Making Your Business Case for Contract Management Software

Are you trying to understand the business case for contract management software?

Do you need some help selling the concept to your colleagues or senior management?

Here are some questions to ask yourself and your team to help put an investment in contract management software into context.

How many contracts or agreements exist between your company and another corporate or individual entity?

What’s the average value of one of those contracts?

What would it cost, win or lose, to fight a lawsuit brought by a customer who claimed you breached a contract? By a vendor or supplier? By an employee or a contractor?

What would the legal, financial, or industry penalty be to be contractually out of compliance with an industry or government regulation? The impact on your reputation?

What would the cost be if an average vendor contract you intended to cancel auto-renewed for another year?

What would the cost be if you overlooked the expiration date – or required notification date – of customer contract and that customer failed to renew due to your neglect?

What would the cost be to go to battle with the IRS? The Department of Commerce? The FDA? OSHA? Your own industry’s regulating body?

I think you get the picture – and it isn’t pretty. The good news is that our intelligent contract management platform has been helping companies avoid these legal, financial, regulatory, and public relations challenges for over a decade.

Need more ammunition? Check out the numbers below.

Supporting Data, By the Numbers

The IACCM estimates the cost of inefficient contract management to be more than 9% of total annual revenue.

Source: The International Association for Contract & Commercial Management

Goldman Sachs estimated that companies spend almost 5% of their revenue to track agreements after signing a contract.

Source: Goldman Sachs

Pricewaterhouse Coopers has found that 12% of a company’s total annual costs may be devoted to contract management and administrative tasks.

Source: Pricewaterhouse Cooper

Goldman Sachs reports that companies using contract management software can reduce annual contract management expenses by 20 to 50 percent.

Source: Goldman Sachs

Best-in-Class companies have more than 75% of their contracts in a searchable repository, compared to All Others who have about one third.

Source: Aberdeen Group, “Best-in-Class Performance in Contract Management”

Best-in-Class companies average 85% of purchasing transactions compliant with contracts vs. 30% for all others.

Source: Aberdeen Group: “Contract Management: Key Attributes and Best-in Class Results”

Best-in-Class companies have 19% fewer days in their average cycle time to create, negotiate, and approve contracts compared to All Others.

Source: Aberdeen Group, “Leveraging E-Signature in Your Contracts: Best-in-Class Advantage”

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Making Your Business Case for Contract Management Software

Supporting Data, By the Numbers

The IACCM estimates the cost of inefficient contract management to be more than 9% of total annual revenue.

Goldman Sachs estimated that companies spend almost 5% of their revenue to track agreements after signing a contract.

Pricewaterhouse Coopers has found that 12% of a company’s total annual costs may be devoted to contract management and administrative tasks.

Goldman Sachs reports that companies using contract management software can reduce annual contract management expenses by 20 to 50 percent.

Best-in-Class companies have more than 75% of their contracts in a searchable repository, compared to All Others who have about one third.

Best-in-Class companies average 85% of purchasing transactions compliant with contracts vs. 30% for all others.

Best-in-Class companies have 19% fewer days in their average cycle time to create, negotiate, and approve contracts compared to All Others.

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