Digital World Class® Contract Life-Cycle Management Matrix

New insights reveal powerful trends in contract life-cycle management (CLM). On this episode of the “Business Excelleration^® Podcast,” Andy Warzecha – with Chris Sawchuk and Rick Gardner – dive into The Hackett Group’s latest CLM study. CLM solutions are enhancing contract management with artificial intelligence (AI) for data extraction and seamless integration with enterprise resource planning and customer relationship management systems. Discover what 89% of organizations found valuable in their solutions, plus trends in AI-driven contract management.

Welcome to The Hackett Group’s “Business Excelleration^® Podcast,” where week after week we hear from experts on how to avoid obstacles, manage detours and celebrate milestones on the journey to world-class performance. This episode is hosted by Andy Warzecha, principal at The Hackett Group. He is joined by Chris Sawchuk, Global Procurement practice lead, and Rick Gardner, senior director in the Market Intelligence program. They discuss The Hackett Group’s Digital World Class^® Matrix Study, focusing on contract life-cycle management (CLM) and intelligence.

To begin, Chris outlines two distinctive aspects of the study. First was taking a very broad look at CLM to differentiate themselves from other organizations doing similar studies. The Hackett Group’s study examines not only specialized CLM providers but also source-to-pay suite providers, legal information solutions, and document automation providers. Second was assessing the actual value delivered to customers, including the speed of implementation, solution usability, and achievement of customer-defined objectives. Customer feedback and engagement were central to the evaluation, providing insights into usability and the effectiveness of solutions in meeting predefined goals.

Next, Rick elaborates on the methodology, which included analyzing 21 vendors over several months. The process involved collecting data from vendors through requests for information, performing strategy sessions and solution demonstrations, and conducting over 100 customer interviews to understand experiences post-implementation. This data was analyzed and fact-checked with vendors to ensure accuracy and comprehensive reporting. Among the findings revealed in the study were four key trends. First, broad integration of generative artificial intelligence (Gen AI) across CLM solutions. Second, high customer satisfaction, with 89% reporting significant value realization. Third, improved business outcomes, cycle times and process automation. The final finding was enhanced compliance, data visibility and intelligence, though some mismatches occurred between solutions and specific client needs.

Solution providers also distinguished themselves in multiple areas. In terms of integration, leading solutions effectively integrate with tools like customer relationship management, enterprise resource planning, and office productivity software, as well as risk management systems. Leading companies also demonstrated flexibility and support for multiple contract types leading to broader adoption. They also reported advanced use of AI for content generation and legal data integration, and multipoint risk assessment and automated remediation capabilities. Finally, tools for milestone tracking, compliance monitoring and integration with budgeting systems.

The Hackett Group views Gen AI as an organizational imperative, particularly in CLM. AI’s ability to handle unstructured data, such as large contracts, has proven transformative. Key features include contract summarization and categorization, automated contract authoring, and life-cycle management. The study found AI embedded across all CLM processes, enabling unprecedented efficiency and insight. The conversation highlights the transformative potential of AI across all stages of the contract life cycle – from data handling to process optimization. The discussion sets the stage for exploring more nuanced applications in future analyses.

Time stamps:

• 0:12 – Welcome to this episode hosted by Andy Warzecha.
• 1:26 – The Hackett Group’s unique approach to the study.
• 6:32 – Key findings from the study.
• 9:37 – Differentiators among solution providers.
• 15:04 – Closing insights on AI in CLM.