Kingsley Martin wrote a thought provoking piece on the future of contracting platforms. While it is hard to predict when the dawn of self-organizing, self-reporting contracts will be the norm under Kingsley’s optimized contracts maturity model, the reality is that everything that a company needs to transform its current contracting process and significantly move up the maturity chain is available today.
However, many companies are still stuck in the early stages of the maturity model (ad hoc, basic). Leaders of a company’s contracting function should be driving towards the front end of the maturity model and with a platform that will take advantage of future innovation. A more innovative approach leads to significant savings on current contracting support costs and can drive significant business value – whether accelerating revenue cycles, capturing procurement savings or significantly reducing the costs of compliance.
Given that it makes financial and business sense to innovate a company’s contracting process, why are so few companies truly doing so? The reality is that truly transforming enterprise contracting is HARD. Contracting is typically fragmented in an enterprise and has multiple stakeholders, not all who agree on the need to transform existing processes and/or harmonize existing content (templates, playbooks). Next, a company or function needs funding to afford an innovative technology solution. Finally, never underestimate to enormity of the change management challenge.
It is hard for existing stakeholders to change entrenched ways of doing things even if they all agree current ways are broken. Because of these challenges, few initiatives are likely to fully succeed or do more than incrementally improve the current environment (i.e. contracts now can be found).
So how do we overcome these challenges? First, identify champions that see the tremendous value in transforming enterprise contracting and who are willing to overcome the entrenched obstacles. Ideally, this leader is in the C-Suite and can be anyone from the COO, GC, CFO, CPO or CIO. Their sponsorship and organizational standing can overcome current obstacles to change.
Next, your transformative contracting solution needs to fit within a short innovation window to significantly increase its chances of succeeding. Companies are never static and there are always competing and changing priorities so the windows to innovate are often time bound. It just takes that next M&A deal or divestiture or a new business model to shift priorities to the next project.
With the support of a willing champion, the second part of the problem can be resolved with the right partner. Ideally you want to work with a service provider that can help deliver an end-to-end solution that meets aggressive implementation timelines and integrates process, content, technology and people.
By following these steps, you can bypass failure and enjoy the glory from driving significant business outcomes.Gabriel Buigas is Senior Vice President of Global Strategy & Client Solutions for UnitedLex. UnitedLex partners with ContractRoom on end-to-end contract lifecycle deployments with the Fortune 500 - with a combination of advanced technology and services that simplify the contracting process, enhance decision making and improve business outcomes. You can learn more about each at the following: unitedlex.com and contractroom.com.