Contract Management Trends 2022 – Contracts In The Age of Virtual Economies!
Contracts are essential to the operation of any business as they are the foundation of every relationship it has with its stakeholders, such as suppliers, partners, and customers. Contract Management Trends 2022 will be about rapidly evolving CLM processes to meet growing consumer demands such as automated CLM processes, compliance and risk management, smarter data management, etc.
The global legal tech software (mostly focused on AI & Machine Learning) market is estimated to reach $0.95 billion in 2025 at a CAGR of 26.6%.
– Legal Software Global Market Report – Business Wire
Let’s look at the key trends expected to transform Contract Lifecycle Management in 2022:
Industry-Specific Models for Contract Management
Different industries have unique clauses, terms of the agreement, etc., included in the contracts. Industries across various domains are now focusing on specific contract management models that can cater to their special requirements and are flexible enough to accommodate changes in the future.
For example, a sales document for a manufacturing company will have different terms and values than a sales document for a pharmaceutical company. Thus, defining specific models of contract management is necessary. The different models can be created based on:
- Core operations of the industry
- Type of customers
- Priorities of the company
Integration With Collaboration Platforms – Google Docs & Office 365
Integration with popular business process platforms like Office 365 and Google Docs will focus on contract management teams in 2022. The main advantage of integrating these platforms is their seamless interoperability with contract management tools. Creating and updating contract documents with Google Docs and using its specific features like Find and replace, smart document updation, etc., will ease team document management.
Similarly, integrating with Office 365 will allow contract managers to leverage features like smart search and document collaboration across platforms. Other advantages of integration include:
- Accessing documents through a central repository for updating contract templates
- Ease of new template creation for contracts enabling pre-approved contract templates to create compliant contracts quickly
- Smart collaboration with tools such as Microsoft Teams fills gaps in business communication and uses technology to facilitate internal conversations
Contracts Incentives & Channel Management Will Drive B2B Commerce
The sale of a product rarely occurs directly between the business (product owner) and a customer. They mostly take place through channel partners and middle vendors of the supply chain. Thus, maintaining a stable relationship with high-performing channel partners becomes important. Focusing on seamless management of partner-driven contracts related to sales incentives, marketing incentives, or revenue sharing will be the main priority in 2022. Other areas which will be in focus will include:
- Smarter, customizable contract templates catering to the needs of partners and vendors
- Efficient management oversight on projects related to Incentives and revenue sharing for different channels
- Enhancing ownership, incentivizing innovation, and facilitating better communication with the channel partners
Deeper Adoption of CLM Beyond Legal Teams With Self-Service, BU Portals & Departmental Contract Management
Gone are the days when managing contracts was mainly a legal task, and only legal carried the needful. Contract Management advancements like Self-Service CLM, Business User Portals & Departmental Contract Management have enabled the democratization of contracts, giving executive powers to other non-legal teams.
They enable pre-approved contract templates, e-signature, automated workflows, etc., enabling professionals from sales, procurement, or HR teams to manage contracts without consulting the legal teams.
- You can draft and approve standard language for a range of contract templates and create the important questions that will help you choose the proper contract and language
- Users can have pre-approved wording tailored to their specific business needs
On-Demand Collaboration Workspaces for Vendor Management
Vendor management is an important part of the contract management process. Vendor contracts can range from simple NDAs to important supply or sales-related contracts. The main focus of the contract management teams is on exposing contracts to vendors and enabling easy collaboration for them. This leads to effective negotiation and quick processing of contracts.
Other advantages of enabling on-demand workspaces of vendors are:
- Initiating on-demand contract transactions based on negotiations
- Making quick amendments to contracts or attaching supporting documents
- The efficient contract renewal process for vendors
Sustainability With Contract Management Will Be A Priority
Today’s legal departments attempt to adapt to the changing landscape while still contributing to long-term contract management processes. Three SDGs are met by the move from paper papers to online paperwork: SDG 13 (Climate Action), SDG 15 (Life on Earth), and SDG 12 (Inclusion) (Responsible consumption and production).
Switching to paperless processes, contract work automation, smart compliance, etc., has become a priority for conscious businesses around the globe, most of whom are demanding vendors and partners to be sustainable and socially responsible.
- Contractual sustainability is also being negotiated as part of the contract agreement (ESG initiatives)
- Incorporating a CLM platform allows you to automate contract managing processes reduce manual tasks
- Digitized contract management dictates terms, conditions, and which procedures need to be completed in which order
Going Beyond Contract Lifecycle Management Towards Contract Process Automation
Businesses around the globe are focusing on facilities like seamless contract formatting, automated change detection, automated workflows, and more for their CLM processes. This is why Contract work automation is prioritized for managing the contract lifecycle from requests to renewals.
Contracts process automation extends beyond core contract lifecycle management processes supporting related processes such as renewal, amendment, claims, etc.
- Engages the right teams at the right time with unlimited contract notifications, automatic alerts, and workflow task reminders, helping to reduce the delay in the contract life cycle
- Tracks the contract cycle, automating contract creation, negotiation, execution, compliance, etc.
Enabling Channel & Supplier Communities
Nurturing communities of channel partners and suppliers can go a long way in sustaining business for firms. To induce the formation of communities, businesses can start supplier and channel partner programs. These communities can be used for product launches, enabling support, or giving the latest updates. Other ways in which channel partners and suppliers communities can be effective are:
- Creating a channel ecosystem to drive sales and lead conversions
- Facilitating collaboration among different partners for business development
- Additional support capabilities for partners and suppliers
Enabling Digital Payments & Wallets
The past two years have especially been detrimental to most businesses, but it has also facilitated digital payment processes. Digital payments and wallets are being incorporated in Contract Management processes by automating the payment processes like from distributor to retailer’s wallet and vice-versa.
Payment collection is also integrated into contract negotiation, invoicing, and accounting operations, allowing consumers to pay promptly and avoid delays and nonpayment risks.
- Assisting in the automation of payment collection while providing a seamless experience for consumers, clients, and partners
- Helping automating quoting without writing a single line of code
- Making payment collection a part of the workflows instead of a separate business process
The way we work and run our businesses has changed dramatically in the last two years. Still, it has also helped firms worldwide develop and mature by enhancing adaptability, innovation, and tenacity. It should be safe to estimate that:
- Future technology breakthroughs, like smart contracts and machine learning capabilities, will give your company the insights and knowledge it requires to stay up with today’s fast-paced environment
- Blockchain, better e-signature platforms, multi-party digital web-browsers, and other emerging technologies will continue to make Contract Management processes more efficient and versatile than ever before
- Contract Management technology will continue to advance in tandem with the professionals who use it, the papers it processes, and the individuals who create it in the future
It’s important to consider the needs of your organization as thoroughly as you would examine the features and benefits of Contract Management tools. It helps you reduce operational costs, increase productivity, and exceed your client’s expectations, and that’s exactly what we help you with.
So, are you ready to take control of your contract processes?