The pressure is on. Regardless of your industry, you are expected to deliver more with less: more revenue with less cost and more results with less risk.
The good news for Legal and Sales Operations teams is that intelligent contract management can help you meet these challenges, with substantial benefits flowing to your bottom line.
Perhaps, the first question anyone might ask about automating contracts is whether it will really move the needle. And, based on IACCM and Aberdeen research, the answer to that question is a big “yes”. Aberdeen states that “Poor management of contracts in the opportunity-to-order cycle results in revenue leakage between 5% and 9%.”
The International Association for Contract and Commercial Management (IACCM) cites a similar number: according to their research, 9.2 percent of annual revenue is the price corporations pay for managing their contracts inefficiently.
For a $1 billion company, 9 percent of revenue translates to $90 million of potential benefit from contract automation and process improvement.
In practical terms, intelligent contract management helps you in three major ways:
First, it allows you to know more about your contractual rights, risks, obligations and process – which means you can identify, prioritize and fix costly problems that were previously hidden in the fine print.
Second, it allows you to risk less across your contract portfolio, through milestone reminders, more consistent use of limitation of liability and other protective clauses, and reduction of errors and compliance failures.
Third, it allows you to do more deals through automated, self-service, pre-approved contract drafting, resulting in greater revenue per quarter
For most businesses, step one is to get all your contracts in one place and extract at least some basic information about the key terms of those agreements. Armed with improved insight into your contracts you now have some chance of answering important questions like…
Once you know more about your contracts, you can start to manage or eliminate the biggest risks, including:
And last but not least, a fully featured intelligent CM application allows you to get more contracts drafted, negotiated, approved and executed, by streamlining and automating key steps in your process:
So how much will your company benefit precisely? This depends on a number of things, so you need to ask yourself some questions:
Typically, Exari clients see the following results:
To learn more about the benefits of CM and some of the lessons learned from a real world implementation, come join Terry Lee, president of Exari, and Thien Dinh, vice president and deputy general counsel, RMS, for a webinar that expands on these themes.