The field of contract lifecycle management has changed tremendously in recent years, and all eyes are on its growing popularity. Organizations of all sizes face the challenge of juggling many contracts simultaneously, each at different points in the contract lifecycle. They must constantly analyze and improve their contract-related operations to keep up with the changing business needs and digital landscape.
To overcome these challenges, organizations are implementing automated contract workflows that facilitate virtual contract collaboration and intelligent workflow. Contract Management Software Gartner reports state that AI-powered contract analytics will reduce manual contract review processes by 50% by 2024. By 2023, contract lifecycle management solutions will be used by 90% of multinational global firms. Contract lifecycle management best practices are constantly evolving, with innovation at the center. Naturally, everyone is interested in where CLM software is going at this point. What CLM trends should your business be aware of as well in order to lead the way in innovation rather than lagging behind?
1. Digital transformation at a faster pace
Many organizations have implemented a CLM (Contract Lifecycle Management) solution to automate their current contracting processes. However, this CLM solution was specific to their respective departments – procurement, legal, finance, etc. The fragmented approach often leads to inefficient workflows and the deployment of multiple contract lifecycle management tools, leading to user frustration.
This problem has been overcome with the help of ECM (enterprise contract management) software technology that helps manage all contracts under one technology.
According to Gartner research, "once a business process is transformed from paper-based to digital workflows, it will become the 'new normal'—representing the next phase of digital transformation." For example, almost 68% of legal departments, now say that "digitizing manual processes" is a top priority.
2. The increasing role of AI and machine learning in contract analytics
Artificial intelligence is expected to dominate the future of contract lifecycle management technology, where automation can significantly improve security, reduce risk, and streamline workflows. ECM software enabled by AI and machine learning will transform from a simple repository to a system that works and ensures the right creation of contracts, the right execution, and the right management.
According to the report "Global Enterprise Contract Management Market - Trend Analysis, Product Usability Profiles, and Forecast to 2023", the value of CLM will triple over the next six years, and artificial intelligence will be a key driver of this development. AI-powered CLM systems powered by machine learning can enable organizations to "drag-and-drop" contract documents into their CLM system, automating and streamlining contract data extraction and contract data classification processes. It is changing the way businesses function.
3. Digital identification tactics promote fast, secure information sharing
We've all grown accustomed to verifying our identity on a daily basis, whether it's to unlock our smartphone or use a PIN to authenticate a debit card purchase. The business world is no different, but the stakes are higher. At every stage of the contract management process, productivity is increased, and security is improved by swapping out outdated analog identifying techniques with cutting-edge digital ones.
As socially remote office environments become an accepted part of business and regulations evolve, secure digital identity will play a central role in the remote transfer of sensitive information between parties. Fortunately, new technology makes it easy to securely authenticate all users.
In addition to enhancing data privacy, digital identity also makes it easier for end users to access and manage information, balancing customer engagement with greater enterprise security. 56% of HR professionals said identity management will be critical to their success over the next five years.
Although the field is still relatively new, soon mass adoption of biometric identification and facial recognition software will continue to simplify and secure the identification process by eliminating the need for username and password logins or third-party verification programs or apps.
4. Deeper Adoption of CLM Beyond Legal Teams with Self-Service, BU Portals & Departmental Contract Management
Gone are the days when contract management was largely a legal task, with only the legal ones doing what was necessary. Advances in contract management, such as Self-Service CLM, business user portals, and departmental contract management, have democratized contracts by giving executive authority to other non-legal teams.
They enable the use of pre-approved contract templates, electronic signatures, automated workflows, etc., allowing sales, procurement, and HR professionals to manage contracts without consulting legal teams.
- You can develop and approve standard language for a range of contract templates and create important questions to help you choose the right contract and language
- Users can get pre-approved wording tailored to their specific business needs
5. Easy integrations and customizations
Companies often face the challenges of integrating different technologies that help optimize the workflow of their business. Companies will benefit by installing a user-friendly and well-integrated CLM solution that is compatible with the company's other proprietary programs and software solutions.
The need for automated contract workflows is fueled by growing demand for flexible solutions that are easy to integrate and equipped with AI-enabled tools such as electronic signatures, smart contract analytics, and clauses. The use of automated contracts can lead to improved compliance controls, greater transparency, and reduced time and resources. Investing in automated contract workflows to accelerate digitization and contract execution should be at the top of every business's priority list for 2023.
In conclusion, the future of contract management looks productive, where the help of technology and expertise is expected to transform processes. Cloud-based contract management software is slowly but steadily taking center stage. This advancement in contract management adds value and importance to a process that was previously considered time-consuming and expensive. We can soon expect a world where technology-enabled contract management processes are commonplace, cost-effective, and beneficial to the company.
The future of AI and machine automation in CLM is bright, and businesses must clearly understand the value of streamlined processes throughout the contract lifecycle and must be better equipped to fully utilize new AI capabilities.
At SpeedLegal, we are focused on developing software that helps companies transform their contract management processes. Many enterprises have used SpeedLegal's contract management platform to gain a better understanding and control over their contracts. Now, with the help of AI, these contracting capabilities will rise to a new level of efficiency, understanding, and productivity.
By taking advantage of SpeedLegal's AI-powered CLM Solution, clients can start optimizing, organizing, and configuring their CLM today to be ready for the AI technology of tomorrow.