The pressures on global businesses to “do more with less” do not appear to be abating. With recession on the horizon for many major economies, cutting operating costs and refocusing resources to add strategic value is a priority for most CEOs. And contract lifecycle management (CLM) is a great place to look for cost savings.
Contracting is a huge part of any business. It’s central to almost every transaction and revenue can be won and lost on the quality, speed and simplicity of its contracting. But, in most cases, it is resource-intensive, time-consuming and seen as a diversion from strategic challenge. For instance, an oil and gas company should be primarily focused on issues such as extraction, transforming to new energy, or geo-political movements affecting supply chain. It should not be weighed down with processing non-disclosure agreements.
Outsource your contracting
A common response for many legal department leaders and CEOs is to automate contracting by implementing software to allow for self-service or other use cases. By entrusting your CLM activities to a software solution, you can certainly save time and money in the long run but, with so many solutions on the market, finding the right one for your business can be a tricky process. However, alongside the price tag for the software, negotiating the licensing agreements, implementing the software, and training staff, you may not see real cost-savings for at least 18 to 24 months. That’s a long time in this economic climate.
According to a recent World Commerce & Contracting survey, 81% of its members have plans to implement contract automation. But it may be worth taking a step back and considering: “Is this all I should be doing or is there something else to look at that can get faster savings now, and prepare for the future (with tech)?”
Upgrade your outsourcing
Beyond a technology upgrade, it may be more effective to review the entire contracting machine, alongside the legal input that is sometimes required. Contracts are touched by everyone and owned by no one, which in turn makes for lots of opportunities for value leakage or – more optimistically – savings and value creation, if you get it right.
A professional service firm that can not only help automate the contracting arm of the company but, at the same time, improve the contracting processes, may be the solution that pays dividends in time and resources from the outset, without waiting for that ROI. This is about upgrading your outsourcing solution and finding a service you can delegate the end-to-end operation to.
Transformation is likely taking place in many other departments within your company and the legal department needn’t be exempt. It just comes down to the realization that a legal department and its contracting processes can be transformed. Speaking to colleagues in other parts of the business that are undergoing (or have undergone) transformation can set you up for conversations with trusted service providers that, instead of giving you just one piece of the pie (CLM software), can offer you the whole pie, by improving and then operating your CLM processes for you.
Delegate is the new automate
This is a new perspective on outsourcing: Where old outsourcing was, seemingly, a lift-and-shift – perhaps taking certain processes out of a high-cost location such as London and relocating them to a new, less-expensive location, the new perspective is to improve the processes first, then take over the operation.
In this evolving climate of legal service provision, there are organizations that can offer legal expertise, technology, a variety of centers, and diverse language skills, among countless other benefits. Why not find the one provider that can match the footprint of your company better than any other outsourcer?