Report: Market Disruption Is Driving Demand for Contract Intelligence

December 19, 2022 Viji Doraiswamy

As anyone in business can tell you, recent years have been marked by continual disruptions. These disruptions have required businesses to rethink every part of their business. This has been particularly true with regard to their contracts.

When the pandemic hit, contracting was significantly behind other business processes in terms of digitization. The shift to remote work generated a spike in interest in contract lifecycle management (CLM) technology as businesses recognized that contracts were critical to their core operations.

That said, CLM is far more than a remote collaboration tool. At its most powerful, it can transform how businesses realize value from their relationship with suppliers, customers, partners, and employees. This explains why CLM has continued to see growing interest while enthusiasm for other technology softens.

Icertis believes that the latest evidence of this comes from a recent report from Gartner, “The 2022 Gartner® Critical Capabilities for Contract Life Cycle Management.

According to the report, “Interest in CLM remains high as Gartner sees a continual year-over-year increase in inquiries related to buying a CLM solution and improving contract management processes.”

According to the report, “Interest in CLM remains high as Gartner sees a continual year-over-year increase in inquiries related to buying a CLM solution and improving contract management processes.”

The growing interest in CLM should come as no surprise, given the consistent and persistent market disruptions occurring around the world. Icertis customers have leveraged contract data to address everything from supply chain shocks, to sanctions, to inflation.

As Gartner states, “Prolonged periods of market disruption and changing regulations increase pressure on organizations to improve efficiency and scalability in their contracting processes. More advanced CLM features, such as automated contract review, online negotiation and obligation management, help organizations increase efficiency and scalability.”

How Icertis Customers Are Leveraging Contract Intelligence in Today’s Economy 

The looming recession has only placed greater urgency on companies to deploy advanced contract technology. Contracts are the single source of truth for business information defining the supplier, customer, and partner relationships that drive business.

Advanced contract management software that delivers real-time insights into this critical business information allows companies to respond faster to challenges and opportunities—thereby being better positioned and prepared for the economic uncertainty that lies ahead.

With AI, companies can quickly transform their static contract portfolios into rich stores of structured data that can be analyzed and acted upon fast. At Icertis, we call this “contract intelligence.”

The value our customers are getting from the Icertis Contract Intelligence (ICI) platform can be segmented into three categories: 

  1. Find savings
  2. Drive efficiency
  3. Protect and grow revenue

Savings: With a single view across all supplier contracts, savings can be harvested by various means. First, companies can quickly find discrepancies between what was agreed to in a contract and what the vendor charges. Second, companies can ensure they take advantage of volume discounts and other pricing incentives. Third, total contract control allows companies to quickly pivot away from non-optimal suppliers and onboard new ones.

Drive efficiency: In its latest Marketscape for Contract Lifecycle Management, IDC found that, on average, legal departments can save the equivalent of nearly 10 full-time employees by deploying CLM technology. With the going rate for corporate legal counsel, this can quickly amount to seven-digit savings. As one legal operations leader noted about his company’s deployment of Icertis Contract Intelligence:

“We had seasoned commercial attorneys spending time reviewing NDAs. With Icertis, we have the right attorneys doing the right work—working on those multimillion-dollar deals. That’s huge, and it’s purely from implementing Icertis.”

Protect and grow revenue: For many companies, revenue is directly tied to their ability to deliver against what was promised to a customer in the contract. Contract intelligence technology structures and connects contract obligations so companies can ensure compliance and thus revenue. One Icertis customer users Icertis to track obligations across $13.6 billion in contracts and has seen significant uplift in revenue recognition from those customer relationships. In situations where contracts allow for inflation-related price adjustments, contract intelligence can also help companies protect against the value erosion that otherwise comes with higher input costs.

Conclusion

At times of disruption, companies must focus on their foundation; nothing is as foundational to commerce as contracts. They define what you buy, what you sell, and govern every dollar in and out of the business. If you don’t have complete visibility into your contracts, you can’t leverage contract terms to respond to new challenges. 

As we take in the conclusions of the Gartner Critical Capabilities report, we believe it demonstrates why contract intelligence is now a must-have technology for modern business. Particularly in the face of prolonged market disruptions, contract intelligence can better position organizations to utilize and maximize their contracts.

To learn more about the Gartner 2022 Critical Capabilities for Contract Life Cycle Management report and its insights into CLM solutions, download your copy here.

Gartner, Critical Capabilities for Contract Life Cycle Management, 17 October 2022, By Kaitlynn Sommers, Patrick Connaughton, Micky Keck

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