The first question every business asks when considering a new technology is: What value will it deliver for our enterprise?
But if your company is selecting a contract lifecycle management (CLM) solution, the more appropriate question is this: What value do we want the technology to deliver: Do we need contract management software just to search, store and author contracts? Or do we need a holistic contract management platform?
TheProven Value of Enterprise Contract Management
This is the more appropriate question because the value of contract management software is well established at this point. Consider Forrester Research's latest report on CLM, "The Forrester Wave: Contract Lifecycle Management for All Contracts."
In the report, the analyst firm identifies six ways that CLM solutions, as a category, deliver value for users. These areas are derived from a comprehensive review of CLM software offerings on the market.
Areas identified include improved contract availability, improved contract analysis, faster and easier contract authoring, improved sales and procurement processes, better data connection between other systems, and better visibility into contract processes and performance.
These capabilities are important, but given where technology is today, they should be considered table stakes for CLM solutions: the baseline of capability on the market today.
Contract Management Software vs. a Contract Management Platform
Therefore, when it comes to CLM solutions, the real question is how much value your organization is looking for—which is where an enterprise-wide contract management platform differentiates itself from simple CLM software.
With CLM software, contract management continues to be transactional by nature: A combination of processes, systems and people focused on standard functionality like requests, authoring, execution and basic reporting.
By contrast, a contract management platform takes a holistic approach to contract management. It models all business processes to create a looking glass into the entire enterprise, including all of its risks and opportunities.
With a true CLM platform, key value-adds include:
- All contracts at the center of, not just connected to, key processes: A contract management platform not only connects contracts to other systems but puts them at the center of key processes–for example sales, sourcing and risk management—to fully leverage their status as the single source of truth for commercial agreements.
- All terms, rebates, discounts, commitments, obligations and SLAs are automatically surfaced and enforced through AI-enabled semantic language understanding: A contract management platform can automatically identify these key terms and commitments and enforce them throughout the enterprise.
- Deep artificial intelligence, machine learning and analytics: With these tools, a platform can extract risk and opportunities for value across all contracts and track risk and compliance throughout the lifecycle of the contract, not just at execution.
- Deep configuration capability: A contract management platform ensures the "right" user experience for every user to allow self-service, minimum touch contracting. It also can pull and push data between contracts and surround systems such as CRM, CPQ or procurement or sourcing system.
In short, a contract management platform helps enterprises completely rethink how they approach contracts, and thus maximize their value.
So again, the question is not how much value a CLM solution can provide. It is how much value you want from it.
To learn more about what a contract management platform can do for your enterprise, contact one of our platform specialists today.