Contracts are the currency of all businesses, and are an important part of customer and supplier relationships. But processing them can often be disorganised, reliant on manual processes and vulnerable to siloed documentation. Each step - from tender initiation and selection to awarding, management, compliance and renewal - can splinter into different practices and norms across business units.
The result is a disconnect between best practices and realities on the ground, divergent approaches across business units, inconsistent terms and conditions, and limited visibility into overall contracting performance. There are no uniform best practices for key performance indicators (KPIs) and milestones, and each step is buried in spreadsheets, emails, and documents. These problems are particularly severe for companies with thousands of customers and suppliers.
Contract Lifecycle Management (CLM) creates a common language, templates, and unified and consistent terms and conditions (T&Cs) for contracts, with necessary flexibilities for fine-tuning and calibration, all powered by an intelligent engine that balances standardisation with adaptability. Templates, T&Cs, service level agreements, and payment and delivery milestones are all digitised clause-by-clause.
CLM harmonises practices and builds guardrails to uphold them. It provides visibility into key contract terms to meet domestic and international regulatory requirements and enforces customer, agent, and vendor compliance. CLM also provides transparency and visibility into a company’s contracting performance, allowing decision-makers to monitor and analyse trends through AI-powered analytics. This can be useful for companies with hundreds or thousands of contracts by allowing them to identify common challenges, such as vendors consistently falling short on service-level agreements.
CLM is not just important for procurement - all commercial contracts, including with customers, can be included. CLM provides a common information platform and a standardised process for managing contracts and streamlines the generation, negotiation, approval, post-contracting obligations management, and visibility of all critical documentation. It also speeds up this process by enabling teams to capture and process deals quickly without the high costs and risks of repeated manual hand-offs and re-keying.
Best practices and the need for an implementation partner
The demand for CLM solutions is growing in the Middle East. Fueled by the rise of digitisation, automation, and related technology, contract intelligence and contract data are turning from nice-to-haves to must-haves for most regional organisations. This is needed to deal with regulatory requirements and ensure business continuity.
Although CLM technologies have improved substantially in recent years - thanks to advances like artificial intelligence (AI) and automation, as well as greater connectivity and digitisation powered by cloud computing - identifying CLM technology is only the first step. Organisations also require an implementation partner who can help them select the right technology and, more importantly, operationalise and implement the solution.
CLM technology providers are point-solution vendors selling a commoditised product. They need to understand the nuances of the organisation in terms of business processes, and the varying requirements of access and control. The challenges companies face across their contracting processes are often process-driven, such as manual and siloed contracting processes, limited contract insights, manual tracking of obligations, and long turnaround times. Subscribing to a technology alone will not resolve these challenges, and CLM technology providers seek support from professional services organisations to ensure effective software implementation.
Every company is unique, and needs a trusted partner who can configure the right technology for their business and support them to operationalise it. Over the past few years, PwC has built capabilities on leading CLM technology solutions, and worked with global organisations to support implementation. We are a one-stop provider, offering a comprehensive solution from vendor selection to product implementation support to policy and process design to legacy migration and project or change management. We have professional partnerships with leading vendors and have strategised, designed, and implemented solutions for clients based on business needs and priorities. This has enabled our clients to improve their understanding of contracting-related risks, ensure and enforce compliance, streamline their contracting lifecycle, and enhance post-contract management.
Contract lifecycle management in action
