The consulting and information technology (IT) services industry has always been competitive, and it's only getting more so.
Today, service providers operate in a commercial environment defined by amplified customer and employee expectations and increased security needs.
To remain competitive in a world of dispersed operations, these companies need to deliver for clients anywhere. The key to this is optimized systems. There is little room for error, and with the demand for Contract Management Software surging they don't want to get left behind.
Inefficient contract management, especially during negotiations, hampers optimized performance and makes competing in this environment difficult. Contract templates that are difficult to modify to include specific requirements, or contracts that meet client requirements but expose the provider to commercial, regulatory, or reputational risk, become significant liabilities in a competitive industry.
The Role of Contracts
Contracting plays a critical role in the efficiency and performance of the consulting and IT services industry. Contracts define what companies do and the obligations they owe and are owed. Contracts are the linchpin for all business relationships.
Most client/provider relationships are governed by master service agreements (MSAs), which outline all essential information for the relationship, including business units involved, customer and legal entity details, contract value, service, and payment and pricing terms.
Statements of work (SOWs) define projects operating under these MSAs. SOWs state performance benchmarks the provider commits to reaching throughout the contract's lifecycle. These documents contain critical business information that defines client engagement.
The need for Contract Lifecycle Management
The question is: How does a company harness this data and leverage it for performance? One emerging solution is a contract lifecycle management (CLM) system.
Already adopted by leading consulting and IT services companies, an organization-wide CLM solution establishes a rules-driven contract system that promotes efficiency by turning its contract repository into a single source of truth for business risk, compliance, and performance.
With a central CLM, all stakeholders have appropriate access to the contracts system, providing unprecedented visibility and streamlined review processes—even between departments.
How Icertis Contract Intelligence Can Help
Icertis Contract Intelligence (ICI) is an organization-wide contract management solution that enables consulting and IT services firms to get the most value from their contracts and the contracting process. ICI gives a company complete visibility into its contracts, providing a single source of truth for all its client, partner, and vendor relationships.
With ICI, leaders can coordinate or delegate efforts across departments, pool resources to meet common contracting goals, and significantly reduce contract administration costs. Thanks to this end-to-end contracting solution, service providers avoid losing revenue in back-to-back contracting scenarios.
ICI's advanced analytics can identify the performance-based incentives embedded in contracts and cross-reference them with financial data. This ensures that the provider receives the compensation to which it is entitled, without incurring penalties due to missed deadlines. And with improved contract data, companies can use past contracting data to negotiate better deals.
One international development consulting firm was able to realize firsthand the powerful performance impact of ICI.
The company, which works with contractors in 35 countries coordinating humanitarian aid projects, had a legacy contract management system that did not integrate with its customer relationship management (CRM) system. This created inefficiencies in how customer data flowed into contracts. By implementing ICI, this organization automated repetitive contract actions through CRM and enterprise resource planning (ERP) integrations, and reduced its contract administration cost by 50% while eliminating errors.
The services industry is only getting more competitive. Leaving contracts to manual processes means exposing your consulting or IT services company to inefficiencies that can hamper your ability to compete. Companies need to optimize their performance to enhance their competitive edge in this increasingly competitive industry.
With CLM technology like Icertis Contract Intelligence, you can significantly enhance your performance while reducing risk and improving governance and compliance. For more insights on how advanced contract lifecycle management can benefit your business, download a copy of our free industry overview eBook, Contract Intelligence for IT & Professional Services, below.