Contracting and commercial professionals: The newly released World Commerce & Contracting Benchmark Report is cause for celebration.
For years, you have been evangelizing the need for a different approach to contracts and commercial management – an approach that recognizes the turbulent, opportunity-rich, and digital world we operate in.
Your work is paying off: In the report, Benchmark survey respondents report significant improvements across the board in the capabilities their teams now have at their disposal to ensure commercial relationships are correctly and compliantly memorialized in contract language and then fulfilled in practice.
To cite just a few stunning results: respondents reported a 92.7% increase in the ability to assemble contracts from a clause library; a 137.5% increase in access to digitized contract playbooks; and a 60.9% increase in use of artificial intelligence/machine learning. All of this is compared to just two years ago. Improvements should continue: 40% of respondents say they are contemplating buying a new CLM system in the next 12 months.
Perhaps most importantly, 91% of executives now recognize that improving commercial and contracting capabilities is important.
So with contract management capabilities expanding and leadership engaged, is our work done? Hardly—this report is also a call to action, a call to double down in the pursuit of the unified approach to contract excellence that continues to prove elusive.
In this year’s survey, 42% of respondents report there is no clear responsibility for contract management oversight in their organization. As WorldCC leaders Tim Cummins and Sally Guyer aptly put it in their introduction: “Contracting is a lifecycle. Yet it remains misunderstood and murky for most.”
Without enterprise-wide ownership, enterprise-wide improvement can be nearly impossible. As in years past, contracting suffers in no small part—and with no small amount of irony—because it is too critical to a business. It cuts across too many departments (read: every department) and too many employees (29% of a company’s headcount, according to WorldCC’s latest calculations), for leaders to get a handle on the scale of transformation needed.
Yet that doesn’t change the fact that contracts are critical to an enterprise, and becoming more so: As the report details, the use of “as a service”, “outcome-based” and other innovative contract types are surging. Yet these revenue models only work if contracts are properly managed post-execution.
To my mind, the worst-case scenario for organizations is that they will attempt to address the clear need for better contracting outcomes through technology alone—paying little mind to the people and processes that are required to ensure that technology delivers its intended value.
As commercial and contracting professionals, you have the power to avoid this scenario at your organization. Use this benchmark report to reach across to other departments and start conversations about what contracting excellence looks like. Who’s on the team? What training is needed? What processes can be automated? Where is there murk, and how can we clear it?
Most importantly, as we ring in this new year – what does success look like and when can we really celebrate? I’ll bring the champagne.