Digital Contracting Is Now Make-or-Break for Businesses

Icertis is a Business Reporter client.

Adoption of contract management software is surging as companies future-proof themselves against continued business disruptions.

If you think about it, contracts are the foundation of commerce. They define every dollar that comes in and out of a company—from an enterprise’s suppliers to its customer relationships, to how it manages its IP. As the pandemic raged over the past year, and organizations had to confront broken supply chains and rapidly changing business models and situations, contracts and contract data became critical tools to respond immediately to new challenges and opportunities—assuming organizations had access to their contracts and contract data.

Take the example of one of our clients. Prior to 2020, this Fortune 500 IT services company had embarked on a journey to digitalize its contracts and contracting process to better track commitments and responsibilities across thousands of clients. After Covid-19 hit, this effort proved invaluable. Our client needed a systematic approach and response to disruptions, which it achieved through contract lifecycle management (CLM)—identifying impacted contracts, finding critical clauses and gaining a deep understanding of their obligations and opportunities.

The client’s senior director of contract risk lifecycle management described CLM as being “instrumental in helping our organization be as calm as we could be as the contingency plan started getting underway.”

Unfortunately, this particular client’s experience has been more the exception than the rule, as many companies have lacked digital contracting capabilities.

The extraordinary disruptions caused by the outbreak made it clear that many companies were being held back by the limits of their ability to handle contracts effectively. Organizations struggled to respond in real time to uncertainties, and the contracts they needed to execute in order to pivot to new business models got stuck in long approval cycles. At the same time, those contracts failed to bring maximum value, due to both ineffective negotiations pre-execution and missed value recognition post-execution—all at a time when reducing risk—and finding cost savings and revenue opportunities—was crucial.

Growing interest in contract lifecycle management

To address these challenges and risks, many organizations have followed our client’s lead and turned to contract management technology. CLM solutions saw a 40% increase in interest in 2020, according to a leading analyst firm. Clearly, this was due to an increased urgency for a solution that could provide structure for and visibility into enterprise contracts.

While the path the pandemic will take in the months and years ahead remains uncertain, what is clear is that the imperative for digital contracting capabilities—and the business intelligence those capabilities provide—is here to stay.

Indeed, just as enterprise resource planning (ERP) and customer relationship management (CRM) in recent decades became critical for business success, a robust CLM platform has become a must-have to respond to the accelerating speed of business and increased commercial risks.

A global study by Forrester found that CLM “had gone from being a nice-to-have to critical-to-have.” The research firm found that the C-suite is increasingly relying on contract insights and intelligence to make critical business decisions, and that those with mature contracting processes are leveraging CLM to gain strategic advantage.

“More mature firms treat contracts as the beating heart of their business relationships and they use CLM to connect to core business applications, integrate with transaction systems and inform key business decisions,” the study found. “These leaders move beyond static analysis and reports on contracts to operating with a dynamic and evolving understanding of the risks, entitlements and obligations in their contract portfolios.”

Because the impact of contracts spans the organization, the benefits of an advanced CLM solution extend well beyond contract processes themselves. Armed with the breadth and depth of data gained from the right CLM, business leaders can have confidence that they are managing risk and the bottom line. Having real-time, comprehensive access to their full portfolio of contract information, leaders can be more agile in the face of rapidly changing market conditions.

Turning contract information into strategic advantage

Icertis doesn’t see contracts as mere problems to be solved, but as opportunities for strategic advantage. The Icertis Contract Intelligence (ICI) platform empowers organizations to respond to new opportunities faster, improve revenue, automate compliance and reduce risk, and gain complete visibility and deep insights into contracts anytime and from anywhere. With ICI, companies across sectors have reduced contract cycle times by up to 92%, reduced contract administration costs by up to 50% and improved compliance by up to 94%.

One particular customer, a Netherlands-based data company, leveraged the ICI platform’s AI capabilities to discover hidden insights across its large body of sales agreements. The company digitized 70,000 legacy contracts using the OCR and AI embedded in its Icertis solution. As a result, it was able to quickly extract all relevant information that delivered insights into past customer interactions. This enabled the sales team to close bigger and better deals through renewals, upselling and cross-selling.

When selecting a CLM platform, it is important to see its standing among leading analyst firms. Named a leader by major research and analytical firms, Icertis belongs on every shortlist of CLM vendors. Our strong performance in these and other analyst rankings is driven by two factors: our industry-leading approach to contract technology, and our unmatched ecosystem of partners.

Icertis takes an open-API approach to its platform, allowing it to seamlessly integrate with every leading business application. These integrations provide businesses with easy access to critical information, enabling better decisions within the enterprise application environment of their choice, without losing productivity by switching software. This means that contracts can be understood in the context of the systems they power—ensuring that the purpose of every agreement is fully realized.

The incredible flexibility of the platform has led to strong partnerships with both technology companies that integrate with ICI and systems integrators that work with our shared clients to deliver dedicated CLM expertise and maximize the value of their CLM deployments

Recently, the director of global partner development at an American multinational tech company reflected on why CLM is must-have technology, and why Icertis is the must-have CLM: “As a strategic global partner, Icertis has delivered advanced contract management capabilities on the cloud and been recognized as the category leader by two leading analytical and research firms. Combining category-leading solutions with global delivery as a partner will further mature CLM and deliver previously unrealized benefits to our customers.”

Transform the foundation of commerce with Icertis

As companies prepare for post-pandemic growth, an advanced, future-proof CLM strategy must be a priority. Contracts are the foundation of commerce, and CLM has the potential to transform the foundation of commerce so your organization can move faster, realize value and drive compliance.

Companies with mature contract processes and robust technology are already reaping the benefits of CLM; those that aren’t are at serious risk of falling behind.

To learn more about CLM’s emergence as a must-have technology, we invite you to access this complimentary report from Forrester: Contract Lifecycle Management (CLM): From Nice-to-Have to Mission-Critical

— Industry view from Paul Gleeson, Senior Vice President, Global Alliances, Icertis

This article originally appeared on Business Reporter. Image credit: iStock–id1293740125