The speed of business in the information technology (IT) and professional services industry is accelerating and providers who cannot quickly react to changing market conditions are at a serious disadvantage.
Consistent on-time performance is critical, especially as businesses contract ever-more essential functions to IT and professional services providers. Meanwhile, delays in delivery are costly for both the client and the provider. In an industry that is fundamentally based on customer service, such delays are bad business: A sustained pattern of delays or roadblocks can fray a relationship. Repeated delays can diminish a provider's reputation, in turn harming bids for future work.
Why contracts contribute directly to speed
Contracting plays a critical role in the IT and professional services industry, since it is the contracts that truly define how these companies engage with their customers.
Most client/provider relationships in the IT and professional services industry are governed by master service agreements (MSAs), which outline all key information for the relationship, including business units involved, customer and legal entity details, contract value, service, and payment and pricing terms.
Projects operating under these MSAs are defined by statements of work (SOWs). SOWs state performance benchmarks the provider commits to reaching throughout the lifecycle of the contract. Similarly, an engagement letter (EL) and general business terms (GBT) are the common agreement types used for engagements related to tax, audit and assurance projects.
In other words, the entire commercial motion of these service providers is dictated by an ecosystem of contracts, with information that must flow down from the top-line MSA or EL to delivery.
The benefits of contract lifecycle management
The back-and-forth contract process between client and provider involves many steps, each one offering the possibility of delay. What happens when contracting is inefficient? The example of one client, who sought us out for help, is illustrative.
This major technology services provider was using a manual contracting process to establish legal and licensing language with customers. Due to the inherent inefficiencies of the process, however, it was taking the company an average of five months to complete contracts, creating major delays in starting the engagement and delivering value for the client.
It is because of delays like these that advanced contract lifecycle management (CLM) is a quickly emerging solution being adopted by leading professional services companies to replace manual contracting processes. With CLM technology, contract workflows are streamlined accelerating and error-proofing the contracting process. Contract data is tracked and performance can be optimized.
Organization-wide CLM allows for self-service contracting to reduce overhead and improve cycle times, while also establishing a rules-driven contract workflow to ensure governance and compliance. Consider how these features could impact your business:
- With a central repository for contracts, all stakeholders have appropriate access to the system, providing unprecedented visibility and streamlining review processes—even between departments.
- Bulk actions can be taken on contract templates and clauses to help companies stay compliant.
- And after a contract is executed, organizations can use the system to track contract performance, including a global view of service level agreement (SLA) fulfillment with a single client or across the business.
CLM allows organizations to turn their contract repositories into the single source of truth for business risk, compliance, and performance.
Get up and running faster with a CLM system
With the recently introduced Icertis Contract Intelligence (ICI) for IT & Professional Services industry vertical solution, service providers can now be up and running with CLM in weeks rather than months. The tailor-made solution is built on the ICI platform and leverages Icertis' decade-plus years of experience working with IT and professional services industry leaders. It is designed to speed solution delivery by up to 30%, increasing business performance, and improving contract excellence.
The solution is designed based on industry best practices. It includes pretrained AI applications, obligation management, persona-based contract type definitions, metadata, workflows rules, and CRM integration adaptors.
This new industry vertical solution speeds MSA, SOW, and EL workflows and approvals with self-service capabilities accessed from within CRM systems, so that service organizations can sign contracts and begin engagements faster. With improved contracting speed, service providers have freed-up capacity to prepare better-vetted bids in response to more RFPs.
Organizations gain visibility into obligations and dependencies to ensure a deadline or delivery is not missed and contract potential is realized. The tailored solution allows providers and clients to easily collaborate on contracts, making for a faster and more transparent experience for all stakeholders. Subcontractor work can be bid out more quickly, accelerating time-to-value and ensuring obligations are met. And with AI-powered negotiation and insights, companies can quickly analyze contracts on third-party paper to discover risks and opportunities hidden inside them.
Real-world experience from Icertis customers bears out the value of ICI for IT & Professional Services.
Genpact, a global professional services firm, implemented the ICI platform to automate and manage its entire end-to-end customer contract lifecycle, from request to expiry. With the ICI platform in place, Genpact cut contract cycle times by more than 50%. The company generated 17,000 contracts in the first 18 months of implementation.
And Genpact is not alone. A multinational IT and outsourcing company decreased its contract turnaround times by 40% with ICI. An international development consulting firm reduced its contract administration costs by 50%. And a global IT services provider gained 100% visibility into all its contracts and legal terms.
0%Reduction in contract turnaround time0%Reduction in contract administration costs0%Visibility into all customer obligations
Outcomes Experienced by Icertis Customers
The IT and professional services industry is contract intensive. Leaving contracts to manual processes prevents these companies from reaching their full potential. They need CLM technology to stay focused on their clients as the speed of business increases, now and into the future.
For more insights on how advanced contract lifecycle management can benefit your business, download a copy of our free eBook, Contract Intelligence for IT & Professional Services, here.