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.

There is extensive discussion about emerging technologies such as artificial intelligence, natural language processing and blockchain, with wide acceptance that they will have significant impact on contracts and contract management.

As we enter 2018, the divide between today’s outdated contract management practices and tomorrow’s technology-enabled reality is becoming starkly obvious. It was Warren Buffett who segmented the business world into innovators, imitators and … the rest.

IACCM’s recent study of the state of contract management automation revealed low satisfaction ratings and poor levels of adoption. While there are some very successful instances of implementations led by the Legal function, in general systems selected by Law Departments were especially prone to failure – in fact more than 40% more likely to be underperforming.

We have all heard the demands for simpler, shorter contracts. Most of us sympathize with the view that plain language and thoughtful structure assist with interpretation and understanding.

Contract management technology has been around for almost 20 years – and has had remarkably limited impact. While some administrative tasks are now widely automated, the bulk of contract management still depends on human intervention and knowledge.

When it comes to complex contracts and negotiations, scrap metal may not be the first thing you think of. But a recent edition of the Canadian ‘Globe & Mail’ tells us otherwise: “Despite the technological developments in the industry, the trust needed to do business effectively requires a face-to-face approach”.

Enterprise Resource Planning – or ERP – was designed during the era of the big, integrated enterprise. It streamlined internal business operations and drove efficiency through high levels of standardization. To a large extent, against that specific objective, it was successful. Now, it has become a constraint.

Making sense of digital requires first an appreciation of its different forms – digitization, digitalization and digital transformation. Bertrand Maltaverne[1] recently wrote an excellent article on this topic and made the following definitions:

Technology lies at the heart of every modern business. Yet increasingly organisations don’t own their technology – they buy in services from a range of providers. The job of the CIO has shifted to that of a business enabler and innovator, knowing less about the technology, but much more about its business impact and needing to understand the requirements of the market.