Almost half of all organisations involved in contract generation find that workflow is the most challenging area of contract management.
That's according to the 2017 State of Contract Management Report which is based on a survey of 1 409 organisations conducted by US-based SpringCM, a document management and workflow company.
According to SpringCM senior vice president Will Wiegler, given the difficulties respondents face with maintaining effective workflows managing contracts has become a growing concern for businesses and organisations of all sizes, particularly as contracts in a business become more numerous and complex.
While 46% of survey respondents reported that workflow was the most challenging area of contract management as they have to deal with contract cycles with a variety of durations, making a strong case for implementing a solution that can handle many contracts simultaneously with staggered start and end dates.
In addition, contract generation was also noted as an area of particular concern for 36% of respondents, and 64% of the respondents said that the contract approval process was also a problem in terms of causing deals to stall.
Respondents also reported that human error still impacts the contract process at about the same rate as last year (92% saying it plays a role ranging from sometimes to very often).
Despite the complexities involved in contract management, the survey found that e-mail, shared drives and Excel spreadsheets remained the most frequently used tools for managing contract-related tasks.
Nevertheless, the survey found that more companies were adopting automated contract management solutions, with 32% (compared to 26% in 2016) of respondents reporting that they were using a contract management solution.
"The growing adoption of automated contract management solutions is helping to accelerate the contract process, ensure transparency and visibility, and mitigate risk," Wiegler said.
As was the case in the 2016 survey, sales, legal and executive teams topped the list of the departments involved in the contract process.
One noteworthy development, however, is that 25% now reported that IT was involved in the process, showing an increased tendency toward leveraging tech solutions to get the job done.
"The findings in this year's report point to a broader recognition of the difficulties of managing contracts manually. We also see an increased adoption of contract management solutions to make life easier and make business processes more effective. But it's important to note that some respondents had issues with their contract management experiences," Wiegler added.
"The more contracts you are managing and the more that you have in your contract management system, the more impact you can expect from a properly implemented solution."
The reported noted that the implementation of a contract management solution is a cross-functional project that should include taking stock of all existing contracts and getting them into the system, understanding who needs to see them, and setting up automated notifications and other features accordingly.
"Your implementation needs to be comprehensive across teams and functions, and visibility needs to be granted to all the appropriate people within the business because the successful management of contracts will continue to be increasingly important in the future, both for increasing revenue through better business practices, as well as reducing avoidable losses through elimination of contract-related errors," Wiegler concluded.
Share