To get some clarity and cross the contract AI chasm, we have partnered with World Commerce & Contracting to conduct the first-ever, comprehensive benchmark study on the benefits, barriers, and usage of AI within contract management. In this part of our series "Crossing the Contract AI Chasm", we dive deep into our first trend: there are still obstacles to implementing CLM solutions, which limits the application of AI tools.
While some organizations have already turned to digital contract management, many have not. Over 50% of respondents said no when they were asked if they have implemented a CLM solution. This is more than those who said they had implemented a solution already! However, there is hope. More than half of the respondents who haven't implemented a CLM solution yet said selecting a solution is a top priority in the next 12 months with many stating that planning is already underway.
The results were even more pronounced when it comes to AI. Only 38% of respondents said they have implemented a solution. Many seemed to favor the idea of partnering with a third-party provider rather than relying on their current CLM vendor for the use and adoption of AI functionality throughout the contract lifecycle.
The top 3 business drivers respondents identified for CLM implementation are:
- Improving internal processes
- Increasing team skills
- Demonstrating value
These drivers highlight the fact that contract management is shared by stakeholders across many internal teams, such as Procurement, Finance, and Sales. Even though many teams are involved in contract management, Legal is still recognized as the primary executive sponsor for CLM deployment.
Although most respondents indicated that they feel their organization has the skills needed to deploy and train CLM and AI tools, many still selected “increasing team skills” as a top priority and plan to resource this gap by partnering with third-party providers. This makes us think that even though many organizations may possess the skills needed to train these tools, they lack the time to manage them effectively without external resources.
Finally, despite budget being a prime barrier for implementing AI solutions, most organizations responded that they do have budget for CLM tools. This begs the question, “Why do organizations feel that these two tools must be purchased and budgeted separately?”
Build a comprehensive business case
Many CLM and AI business cases come down to cost and indecision around who is funding technology improvements internally. Start by identifying the people, processes, and technology that are essential to managing contracts more seamlessly and ensure stakeholder engagement throughout the process.
Look for a partner, not just a platform
It’s perfectly normal to look at the volume of templates, number of stakeholders, manual processes, or data integration and migration needs and feel overwhelmed. But the good news is you don’t have to face this alone. When you find the right vendor and implementation partners, you will be in excellent hands.
Quantify total costs
When identifying your total investment in contract management, be sure to include direct costs (the software itself), indirect costs (inefficiencies are hard to quantify), and internal costs (IT support).
To read the full benchmark report, click here.
To see what an AI-charged solution can do for you, check out our Lifecycle AI page! If one of your top priorities for the next few months is to implement a CLM solution, request a demo!