaction."
Related Files
Tools Used
- ROI Polygraph — Visualizing contract-search labor, losses from missed renewal deadlines, and the back-and-forth cost of locating originals
- ROI Proposal Generator — Investment-recovery simulation for contract digitization built from prioritizing by the gap between promoters and detractors
