The results are remarkable. As WorldCC president Tim Cummins and CEO Sally Guyer note in their introduction to the findings, the benchmark report represents a “new dawn” for the practice of managing commercial agreements, with organizations from the C-suite down recognizing the huge impact contracts have on their operations.
“The dramatic events created by the pandemic have created an awakening in executive management, a recognition that contracts permeate the business and go to the heart of its efficiency and value,” Tim and Sally write. “They are right to focus. The data shows that an average 25% of the workforce is involved in some way with managing contracts. It reveals the growing cost of neglect – and the benefits that flow from investment and changed expectations.”
What kind of benefits? For one, companies that continue to invest in contracting capabilities see an 8% reduction in contract value erosion. In other words, by focusing on capabilities that ensure they realize the full intent of their contracts, these companies are seeing an 8% improvement in contract outcomes.
Other areas of performance impacted by a focus on better commercial and contracting capabilities include:
Speed: Companies that have invested in contracting, commercial capabilities, and improved data flows (like those experienced with contract lifecycle management technology) report that a contract’s average cycle time from bid to signed agreement became up to 80% faster.
Risk: Advanced analytics and data-flow capabilities provide proactive intelligence—an early-warning system for forestalling the costly risk of noncompliance.
Profitability: Organizations that invest in commercial and contracting capabilities are consistently demonstrating higher levels of profitability.
Given these kinds of enterprise impacts, it’s little surprise that survey respondents said they—as contracting professionals—are looking to demonstrate more value to the organization.
As shared during the report’s launch webinar between WorldCC and Icertis, a major priority for many contracting organizations today “is increasing strategic value and demonstrating relevance.” For many leading contract teams, technology is clearly seen as the route to that delivery.
Specifically, leading companies are expanding their use of contract lifecycle management (CLM) software that delivers advanced functionality for monitoring review and approval statuses, obligation management, and integrating contract data in other systems like ERP and finance. Indeed, since WorldCC last conducted a benchmarking report in 2019, the number of top-performing companies leveraging CLM integrations more than doubled, from 18% to 38%–a rapid rate of increase we expect to continue in the years to come.
Interestingly, another report, this one from Forrester, found that executive support is critical for enabling this kind of contract data flow across the company. It’s no coincidence that executive focus, contracting excellence, and outstanding commercial performance go hand-in-hand.
Ultimately, what this report captures is a moment in time when world events demanded organizations rethink their commercial and contract management, and technology emerged to meet the task—“technologies that were for the first time truly capable of addressing many of the more complex aspects of contracting and contract value management.”
There’s no going back. High-performing contracting teams, empowered by CLM technology, are now a must-have for every organization—with support from the c-suite down. As the report concludes, “We truly are at a moment when commercial and contracting excellence is within reach. The only requirement is to have the will, the passion, to make it happen.”
Icertis Remains a Leader in the Q1 2021 Forrester Wave
Icertis has again been recognized as a Leader in the Forrester Wave: Contract Lifecycle Management For All Contracts Q1 2021 report. This is the second consecutive Wave report to recognize Icertis as a Leader. Read the report and learn more about the impact of CLM and why Icertis has been named a Leader.