Ultria reached out to a large audience from the Legal Operations and Contract Management function with questions around their contract management profile, processes and challenges. We wanted to get a first-hand understanding into the level of maturity companies stand at when it comes to advances in managing their contract operations, compliance and performance.
Before we dive into the observations from our survey, let us take a brief look at our audience profile:
The majority of the respondents taking the survey were from legal operations and contract management functions. The remaining represents the other functions such as procurement, finance and IT.
40% of all respondents were from the senior level management (legal counsels) while 60% were from the middle-level management (contract manager, procurement supervisor, etc.)
Our respondents come primarily from companies with annual revenue of over $1 billion. Only a small proportion of companies employing our respondents have revenue of less than $1 billion. The primary reason for addressing such high revenue organizations was their high number of dealings in contracts on a month-on-month basis. With a high number of contracts, it becomes necessary for companies to not rely just on manual contracting processes but to opt for higher efficiency, automated processes to standardize and enhance the contracting processes throughout a contract’s lifecycle.
After carefully analyzing responses, we came up with the following observations:
WHO OWNS CLM?
Notwithstanding the respondent job titles, contract management in the organizations they represented was found to be primarily the responsibility of legal team (40%), followed by procurement function (27%) and contract management function (19%)
HOW TECH SAVVY ARE ORGANIZATIONS WITH THEIR CLM?
- Digitization of contract management shows to be a positive trend and more than 45% companies are inclined to explore new and digitally promising options in contracting.
- However, most of the organizations are still at a very primary level of maturity i.e. adoption of contract repository (64%). Large companies with revenue of more than $1 billion are amongst the majority who are fast advancing towards more mature contract management solutions.
WHAT ARE THE BIGGEST PAIN POINTS?
- Delays in contract approvals have been identified over three times more often as a big pain area compared to review and version management, while, tracking those approvals has been marked over four times more often as a big a pain area compared to review and version management
- Searching for existing contracts has been identified most often as a big pain area (5 times higher compared to regulatory compliance management) and contract milestone tracking comes a close next (4 times more prevalent as a big pain area compared to regulatory compliance management) when looking at the challenges across the contract lifecycle.
CLM’S ROLE IN AN ORGANIZATION
The contract management function is looked upon as a highly valuable function in an organization by as large as 70% of our respondents, but the teams appear to be struggling to competitively satisfy the requirements of the employees with only 14% indicating themselves as ‘very competent’. This could be a result of manual processes and overburdened staff responsible for managing thousands of contracts every year.
To get more in-depth insights into each of the observations, and interesting statistics around multiple contract management metrics and challenges, download our full survey report.