There is a lot of buzz about digital reinvention (a term popularized by McKinsey consultants), digital transformation and digital disruption. By whichever name you call it, it’s importance cannot be understated.
According to Mckinsey, only 8% of companies that they surveyed believe their current business models will remain viable through digitization. That’s significant because digitization no longer means simply revamping your e-commerce site or improving the digital customer service experience and calling it a day. Digital reinvention must run deeper. The companies that win will be those that digitally reinvent processes end-to-end.
Digital reinvention should be every bit as important to your contract management process as it is to the rest of your sales or acquisition process. It is, after all, a critical business activity and the quality of the process remains just as important in a digital world as it is today, perhaps more so.
We live in a time when customers’ expectations have never been higher. Research suggests that 58% of a customer’s loyalty is based on their buying experience—not on your product or service. The customer experience starts at discovery and runs all the way through contracting and beyond. A great deal of the customer experience has been digitized, so much so that customers can in many cases complete over half of their buying journey without even talking to a sales person.
The contract process, on the other hand, is behind. The overwhelming majority of companies — 85% in fact– are using manual processes to manage sell-side contracts. Contracting remains analog. It’s yet to be digitized. Not only is this slower, it also translates to lost revenue. It is estimated that a typical business with 1,000 employees wastes $2.5-$3.5 million each year searching for and re-creating lost documents. Recent IACCM research highlighted the average cost associated with creating and agreeing a contract – and even for relatively low risk agreements, that came to $6,900.
Does digitization of contract processes really matter? The short answer is, yes. As other pieces of the business digitize, the lack of digitization in contracting becomes that much more evident. Already we know of CEOs demanding ‘no-touch’ contracting – a fully automated, end-to-end process. While the rest of the journey speeds up, contracting will be the bottleneck unless we make some pointed changes. That means all eyes will be on you when a seemingly fast sales deal stalls at contracting.
We need to evolve beyond basic contract management and legacy systems. By digitally transforming the sales experience and refocusing our resources to deliver high value contract management, businesses can improve profitability by up to 9%.
It’s time to act. That’s why IACCM is so focused on helping the contracts and commercial community to understand the exciting technologies that are fast becoming available. Join us this Thursday for one of those sessions and see how contract lifecycle management technology can streamline your contract process in the webinar: Digitally Reinvent Quote to Contract to Maximize Revenue.