Research firm Gartner predicts that enterprise software spend will grow 7.2% in 2021. In a recent article in ZDNet, Gartner research VP John-David Lovelock said, “Companies have more IT to do and less money to do it. As a result, CIOs are spending more in areas that will accelerate their digital business, such as IaaS or customer relationship management software.” As organizations start to make their 2021 budget requests, now is the time to make the case for a modern contract management software solution.
As mentioned in prior blogs, the World Commerce and Contract Association estimates that poor contract management continues to cost companies up to 9% of their bottom line. In an era where every dollar is being scrutinized, a modern contract management system helps address a number of issues including:
Visibility – Organizations can’t manage what they can’t track or see. Any new spend should be data-driven and map to the business’ overall KPIs and goals. A modern contract management system includes a digital and centralized cloud-based repository to store, manage, search and secure all contracts and contract data, as well as ways to collaborate effectively and maintain version control.
Manage spend and resources – The best contract management platforms allow organizations to utilize data that they already have. With a modern contract management system, businesses can extract value from the information within their contracts, optimize those legal agreements, and then provide a tangible ROI to the business. Contract reporting is one way to guide decision making around spend, and gives leaders the opportunity to investigate and solve issues that get identified. It can help guide important decisions and build an audit trail of business activities including reports that document annual budgets, sales, and planning initiatives.
Reduce risk – Unstructured data in contract management is not only tedious to manage, but also risky. Overlooked penalties, missed obligations, lost revenue, lost savings, lost contracts, unexpected renewals and expirations, and hidden clauses can leave a business open to unknown damages. A modern contract management system greatly improves compliance and speed with automated alerts for important contract dates and milestones, cloud-based clause and template libraries, as well as regulatory audit trails.
Pressure to digitally transform – Digital transformation will likely continue to be one of the top strategic priorities for organizations in 2021. Digital contract transformation helps businesses harness the data in their contracts to deliver the actionable business insights necessary for their overall digital transformation.
As you make the case for your 2021 budget, understand that with contract management software, your business can get additional value out of the vast amount of data in contracts that already exist. Modern contract management can arm businesses with the information necessary to make data-driven decisions that improve and optimize business processes in 2021.