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Contract Management Automation: A Missed Opportunity

March 21, 2017

Organizations are struggling to drive adoption of their contract management systems and, for many, integration with other systems is proving problematic. As a result, the level of satisfaction with current systems is low, with a rating of just 4.2 out of 10.

This is among the early findings from an IACCM survey on the use and performance of contract management technology.

Although many systems offer a wide variety of functions, the actual functionality achieved is generally limited – for most, it is the repository functions of accessing and having visibility into agreements that is the primary benefit. Almost half are using the system as a store for standard terms and term options, including templates, and around 40% support review and approval. Less than one third are able to demonstrate an ROI from their investment.

Clearly these are not compelling statistics. Our research suggests that the problems are not necessarily with the software. While some systems are not performing well, the problems often arise because:

  • Organizations have not adequately considered their requirements
  • Organizations have not considered opportunities to streamline their process
  • Organizations have not focused on user needs and adoption

As a result, the primary users are within legal or contract management functions and there is no indication that most existing implementations will gain wider enterprise adoption. Many have already replaced systems, some several times, and almost half plan to do so again.

Most survey respondents are conscious of new technology developments – for example Artificial Intelligence, cognitive systems – that will substantially impact contract management, but more than two thirds have limited understanding of what that impact will be. Overall, less than 10% have implemented digital systems to streamline their contracts; more than 50% have no current plans for digitization.

In summary, most organizations appear to be struggling in their efforts to automate the contracting process. This is most likely because in many of them, contracting is still not viewed as an integrated process, but rather as somewhat disconnected steps, often with unclear ownership and responsibility. That is clearly not the fault of the software providers; it indicates the broader problem that businesses are still failing to get to grips with the opportunities that come from improved contracting and better performance from their trading relationships.

To participate in the IACCM survey and receive a copy of the final report, please visit



One Comment
  1. Bill Kohnen permalink

    Perhaps current contract management solutions fall short because they basically are just digital versions of legacy systems and process which are not all the effective today. I would suggest that things are at about saturation for those that want this type of solution. The next big leap will be AI/Cognitive systems that will actual handle 80% of what is currently done by people.

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