Trends in Contract Management
For the past five years, we’ve been surveying people who play a role in their organization’s contracting process to uncover the latest trends, pain points, and best practices in contract management. The SpringCM team led this effort historically, and since the acquisition it’s now being driven as an overall DocuSign initiative.
So this year, we surveyed 802 full-time employees in a range of roles, industries, and company sizes for our 2019 State of Contract Management—in and of itself proof that agreements are fundamental to doing business of every kind. And one of the first things that stood out was the number of organizations that are still using spreadsheets and manual processes to manage their agreements.
Strange as it sounds, in the state of contract management, contract management software users are still in the minority. In fact, the study shows that more organizations manage their contracts by using spreadsheet software than by using software purpose-built for contract lifecycle management (CLM). Indeed, 42% of our survey respondents still use email, shared drives, or a combination of all these methods.
Against that backdrop, it’s no real surprise that people also reported a series of challenges:
- 94% of people say that human error impacts the contract process to some degree—adding risk, rework, delays, and costs.
- 68% of people say that it takes them more than ten minutes to locate a typical contract—and, of the 39% who say they’ve given up locating a contract in the past, more than half (51%) cite tracking paper records as the reason.
- 65% of people say that their contract process has caused delays in closing deals—even though only 9% of our survey participants are actually in a sales role.
The biggest pains in the contract process are felt in approvals, clause management, and workflow—all of which can be made exponentially easier with a little bit of automation.
Interestingly, clause management ousted tracking out of the top-three-challenges list this year. So, it also makes sense that most of the respondents (61%) are receptive to the idea of using artificial intelligence (AI) to improve the contract process. After all, AI is already proving itself when it comes to making contracts searchable and extracting key terms. And of course, contracts need to be digital to reap the benefits of AI, so that supports environmental causes too.
As we’ve seen year after year, manual, disconnected contracting processes inherently create delays and inefficiencies, increase errors, risks, and costs, and frustrate customers and employees. But organizations that have taken steps to automate and connect the process—from preparing to signing, acting on, and managing contracts—are freeing themselves from those repercussions. In fact, they are gaining an early advantage over their digitally deficient competitors that may be seen as difficult to work with.
So if there’s one key takeaway from this year’s report, it’s this: There’s plenty of room for improvement and opportunities to be gained in the contract process for the majority of organizations out there. If you’re one of them, there’s no need to wait. The technology to do it is available now.
For more inspiration, download the complete State of Contract Management 2019 report.