ContractPodAi, provider of the award-winning AI-powered, contract lifecycle management (CLM) platform, today released the findings of its survey revealing the value contracting best practices and CLM technology bring to the business, along with its Contract Management Maturity Model (CMMM), to help businesses assess where they are in their CLM maturity and how they can further progress.
Of the legal professionals surveyed, there was a significant disparity between organizations that adopted automated CLM technologies who ranked higher on the model, compared to those who ranked lower. Results revealed that organizations with more mature automated processes for their CLM are:
- More secure: 54% of organizations say contract risk has a major impact on their business but only 4% of legal teams with manual processes strongly agree they are aware of key contractual risks to their organizations.
- More efficient: Fully Automated CLM processes enable 78% of companies to address legal requests within 72 hours, while teams dependent on manual processes only have a response rate of 33%.
- More productive: Legal teams experience a 50% reduction in contract delays caused by staff shortages and heavy workloads.
- More focused: Contractual obligations are missed 75% less often than those who work with manual processes.
Despite the promising results, 70% of respondents stated that their CLM processes are not fully automated, with 19% admitting their CLM process is mostly manual. This data points to a clear chasm between those further ahead in their CLM maturity and those who need to consider how they will initiate and develop that transformation.
“Contracts are the lifeblood of a company and poor contract management has a direct impact on a company’s bottom line,” said Jerry Levine, Chief Evangelist & General Counsel at ContractPodAi. “While legal often owns the CLM initiatives, every stakeholder in the business benefits from automating contractual processes, and the company as a whole will see time and cost savings, increased ROI, and improved efficiency, through embracing this technology. Thankfully, we live in an era where technology has made huge advances. For instance, Leah, ContractPodAi’s generative AI solution, is revolutionizing the way in which CLM services are delivered by increasing efficiencies and raising the value of legal professionals around the globe. Most importantly, amidst economic uncertainty, legal teams need the ability to scale quickly with reliable and effective CLM solutions.”
McKinsey & Company estimates leakage due to unfulfilled obligations at 2% in large enterprises, for an enterprise with $2 billion in annual spending. This adds up to $40 million a year and more than half of the respondents noted that the frequency of missing contractual obligations or service levels happens on an annual basis. The higher the organization ranked on the CLM maturity model, the less often they miss their contractually obligated targets or service levels, saving costs for the entire organization.
“Although legal teams have traditionally been behind when it comes to adopting new technologies, the onset of new tools such as generative AI will increase their comfort level in general with technology, which will accelerate their adoption of these tools,” said Atena Reyhani, Chief Product Officer at ContractPodAi. “This will help to fuel the adoption of automated CLM processes by legal teams, and this report will serve as a guide for teams embarking on this journey.”
As the value delivered by new technology and AI grows, the impact that CLM has on the entire organization is increasing exponentially. By understanding the behaviors and outcomes of the different levels of CLM maturity, organizations can learn how investing in their contractual process can support them in increasing efficiencies, security, and productivity.
The survey, conducted in collaboration with Global Surveyz Research (GSR), a global research firm, gathered input from 400 full-time employees who work in legal departments. Responses were mapped to the Contract Management Maturity Model, comprising 5 levels with level 1 representing basic, mostly manual processes to level 5, an aspirational state of complete CLM automation.
To read more findings from the survey, please click here.
About ContractPodAi:
Recognized as a Visionary by Gartner in 2021 and 2022, ContractPodAi is on a mission to transform the way the world makes agreements. Lawyer-led and AI-powered, our ‘One Legal Platform’ was initially developed by attorneys as a solution for legal teams. Now, more than ever, it’s clear legal teams aren’t the only ones struggling with insurmountable workloads and complex contracts. That’s why we’ve spent over a decade evolving our AI with our CLM to offer an all-in-one platform where teams use tools like Leah, our intelligent AI sidekick and legal whiz, to take charge of their contract management process.
ContractPodAi amplifies your business’s readiness through our partnerships with complementary technology providers including Microsoft, DocuSign and Salesforce. ContractPodAi® is headquartered in London and has global offices in New York, Glasgow, Sydney, Mumbai, and Toronto.
Learn more about ContractPodAi at: https://contractpodai.com/
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