Contract Logix Publishes “Contract Management at Manufacturing Companies: Roles, Tools, Challenges & Obstacles”
New Research Study Uncovers the Contract Lifecycle Management Environment at Pharmaceutical, Consumer Goods, Industrial Machinery and Other Manufacturing Sectors
Lowell, MA – Contract Logix – a long-time developer of contract lifecycle management (CLM) software solutions – announced today the publication of a study of contract management professionals from numerous manufacturing sectors regarding the tools they use, the challenges they encounter, and the obstacles that prevent them from optimizing their contract lifecycle. Entitled “Contract Management at Manufacturing Companies: Roles, Tools, Challenges & Obstacles,” the study stems from a survey of 550 individuals who are responsible for creating, editing or managing contracts at their organizations but do not use purpose-built contract lifecycle management software.
This study found that the most commonly used tool in manual contract management across all respondents was email, but findings vary by manufacturing sector. Other findings of interest include:
- The majority of individuals (57%) responsible for contract management within the manufacturing industry work in purchasing and procurement.
- The inability to extract key data from contracts for tracking and reporting purposes was the most frequently cited challenge.
- Procurement and finance lead the functional areas that would be involved in the selection of contract management software within manufacturing organizations.
One of several concerning findings of the study is that nearly one in four contract management professionals in the manufacturing industry either doesn’t know that contract management software exists, or doesn’t know what to look for in a solution, so they continue to struggle with a variety of tools and manual processes.
“Contract management is increasingly recognized as a critical competence in delivery of improved business results, tackling costly issues such as missed deadlines, failure to meet contract terms and disputes over scope. Without automation, these common challenges will persist, causing businesses to erode profit and lose competitiveness. This report shows the scale of the problems within the manufacturing sector and should be a call to action for anyone who cares about the future of their business,” according to Tim Cummins, President and CEO of the International Association of Contract and Commercial Management.
In a manufacturing environment, the implications of simply not being able to locate the most recent version of a contract are considerable. The cost of missing a single contracted obligation can easily outweigh the cost of a CLM solution. Imagine, on the supplier-side, failing to realize that after purchasing a certain number of units the price per unit paid by the manufacturer drops by 20%, for example.
“Contract Lifecycle Management software can help solve many of the challenges uncovered by the study,” notes Tim Donaghy, Chief Product Officer at Contract Logix. He goes on to state, “As the CLM software marketplace matures, we expect these obstacles for manufacturing companies to decrease.”
Per Gartner’s Nigel Montgomery, who covers the CLM space, “If you are unsure whether you are facing a contractual risk, you likely need to invest in CLM.”*
To download all the results of the study, including those specific to pharmaceutical, consumer goods, industrial machinery, electronics and other manufacturing sectors go here: http://bit.ly/2kaMOLn
*Gartner, Hype Cycle for Procurement and Sourcing Solutions, 2016, 02 August 2016