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article imageContract Lifecycle Management predictions for 2020 Special

By Tim Sandle     Dec 28, 2019 in Business
Looking into 2020, more and more organizations will start to see the necessary value of well integrated CCLM systems, according to an expert at Contract Lifecycle Management provider, Agiloft.
Agiloft's experts expect Contract Lifecycle Management to continue to gain momentum and an increasing number of organizations will move towards contract automation methods that will strengthen security and compliance while also enhancing enterprise-wide value creation.
Contract Lifecycle Management
With contract management in general, Colin Earl, CEO of Agiloft tells Digital Journal: "Gartner estimates that currently only 15% of organizations have an enterprise contract lifecycle management (CLM) system but by 2023, 90% of organizations will have implemented CLM, making contract management one of the fastest growing spaces in the software industry. Because contracts are the lifeblood of an organization, they present a tremendous opportunity for companies who don't have a CLM strategy in place. In 2020, we will see the trend of contracts extending to adjacent commercial activities continue, unlocking value by integrating disparate areas from supply chain to compliance."
He adds that: "In the coming year, as companies continue to work towards digital transformation, the ability to model contracts more deeply to get better value out of counterparties will be key. As the next evolution of contract lifecycle management, contract and commerce lifecycle management (CCLM) is an emerging contract-centric methodology that extends well beyond traditional contract lifecycle management. Using contracts as its core system of record, companies who adopt a CCLM strategy that integrates the full scope of internal and external commercial systems will reap the benefits of enhanced security and compliance while driving enterprise-wide value creation."
In terms of what is propelling this, Earl notes: "The number one driver for implementing a CCLM system will not be operational efficiency or maximizing profitability, it’ll be managing risks associated with compliance. Contracts contain all kinds of sensitive information. Whether it’s valuable IP, pricing information or confidential customer and employee data, not keeping contracts in a secure access-controlled system is a recipe for disaster. More companies will realize the real value of a well integrated CCLM system is in mitigating security and compliance risks."
AI and Smart Contracts
On the topic of 'smart contracts', Earl notes: “While the promise of smart contracts were thoroughly hyped in 2019, their potential still won't be fully realized in 2020. Eventually, smart contracts will become a core component of contract management solutions over time but that transition will not happen in the next year. Artificial intelligence (AI), however, will make a measurable impact on contract management in 2020 as a critical driver for autonomous contracting."
Illustrating this, he states: "For example, by analyzing the metadata in counterparty contracts received, AI can pull out the clauses and highlight new changes and how they relate back to the clauses that the organization likes to use. AI will empower companies to easily make comparisons and drive negotiations, expediting the process and removing a manual layer.”
Robotic process automation
With robotics and automation, Earl predicts: “Automation will continue to reduce human intervention in traditional contracting activities in 2020. In the age of automation, robotic process automation (RPA) will take center stage as a powerful tool to automate mundane tasks while enabling integration and digitization of contract. Just like there are hundreds of thousands of skills being built using the Alexa platform, in 2020, companies will start to build bots and deploy them through a digital interface to execute tasks that are repetitive such as reminders, escalations, and approval assignment."
He concludes: "This ensures approval task communication is always timely and staff members are freed from busy work to focus on productive activities.”
More about Contracts, contract management, business practices
 
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