Icertis, the contract intelligence company that pushes the boundaries of what’s possible with contract lifecycle management (CLM), and World Commerce & Contracting, the global provider of independent research in commercial and contract management (CCM), have published the 2023 Benchmark Report titled CCM: The Journey to Operational Excellence.
More than 750 organizations globally were surveyed to inform findings around top trends and challenges in contracting, including how volatile market conditions are catalyzing continued change in commercial policies and calling for a more integrated and adaptive approach to contract management.
Respondents included legal, finance, procurement, and sales decision-makers who play a pivotal role in contract management across businesses spanning manufacturing, retail, public sector, healthcare, and more.
“Regulatory pressures, geopolitical risks, the impact of AI, and supply chain disruptions are just some of the factors motivating today’s business leaders to reevaluate critical capabilities like their contracting processes,” said Tim Cummins, President of World Commerce & Contracting. “Those who have already pursued digitally enabled commercial management operations are not only more competitive in their markets, but also realize a substantial uplift in profitability according to our research.”
Key findings from the 2023 Benchmark Report include:
- More than 90 percent of executives understand the need for better contracts and more streamlined operations, leading 40 percent of organizations to consider implementing a new CLM in the next 12 months. However, lack of budget and the availability of resources remain barriers to strategic priorities like improving internal processes (71 percent), increasing strategic relevance (68 percent), and upskilling staff while attracting and retaining talent (58 percent).
- Average contract value erosion is now nearly 9 percent, creating a significant bottom-line impact for businesses that manage thousands of commercial agreements. Value erosion reached an all-time high in 2020 at nearly 11 percent as a result of COVID-19 and has steadily decreased over the past three years.
- The role of contract management resources in Environmental, Social, and Governance (ESG) adoption has increased more than 5 percent over the last two years, but only 14 percent of survey respondents have made the connection between ESG and contracts in strategic planning. This gap pinpoints a significant area of opportunity to better prepare for shifting ESG regulations.
- Nearly 30 percent of the workforce is involved in the contract management process for their organization. However, in medium to large businesses, contract data is housed in an average of 24 different systems, leading to challenges in transparency and collaboration.
“Grasping the innate complexity of contract-driven processes across the enterprise and investing in the right technology is critical for businesses to stay ahead in their industries amidst shifting market conditions,” said Bernadette Bulacan, Chief Evangelist, Icertis. “Icertis is committed to partnering with organizations like World Commerce & Contracting to address unique contracting challenges and equip our customers with the insights, automation, and AI necessary to drive their enterprise forward by tapping into contracts as one of their most valuable assets.”
The 2023 Benchmark Report is based on research undertaken by World Commerce & Contracting from June to September 2023.