For many companies that implement a contract management solution, having a central, cloud-based place online to store contracts is a huge leap forward.
But many companies stop there. That’s to say, they use their cloud-based contract repository like a bigger shared drive, and fail to implement or take advantage of the automated features that the best contract management solutions offer.
This was one of the major findings of a recent Forrester study, commissioned by SpringCM , which determined that of companies that implement contract management solutions, half are using them merely as passive repositories for their documents.
And this is a problem.
Because while these businesses are benefiting in one significant way, they're missing out on a ton of value.
You might be one of those businesses that has a contract management solution in place but hasn’t yet had the time or money to delve into the available tools. Or you might be considering a cloud-based contract repository but aren't quite sure what else it could do for you besides act as storage space. Wherever you are in the process, these study insights will show you why it's crucial to go beyond the contract management basics and use a solution's contracting tools actively, taking the next step to contract lifecycle management (CLM).
To see how critical it is that businesses evolve past the contract management basics, one need look no further than Forrester's discovery that the repository element of a contract management solution represents approximately one-tenth of the value such a solution offers. That means that companies that implement one and use it as a passive place to leave and find files are squandering as much as 90 percent of their investment.
Likewise, those businesses that implement only a contract repository and do not upgrade any of the tools to make full use of it, or have an old solution in place that does not offer next-gen contract lifecycle management options, are sacrificing a huge amount of potential value.
One of the major reasons for this failure to adopt a more sophisticated contract management system is, perhaps ironically, that companies fail to implement the one they have correctly, limiting it to only one or a few departments. A big part of the value of a contract management system is that it's comprehensive across an enterprise, and only one in five companies polled reported having things set up this way.
Starting from that perspective, it's not wholly surprising that the biggest hurdles to enhanced contract management adoption or upgrading are cost (38 percent) and lack of company urgency (34 percent). If a company doesn't recognize its value to begin with, it won't recognize the potential value of an enhanced version.
But there's good news. There's a growing understanding throughout the business world that a comprehensive contract management system, and next-gen contract management tools along with it, can allow people to spend their time more productively. Companies are beginning to want to take advantage of everything that a good content management solution affords them.
More than 60 percent of the firms that Forrester polled said they intended to move forward with improving their contract management capabilities within the next year. Workflow automation and contract creation and finalization tools to reduce the length of the contracting cycle were the most popular choices companies had slated to implement.
So plenty of businesses have started to understand what CLM can do for them – that the active elements of a contract management solution are even more powerful than the passive, foundational repository.
But of course not every contract management solution is as effective as every other one. Customers looking to upgrade their systems or roll out entirely new ones are looking for systems that are easy to use and implement. They're seeking file systems that allow for appending and attaching information to germane documents. They're looking for solutions that generate robust analytics as people use them, to determine conclusively how well they are working and inform steps to get even more value out of them.
And they also want to be able to design their workflows right. They're looking for easy and intuitive interfaces; ones that make it easy to draw the connection between the on-screen flowchart they create and the way the contracts move from person to person when the workflow is put into action.
So yes, CLM-use is evolving – but companies aren't just looking for any solution. They know the type of tools they need, and the level of usability they require.
The more companies recognize how much they can streamline and save on their contract processes with the right tools, the more they're realizing that it's well worth their while to invest not just in a contract repository, but in a contract management solution that facilitates automation, analysis and optimization.
And as businesses continue to evolve beyond the basics, toward getting the full value out of their advanced contract management tools, they’ll drive both process benefits, as well as bottom-line financial and adherence benefits for their companies.
 It’s Time To Evolve Past Basic Contract Management, a March 2018 commissioned study conducted by Forrester Consulting on behalf of SpringCM.