Contract Automation as an Asset:Although 1 in 3 legal departments see contract automation as the fastest growing technology trend, less than half have invested in an contract management tool. So what are they waiting for? 29% are interested but not sure where to begin, while 46% are interested, but lack sufficient budget and resources, which supports the conclusion that legal departments are still suffering from the “more-with-less” syndrome.
Contract Analytics:In terms of personnel, 61% of the companies surveyed employ 10 or less people to manage their contracts, despite 75% of the responding companies having 100 or more employees. Resources become even more limited when budget constraints are combined with external pressures for speed, the high volume of contracts and manual processes, turning contract management into an arduous task. Without a unified platform, all the contracts and related tasks are stored, managed, and approved in various platforms, each with their own set of steps. Consider the following familiar situation: pricing and basic reporting are conducted in Excel spreadsheets, contracts are generated in Word, approvals are done over the phone, on paper and by e-mails. As work moves across platforms and passes through the hands of various people, the chance of error increases when members of the legal department manually input data, not to mention the time that is lost.
Blind Spots in Contract Reporting:Despite the high volume of contracts legal departments have to manage, there are several blind spots. Only 16% have visibility into a majority of their contracts. Visibility doesn’t just mean the ability to find a contact, but also the ability to track changes made to each contract and create reports based on information in those contracts. 60% of respondents don’t report on contract cycle times at all, while 31% are still stuck using Excel spreadsheets. 73% of the respondents said it would be difficult to run a report on their contract terms. It’s very tough, if not impossible, to control what you can’t see.
Forecast for 2016: Cloudy:On thee bright side, legal departments do recognise that web-based storage is becoming less of a trend and more of a reality. While the development of cloud-based solutions is exciting for other business units, the legal department is considerably more guarded because web-based software has increased the potential for data breaches. In the survey, 41% of legal departments see web-based solutions as the fastest growing technology trend. Web-based providers have incentives to maintain high levels of security, so as the cloud continues to grow, so do the cyber security measures that keep data safe.
Takeaway:Legal departments are becoming more dependent on technology to help them make data-driven decisions, as they are discovering manual processes simply lack the insights. The interest level is high for contract management software solutions, but legal departments have to play catch up when it comes to adopting the technology. Nevertheless, 2016 is expected to bring an increase in reporting, web-based software solutions, and automation to contracts.
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