When your contracts number in the thousands or more, it’s clear that you need a system to effectively manage and extract valuable information from them when you need it. Many organizations turn to Contract Lifecycle Management (CLM) for this purpose, which seems like an obvious choice from its name.
However, CLM implementations have absurdly high failure rates. Gartner predicts that by 2024, 50% of first-time CLM implementations will fail to deliver the expected benefits. What’s the reason behind these dismal numbers?
While CLM can effectively oversee the process of creating contracts and legal documents, it does not necessarily provide value for procurement operations that require more than just basic contract oversight. CLM systems require significant time and resources for implementation and maintenance, which can distract from other core business activities. Procurement teams usually find that they never actually get around to administering these valuable contracts or making the data available for research, analysis, and preparing for future projects. Extra time and effort is needed to reach a stage where CLM tools can be relatively effective, creating unnecessary challenges for procurement teams.
Instead, Contract Management Solutions have emerged as a strong alternative, promising a more holistic and integrated approach to contract management for procurement needs.
As a summary, CLM manages the entire lifecycle of contracts from initiation to renewal. Contract Management Solutions not only manages contracts but also leverages them to drive business value, converting the contracts into rich and actionable data. You can see an illustration of this in the graphic below.
A common misconception that must be addressed is that Contract Management Solutions are seen as glorified filing cabinets. This is patently untrue; they go beyond storing and retrieving documents to include features like automated reminders, secure access controls, and advanced search capabilities.
Critically, Contract Management Solutions allow for easy integration with other business systems, providing a seamless flow of data across the organization. This integration capability is something many CLM systems lack, leading to data silos and inefficiencies.
To get the full value out of Contract Management Solutions, some of the features procurement organizations must look out for include:
OneMarket Contracts was built to tackle procurement’s key contract management challenges, offering a market-leading portfolio of contract data fields and shared services experts to facilitate the uploading of contracts onto the platform, both during the implementation phase and throughout the duration of the agreement. This ensures continuous, efficient contract management over time.
Our ongoing support services manage the monthly ingestion of newly signed contracts for organizations, reducing administrative burden and allowing teams to focus on high-value strategic work. Procurement teams are empowered to proactively plan instead of reactively manage and stay one step ahead of the needs of their business.
Learn more about OneMarket Contracts here and our other modules that support the full Source-to-Pay lifecycle here.
About the Author
Mark Flowers
Managing Director, Product Management & Operations, OneMarket
Mark is a software veteran, self-confessed data nerd, and an experienced procurement practitioner. He has 30+ years of experience spanning both Sell-side and Buy-side of Global Business, operating from 5 countries across Asia and North America, with Senior Leadership roles across Procurement, Product, Sales, Finance, Marketing & Customer Service.
