A recent survey by the IACCM showed that In-House legal and Contract Management teams are the most influential internal stakeholders when it comes to evaluating Contract Lifecycle Management software solutions. But do these two groups universally own the contract process?
Naturally, one would think, that because contracts are legal documents that outline the terms and conditions of a particular business transaction or relationship, that the Corporate Counsel would take ownership of the contracting process?
In real life however, this is not always the case. In-House Legal, as with other internal stakeholder groups, tend to have their own specific areas of interest and requirements when it comes to Contract Management. This tends to reflect the level of activity or responsibility that an internal stakeholder group has at a particular point in time in the contract lifecycle.
Since In-House Legal teams are more often involved in the contract drafting, negotiation and approval process, their requirements for Contract Management software and their level of interest in the contract process tends to cover the contract creation, workflow, document review and document storage – usually ceasing at the point when the contract is signed and made active.
However, to other stakeholder groups in the organisation, that is precisely where they begin to become intersted in the contract process. Keeping track of contracted commitments and obligations is a real problem for many line-of-business functions, like Procurement, Sales and Finance, who may resort to keeping a spreadsheet or database of contract milestone data in an attempt to keep track of key commitments.
Is it the flavour of contract that dictates who owns it? If we were talking about Sales contracts, should we assume that the Sales or Commercial function owns those contracts? What about the business functions who are responsible for delivering a product or service to a customer, or who are responsible for billing the customer in accordance to the terms outlined in the contract, the teams providing post-sales service and support?
The necessity to track and manage the entire contract lifecycle including drafting, internal approvals, external negotiation, contract document management, obligations management, reports and alerts is becoming an enterprise-wide discipline. The commercial benefits of streamlining and controlling the contract process are potentially enormous to those organisations who can bridge departmental silos and create stakeholder unity around Contract Management, not to mind complying to industry and corporate governance regulations along the way.
Perhaps it is time to appoint the Chief Contract Officer?