I went through the Aberdeen research library last week and found an older study on Contract Management in the Mid-Market which had some interesting findings. At the high level, Aberdeen states:
Mid-sized companies tend to lag in terms of technology adoption; with regards to contract management this is certainly the case. Aberdeen research found that over 80% of mid-market companies on both the buy and sell-side are still using manual or only partially-automated and/or disjointed systems. Although approximately half the companies currently have formal contract management programs in place, they have found it difficult to achieve the following:
• Encourage usage of standard contract language (terms and clauses) across the enterprise
• Ensure sufficient levels of visibility into contractual commitments to both buyers and suppliers
• Actively monitor and track compliance to contract terms and conditions
Aberdeen was able to determine that on the buy-side, mid-market companies find the hosted model for contract management more appealing than their larger counterparts.
There was also an interesting breakdown of what functionality was deemed most critical from a contract management perspective:
|Must Have Capabilities||Buy-Side||Sell-Side|
|Contract repository with search functionality||84%||76%|
|Clause and template library||74%||68%|
|Integration with MS Office||60%||79%|
|Integration to ERP/Finance solution||64%||59%|
|Analysis and reporting capabilities||88%||74%|
I found this analysis very interesting, as it clearly shows that integration is not highly regarded and the most important functionality needed from a CM perspective is just having visibility and reporting. When it comes down to it, most companies (especially procurement departments) really need a way to find contracts and take action on their contents. With those basic abilities, you are accomplishing much of what you need to obtain value from contract management, especially if your organization currently has nothing in place.