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Contract automation: what system to choose?

July 10, 2018

The momentum for automation is unstoppable and the contracting lifecycle will inevitably be caught up in this wave. Many are aware of the need to push forward with a contract lifecycle management (CLM) system – but they face a variety of challenges.

What is the contract lifecycle?

Very few organizations handle contracting as an integrated process. Virtually none have a ‘process owner’, responsible for overseeing the integrity of the lifecycle. This lack of definition and lack of ownership continue to make technology selection and implementation problematic. They have contributed to multiple failed implementations which have led many to question the value or applicability of automation – a view that contracting is just too complicated for technology.

Many organizations have also struggled to define required functionality or to appreciate user needs. This is reflected in low adoption rates and poor levels of integration with other systems.

Are the vendors at fault?

It is easy to blame the vendor community – and with more than 200 suppliers of CLM systems, the market is extremely volatile and confusing (especially if you aren’t sure what you want from the application). Because virtually all the suppliers are relatively small businesses, there has been a tendency for the customer to drive requirements, rather than the market guiding the buyer. This has resulted in systems trying to adapt to poorly defined processes. It has also led to systems with a plethora of functionality, which often increases complexity for users.

So where next?

With this background of past failure, poorly defined process, confusion over functionality and a plethora of choice, it is not surprising that buyers are hesitant to commit. The fact that most analysts and consultants do not understand contracting means that it is difficult to gain objective advice. This led IACCM to decide that it needed to step into the gap and support organizations in their automation efforts. In partnership with Capgemini, IACCM spent 8 months reviewing the market, surveying and interviewing suppliers, and conducting demonstrations to validate capabilities. This has resulted in three major steps:

  1. an authoritative definition of the contrqact management liifecycle
  2. an automation guide explaining overall background and categorizing functionality
  3. an on-line tool to support supplier analysis and selection

IACCM remains entirely objective in the advice it provides; there is no funding by the vendor community. The report and tool are also open access and will continue to be updated to reflect shifts in the market or in specific supplier offerings.

Later this week, IACCM will run a webinar setting out these developments and how to use the various materials we have developed. You may wish to join us – register at https://www.iaccm.com/events/register/?id=3149

 

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