Tieto Finland Oy
Author: Tim Cummins
My title is a quote from an executive at contract management provider Icertis and helps explain the growing momentum and interest in contract-related technologies.
The field remains volatile, as evidenced by two recent acquisitions – Exari with Coupa and Determine with Corcentric. These moves by two finance-oriented software providers further illustrate the point that today's contract management tools are increasingly focused on economic value rather than simply control and compliance. While Determine has been operating in various forms for some 20 years and has always been praised for the quality of the user interface, Exari is a much newer entrant to the field and has developed some excellent risk management and contract production tools, making extensive use of artificial intelligence. Both of these are interesting moves and continue the wave of consolidations that have typified the market in recent years.
The move by Coupa is especially worth watching since it appears to be an effort to address the limitations of traditional spend-management solutions, which have struggled to offer meaningful contract management support. The concept behind this acquistion is therefore attractive and, subject to successful integration of the two systems, should position Coupa extremely favorably relative to its main competition.
The broader market
Meantime, the overall market remains highly fragmented, with multiple providers jockeying for position. IACCM's free contract software comparison tool is assisting several thousand potential buyers each month as they seek to understand their options and the best fit for their requirements. In the last week, I have had fascinating discussions with leaders from Icertis and SirionLabs, both of which continue to win major new accounts and are at last achieving enterprise-wide adoption, with their post-award functionality providing a compelling return on investment.
Procurement contracts remain the major focus for many providers. Their clients appear to believe that this is where they can achieve substantial savings and drive faster cycle times. Many also see automation as an alternative to improving contract-related skills – or perhaps as a necessary pre-cursor. By consolidating lifecycle data, they will start to identify major opportunities to reduce value leakage and cut the cost of their commercial operations.
However, there are providers who continue to make headway with sell-side contracting. Pramata is one of those and has today announced further enhancements to its Commercial Relationship Baseline, which it claims is effective at 'eliminating billing errors, driving more profitable upsells and renewals, and reducing customer churn'.
The bottom line
It is encouraging that we are at last seeing far more compelling reasons for acquiring contract-related software. For too long, the return on investment was predicated on nebulous resource and efficiency savings that proved at best elusive and at worst unrealizable. The latest generation of tools are far more adaptable and agile, using APIs to support the dataflows on which contract performance and intelligence depends. In fact, these systems are fast exposing the inadequcy of traditional internal systems which one provider describes as 'clunky and slow'. At last, the scale of potential improvements in both cost reduction and revenue increase is being both understood and realized.
Digitizing contracts is indeed an eye-opener – at least for those who choose to see.