What are the emerging trends and challenges in contract management?

1 Digital transformation

One of the most significant trends in contract management is the digital transformation of the entire P2P cycle. This means using technology such as cloud, artificial intelligence (AI), blockchain, and automation to streamline and optimize contract creation, execution, analysis, and renewal. Digital transformation can help you improve efficiency, accuracy, visibility, and collaboration in contract management, as well as reduce errors, delays, and disputes. However, digital transformation also requires you to invest in the right tools, skills, and processes, as well as ensure data security, quality, and governance.

2 Regulatory compliance

Another major challenge in contract management is the increasing complexity and variability of regulatory compliance. This means complying with various laws, standards, and policies that apply to your contracts, such as data protection, environmental, social, and governance (ESG), anti-corruption, and trade sanctions. Regulatory compliance can help you avoid legal penalties, reputational damage, and contractual disputes, as well as enhance your social responsibility and trust. However, regulatory compliance also requires you to monitor and update your contracts regularly, as well as ensure alignment and consistency across different jurisdictions, industries, and stakeholders.

3 Supplier relationship management

A third important trend in contract management is the shift from transactional to strategic supplier relationship management (SRM). This means developing long-term partnerships with your vendors based on mutual value, trust, and collaboration. SRM can help you improve your contract performance, innovation, and resilience, as well as leverage your suppliers' expertise, capabilities, and networks. However, SRM also requires you to align your goals, expectations, and incentives with your suppliers, as well as measure and manage your supplier performance, risk, and satisfaction.

4 Contract lifecycle management

A fourth key challenge in contract management is the integration and optimization of the entire contract lifecycle management (CLM) process. This means managing your contracts from initiation to termination, covering all the stages such as drafting, reviewing, approving, signing, storing, tracking, and renewing. CLM can help you increase your contract value, compliance, and visibility, as well as reduce your contract cycle time, costs, and risks. However, CLM also requires you to standardize and automate your contract workflows, templates, and clauses, as well as enable cross-functional and cross-organizational collaboration and communication.

5 Contract analytics

A fifth emerging trend in contract management is the use of advanced analytics to extract insights and intelligence from your contracts. This means using data science, machine learning, natural language processing, and visualization to analyze your contract data, such as terms, obligations, performance, risks, and opportunities. Contract analytics can help you improve your contract decision making, negotiation, optimization, and innovation, as well as identify and mitigate contract issues and gaps. However, contract analytics also requires you to collect, clean, and integrate your contract data, as well as apply the appropriate analytical methods and tools.

6 Contract skills

A sixth vital challenge in contract management is the development and retention of the necessary contract skills and competencies. This means having the knowledge, abilities, and attitudes to manage your contracts effectively and efficiently. Contract skills can help you enhance your contract quality, value, and outcomes, as well as adapt to the changing contract environment and expectations. However, contract skills also require you to invest in continuous learning, training, and development, as well as attract and retain talent and expertise.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?