A recent report by Huron Legal found that 57% of the legal technology and contract management professionals polled expressed concern about their company’s existing contract management procedures. The report is excellent and I recommend that people read it for themselves. But in addition to the lead statistic, I was also drawn to their conclusion that for most companies, “the contract management process is still a manual, slow, inefficient and ineffective process.” Coupling those points with the previous IACCM report indicating that proper contract management could improve a company’s profitability by the equivalent of massive 9% of annual revenue and I’m left with the conclusion that the majority of CFOs, CPOs and GCs can’t ignore this and will do something.
Companies are too smart to settle for slow, ineffective or inefficient processes when there is so much money to be gained or losses to avoid. If nature abhors a vacuum, then markets abhor inefficiency. The key now is what is that “something”? As I’ve written before, smart companies can sometimes miss the mark when they try to only use technology to solve the contract management lifecycle challenge or they don’t think they can use BPO tactics on their processes, or they don’t attack the full cycle. We counsel our clients on the right steps for them and a transformation roadmap to increased value from their contract management processes.
The study and personal experience also lead to the conclusion that companies are actively acknowledging the problem, which is the first step to action. We just started working with a CFO who within being presented with the challenge, immediately “got it” and jumped right into problem-solving mode and took action to get expert help on processes, technology and people. Call me an optimist, but I’d like to think that is the trend.