It is ironic that, considering that contractual agreements are the lifeblood of business, many organisations have yet to adopt a software platform which handles their documents digitally. As business relationships and supply chains become increasingly complex, not to mention time critical, the need for something more capable than a jumble of emails with Word attachments has become ever more pressing.
A recent report from market research company Forrester entitled “Contract LifeCycle Management (CLM): From Nice-To-Have to Mission-Critical”* tells the story. The global study found that “CLM is critical in a fast-changing world” and that “firms that are mature in in their contracting processes leverage CLM to turn static documents into strategic advantage, but the journey to maximise value is complex.”
Whilst larger organisations tussle with the challenges of complexity and integration with their corporate systems, the needs of small to medium size enterprises (SMEs) are more straight forward – they are unlikely to have dedicated in-house expertise but they still need to base their business interactions on agreements that they can trust.
A further conundrum for businesses looking to move to a digital platform is how to select the right solution for their organisation. Solutions are increasingly cloud based, making for easy and quick adoption along with ‘pay as you go’ pricing. However, many of the available solutions are inherently complex which is a challenge for smaller businesses – detailed selection processes following by long learning curves and implementation timescales do not sit well with entrepreneurs, start-ups and growing SMEs who just need to get the job done.
As a new entrant to this crowded field, Simplifire started with a clean sheet and a focus upon the needs of smaller organisations. A key feature is the integration with libraries of standard contracts from industry bodies such World Commerce and Contracting which provides a kick start for small businesses to build their own agreement templates.￼￼
Access to a repository of contract standards and design patterns.
The small business owner or entrepreneur needs a platform that can be adopted quickly, at low-cost (or no-cost) to meet their immediate needs, whether this be for buy-side, sell-side, Non-Disclosure or any o￼ther type of legal binding agreement. As the SME grows, however, so will the number of agreements and contractual relationships to be managed. Amongst Forrester’s key findings was the recognition that senior management rely on contract insights to make critical business decisions. The CLM adopted by the SME must provide support as they progress through the 6 stage maturity model identified by Forrester:
- 1. All contracts in an electronic repository
- 2. Analysis and reports of contracts
- 3. Automated contract creation
- 4. Connecting with upstream apps
- 5. Integrating transaction systems to contractual term and conditions
- 6. Improved contract optimisation
Increasingly, the CLM is being seen as a collaboration platform supporting remote teams and enabling self-service capabilities for employees. And the coming years will see an increased use of “AI-powered tools [that] can understand what different clauses mean and reveal contract language that may expose a business to risk”. These will increasingly become available to not only the large corporates but also the vast community of smaller businesses.
All this said, the contracting process is ultimately about reaching agreement and a shared understanding between the human beings who are the contracting parties. The negotiating process, with all of its human dimensions, will always be the basis for successful business transactions.
Simplifire is a platform for digital negotiations supporting collaboration.
* A commissioned study conducted by Forrester Consulting on behalf of Icertis.