The next frontier of contract management

Over the last year, there have been several major legislative changes to how business operations and data exchanges will be conducted.

With the Electronic Trade Documents Bill, the Northern Ireland (NI) protocol data sharing agreement, and the Schrems II legislation all now in effect, leaders have to navigate one of the most complex regulatory landscapes as they enter a period of great economic uncertainty.  

“There can be no doubt that enterprises have huge digital transformation projects ahead of them,” says Charlie Bromley-Griffiths, Corporate Counsel at Conga.

“All businesses will have to review their operations to ensure personal data transfers are lawful and compliant, and remain vigilant for the road ahead. After all, risk comes with every contractual agreement; however, it is important to mitigate as much risk where possible.” 

Bromley-Griffiths emphasises that it is never a good idea to grow complacent, especially with contract management. “As we enter a recession,” she says, “budgets are shrinking and customers’ buying behaviours are shifting.”

Gartner reports that most organisations have been forced to re-evaluate their go-to market strategies. Commercial agility is proving key to businesses’ survival. Leaders must stay ahead of any emerging market trends by adjusting their revenue operations (RevOps) model accordingly. 

The current state of data and contract management 

Early into the pandemic, contract management and post-signature solutions were accelerated. Customers and suppliers raced to seek variations to terms, understand the status of performance, to identify obligations, rights, and the implications of contract change and amendment. 

“There was an increased focus on the application of artificial intelligence (AI) such as Large Language Models to provide more consistency of service and better risk management,” says Bromley-Griffiths, “especially when it came to managing the increase in paperwork and document drafting.” 

A recent study by Globality revealed that 90% of procurement leaders are currently in the process of transforming their operating models, with 87% focusing on building data teams that gain more predictive insights and deploy new technologies to better meet the challenges of today’s volatile business world.

More recently, Schrems II required businesses to carry out risk assessments before transferring data from the EU and EEA to countries that aren’t deemed adequate, complying with new international data transfer regulations.

Bromley-Griffiths says: “Since then, companies have had to put a whole range of new processes in place to comply with export jurisdictions, execute transfer impact assessments, and establish new cross-border data flows.

“In fact, many will have had to remediate hundreds, if not thousands, of existing contracts to include the updated standard contractual clauses (SCCs).”

She continues: “As a result, organisations need to be far more proactive, anticipating change rather than responding to it; ‘doubling down’ on extracting value from their current resources and better managing their costs; and constantly reviewing their means of working. However, this requires a far more comprehensive and flexible RevOps model.”

Establishing a more effective RevOps model 

According to Bromley-Griffiths, without an effective contract management structure, a gap in value can arise over the lifetime of the contract, wherein the anticipated benefit at the start of the arrangement is gradually eroded over time. “Effective contract management can help avoid this by enabling enhanced value to be derived from contracts,” she says.

Digital transformation programmes are incredibly complex. Therefore, leaders should view these recent legislative changes as an opportunity to reassess and streamline their vital business processes. Rather than rushing digital change programmes, adopting new technologies, and scaling these initiatives at pace, leaders should instead be more strategic with their investments.

She says: “It is best practice to start off by reviewing legacy systems and establishing clear objectives prior to implementation, prioritising vital business processes.”

She points out that organisations need to think beyond how they incorporate technologies, such as contract lifecycle management, machine learning, and AI, into their contracting lifecycles, and how it can be managed from a company-wide perspective. “Rather than approaching contract management in a vertical way, leaders need to consider how contracting technology, and contracts themselves, can be drawn up more comprehensively and collaboratively across different business functions.

“It is also about embedding a pro-data culture throughout the organisation – from the board to the sales team. This itself can be challenging as the organisation must first establish a system to identify, assess, and manage risk exposure while ensuring they have the appropriate measures and technology in place that are aligned with clear business goals.” 

Complete end-to-end contract management

End-to-end contract lifecycle management maximises the value of every contract with tools to automate and standardise processes, lower risk and boost compliance, as well as speed up contract management tasks and improve efficiency.

This can only be achieved, though, if organisations have their data in order first. Bromley-Griffiths says: “It is vital that leaders review their internal structures and unify systems of record to ensure all data is accounted for, flowing between teams.  

“Leaders also need to identify and streamline the business processes and implement technology to complement their revenue goals. This can allow departments to focus their time and resources on the more complex, strategic issues. Only after reviewing legacy systems, prioritising key revenue processes, and adopting new solutions in a phased manner will contract intelligence technology provide genuine benefits and improve overall business performance. 

“Teams will then be able to focus on operations, benefitting from the faster delivery of products and services to market without being held up by unnecessary process and legal aspects. By establishing a cohesive and proactive RevOps strategy, organisations will be able to identify trends, areas of improvement, and provide insight into data flows to help accelerate revenue streams.”

Looking towards the future 

Now, businesses are in the midst of a new digital landscape and there’s no doubt that there will be other changes in the future. “Moving forwards, companies should address these challenges head-on, regularly reviewing their internal operations and having clear measures in place,” says Bromley-Griffiths.

“By taking the technical steps more proactively, organisations can build up critical capabilities and maintain their customers’ trust. In return, businesses will be better prepared for all outcomes and enter the new frontier of contract management.”