AMRI Pharmaceuticals. Hearsay Systems. The Baltimore Ravens. Uber. And many others. What do they all have in common? Struggling with customer lifecycle management—that is, until they began working with Simplus to implement powerful contract lifecycle management (CLM) solutions. Having a modernized CLM tool is key for all corporations, big and small, and in every industry.
If you’re in high tech, you may be facing challenges similar to these companies with your contract lifecycle. Most organizations have an average volume of 20,000–40,000 contracts under management, yet in most cases, these organizations are not leveraging a modern CLM tool. Instead, manual, labor-intensive processes are used, resulting in an increased time-to-value.
Here, we’ll go over some of the biggest pain points the high tech industry faces with contract management—including slow cycles and high costs—and how a superior CLM implementation can alleviate those issues.
The slow cycle of contracts
The average contract takes 3.4 weeks to go through its lifecycle—from creation to negotiation to signing. That’s nearly a month of your client’s time, and the more of their time you take, the more likely they are to take their business elsewhere.
When Hearsay Systems, a high tech computer software provider, came to Simplus for a custom CLM solution, we knew just how to speed up the contract cycle for them. Their new system utilizes SpringCM, a DocuSign company, with Salesforce, which greatly accelerates the process of generating contracts and other documents. Due to this advanced workflow, everything from vendor contracts to order forms is handled swiftly and with little hassle.
The high cost of contracts
Time, of course, is money—with the average lifecycle being as long as it is, you can imagine that the expense is substantial. And that cost is rising. According to research by IACCM, business spending on low-risk contracts increased 38 percent over six years to an average of $6,9000 in 2017. The report likewise found that “costs for a mid-complexity contract stands at $21,300 and high complexity contracts run into hundreds of thousands of dollars.”
Hearsay Systems wanted more out of its contract management without breaking the bank. They wanted a centralized, cloud-based solution that would shorten the time between drafting and executing contracts. Through the implementation of standardized contract templates, an improved workflow, and the SpringCM platform, their process is more efficient and cost-effective than ever.
How CLM can help
Contract lifecycle management is more than finding a program that simply generates documents. A good CLM solution’s purpose is to automate and streamline each and every step of a contract’s lifecycle. That means everything from generating the contract to negotiating the terms, enabling approvals and renewals, and keeping track of deadlines and compliance milestones. According to Conga, organizations that adopt a CLM experience
– 60 percent faster contract cycles,
– 50 percent improvement in negotiation speed,
– 40 percent lower contract administration costs,
– 11 percent improvement in delivery time, and
– 10–30 percent savings in operating costs.
Not only does a CLM make the process easier to manage, but it also minimizes the risk involved. For example, 12–15 percent of all contracts are lost through leveraging manual processes—such as email and paper files—and from a lack of a single, central location where contracts can be easily stored, accessed, and searched for. Automating the process removes the possibility of human error, ensuring all documents are safeguarded and can be found when needed.
Take the case of Uber, for example. As the company began and grew, Uber managed its contracts manually through Google Docs and emails, which placed a huge limit on its progress. Since partnering with SpringCM, though, productivity has increased. “There are no longer contracts ending up in the wrong hands or being lost between sales or legal. Contracts are generated and made available at a faster rate, and sales and legal are no longer wasting time chasing down contracts, allowing employees to spend their time more productively and profitably.”
Hearsay Systems was looking to implement a CLM product. Their goal was to have a centralized searchable contract database. After working with Simplus, they achieved their goal and much more. They now enjoy shortened document generation time, advanced workflow for approvals, templates with pre-approved language, a clause library, and more accurate forms.
Like any business, high tech companies need contracts to run smoothly, delivering excellent service to customers and profit for employees and managers. With the unaided lifecycle lasting as long as it does and costs rising, CLM tools are the best way to ensure success.