AI-Enabled Contract Life-Cycle Management Software Drives Significant Performance Improvements Over Traditional Methods
Potential 63% Improvement in Procurement Operational Efficiency Revealed
CLM spans the life of a contract from initiation through award, compliance, tracking and renewal. Optimizing and aligning CLM with processes like sourcing and risk management is critical to the successful operation of businesses of all sizes. With 28% of companies planning to pilot CLM technology and increasing investments in AI-driven solutions in 2024, the market is projected to grow by 11% this year according to recent research from
The potential value for a
“Contract life-cycle management offers an unparalleled opportunity for organizations to realize significant value through streamlined processes and better compliance,” said
The CLM Digital World Class Matrix™ is a comprehensive guide for understanding the evolving aspects of the CLM market, analyzing providers’ differentiated capabilities and the value that organizations can expect. Offering insights for buyers and vendors, the report draws on extensive interviews and 18 criteria to evaluate 21 AI-enabled providers, including S2P suites, CLM specialists, document automation specialists, and legal information solution suites.
The Hackett Group’s 2024 study of procurement executives found that generative artificial intelligence (Gen AI) has the most potential in three key areas: spend analytics, category management and CLM. Leading CLM solution providers differentiate themselves by integrating advanced AI capabilities across their platforms. From AI-driven contract creation, risk management and enhanced search functionalities, to data analysis and intelligent obligation management, these providers are leveraging AI to offer more robust and efficient contract management solutions.
The results from the CLM Digital World Class Matrix™ demonstrate the significant benefits of adopting or upgrading CLM systems:
- Customer satisfaction: 89% of customers were very satisfied or extremely satisfied with their CLM solution and felt it was worth the investment.
- Contract management: After implementing CLM solutions, 81% of contracts were successfully managed through the system.
- Faster contracts: On average, contract completion times improved by 35%, thanks to smart automation, better workflows, and enhanced visibility into contract status, risks, and critical milestones.
- Business improvements: About 80% of companies achieved their business improvement goals after implementing CLM and redesigning their processes.
- Efficiency improvement: CLM implementations led to a 63% improvement in contracting efficiency and automation.
“As companies evolve, they quickly move beyond the basic needs of contract standardization, extraction, workflow automation, electronic signature and retrieval,” said
By leveraging this comprehensive analysis and a deep understanding of stakeholders and requirements, procurement and legal professionals can make informed decisions to optimize operations, deliver competitive advantages, and fully realize the potential of next-generation CLM technologies. Service providers, in turn, can gain valuable insights into market trends and client needs, enabling them to enhance their offerings and strengthen their market position.
The CLM Digital World Class Matrix™ should be read in the context of the entire report. The Hackett Group’s full 78-page report is available to The Hackett Group’s Executive Advisory members on Hackett Connect™. A complimentary summary is also available for immediate download. Inquiries regarding purchase of the full research report can be made by visiting our Market Intelligence webpage.
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