Recently I had the opportunity to sit down with Gartner Research Analyst Nigel Montgomery to discuss how Contract Lifecycle Management (CLM) has made a significant leap to Enterprise Contract Lifecycle Management (ECLM). Nigel is probably the industry’s most prolific author on topics pertaining to CLM or ECLM and has done a great deal of research over the years on the evolution of the technology. In fact, we had the opportunity to record the discussion, which can be viewed here.
What was interesting is that Gartner, from their client base, can see what is driving the marketplace, which informs their predictions for CLM in 2015. This is extremely exciting for us; their clients are saying what they need going forward is in total alignment with our strategy around ECLM and the technology we have developed over the past year.
Gartner describes what is happening in the market with point solutions as a major concern for the enterprise. It’s costing companies billions of dollars due to gaps around contracts and cross-departmental or cross-functional processes. Complex business problems and evolving customer needs continue to drive CLM to the next level. Leveraging an ECLM strategy can help by increasing revenue, decreasing costs and reducing risk, while sustaining compliance. Just like ERP and CRM in the 90s and 2000s, CLM is essentially growing up by offering benefits to the entire enterprise.
In this and other conversations I’ve had with Nigel over the years, it is clear that ECLM is evolving. ECLM, like ERP and CRM, is not a software application suite or a product, but a strategy which technology can fully support. Like the others, an ECLM initiative will significantly reduce the cost base and dramatically increase revenue opportunities at the core of the enterprise. It will uncover company-killing risk while driving company-saving compliance. ECLM can assist all organizations, not just those that operate in regulated environments. All businesses operating with stringent regulations and guidelines—with customers, suppliers, employees, and assets—can benefit from the enterprise strategy, building stronger relationships between contracting parties.
Throughout our discussion, Nigel reiterated that 80% of all inquiries currently coming into Gartner are with reference to ECLM, where just a year ago 75% of the conversations were about contract point solutions for sales or procurement. Organizations today are demanding cross-company interdependency around contracts, increased contract accuracy, speed and visibility into the contracts. With more types of contracts and, with a larger pool of stakeholders, greater scrutiny on spend, plus increased risk and regulatory requirements, contract management is now more complex and even more crucial.
Our discussion, and what you will hear in the video, covers how an ECLM initiative links your suppliers to your customers; how it creates transparency of obligations from your suppliers to your customers; how it uncovers forgotten rebates and discounts; and provides visibility into risk and manages compliance. It is clear from Nigel’s research and maturity model that an ECLM strategy opens up the world of information trapped inside paper documents, and unleashes the power of each and every enterprise relationship.
Contracts are no longer just documents to be signed and filed away—they are key instruments of opportunity. When you approach an ECLM initiative strategically, contracts move to the center of the processes, which surround and inform all your enterprise relationships and commitments. Having an ECLM strategy with technology systems and processes will support and help organizations succeed. Whether you have small or large numbers of contracts of both high value and high risk, Selectica helps you closely monitor their creation and manage them throughout the contract lifecycle. ECLM allows for better access to the information and analytics providing insight and control, ultimately benefitting the entire organization.