AI-Enabled Contract Life-Cycle Management Software Drives Significant Performance Improvements Over Traditional Methods
MIAMI--(BUSINESS WIRE)--Sep 10, 2024--
The Hackett Group, Inc. (NASDAQ: HCKT) released the first Digital World Class Matrix™ focused on the contract life-cycle management (CLM) and intelligence software market – a core component of the upstream procurement tools within the source-to-pay (S2P) technology landscape driven by rapid artificial intelligence (AI) innovation and increasingly complex business requirements.
CLM spans the life of a contract from initiation through award, compliance, tracking and renewal. Optimizing and aligning CLM with processes like sourcing and risk management is critical to the successful operation of businesses of all sizes. With 28% of companies planning to pilot CLM technology and increasing investments in AI-driven solutions in 2024, the market is projected to grow by 11% this year according to recent research from The Hackett Group.
The potential value for a $5 billion to $10 billion organization is transformative. By implementing a CLM solution, the Digital World Class Matrix™ report revealed these companies can achieve 45% in operational efficiency gains in the negotiation and supplier contract creation process, reduce contract cycle times by 35%, and cut noncompliance-related losses fivefold. These outcomes underscore the critical role of CLM in optimizing procurement processes and unlocking significant financial benefits for large enterprises.
“Contract life-cycle management offers an unparalleled opportunity for organizations to realize significant value through streamlined processes and better compliance,” said Chris Sawchuk, principal and Global Procurement Executive Advisory practice leader at The Hackett Group. “Selecting the right CLM partner can unlock substantial benefits – from reduced cycle times to improved risk management – ultimately strengthening their competitive position.”
The CLM Digital World Class Matrix™ is a comprehensive guide for understanding the evolving aspects of the CLM market, analyzing providers’ differentiated capabilities and the value that organizations can expect. Offering insights for buyers and vendors, the report draws on extensive interviews and 18 criteria to evaluate 21 AI-enabled providers, including S2P suites, CLM specialists, document automation specialists, and legal information solution suites.
The Hackett Group’s 2024 study of procurement executives found that generative artificial intelligence (Gen AI) has the most potential in three key areas: spend analytics, category management and CLM. Leading CLM solution providers differentiate themselves by integrating advanced AI capabilities across their platforms. From AI-driven contract creation, risk management and enhanced search functionalities, to data analysis and intelligent obligation management, these providers are leveraging AI to offer more robust and efficient contract management solutions.
The results from the CLM Digital World Class Matrix™ demonstrate the significant benefits of adopting or upgrading CLM systems:
- Customer satisfaction: 89% of customers were very satisfied or extremely satisfied with their CLM solution and felt it was worth the investment.
- Contract management: After implementing CLM solutions, 81% of contracts were successfully managed through the system.
- Faster contracts: On average, contract completion times improved by 35%, thanks to smart automation, better workflows, and enhanced visibility into contract status, risks, and critical milestones.
- Business improvements: About 80% of companies achieved their business improvement goals after implementing CLM and redesigning their processes.
- Efficiency improvement: CLM implementations led to a 63% improvement in contracting efficiency and automation.
“As companies evolve, they quickly move beyond the basic needs of contract standardization, extraction, workflow automation, electronic signature and retrieval,” said Richard Gardner, senior director of Market Intelligence at The Hackett Group. “Companies are seeking and expecting AI-enabled capabilities such as contract interaction, assisted contract reviews, automated scoring of contracts, negotiation intelligence, obligation management and predictive analytics.”
By leveraging this comprehensive analysis and a deep understanding of stakeholders and requirements, procurement and legal professionals can make informed decisions to optimize operations, deliver competitive advantages, and fully realize the potential of next-generation CLM technologies. Service providers, in turn, can gain valuable insights into market trends and client needs, enabling them to enhance their offerings and strengthen their market position.
The CLM Digital World Class Matrix™ should be read in the context of the entire report. The Hackett Group’s full 78-page report is available to The Hackett Group’s Executive Advisory members on Hackett Connect™. A complimentary summary is also available for immediate download. Inquiries regarding purchase of the full research report can be made by visiting our Market Intelligence webpage.
About The Hackett Group
The Hackett Group, Inc. (NASDAQ: HCKT) is an IP-based, Gen AI strategic consulting and executive advisory firm that enables Digital World Class ® performance. Using AI XPLR ™ – our AI assessment platform – our experienced professionals guide organizations to harness the power of Gen AI to digitally transform their operations and achieve quantifiable, breakthrough results, allowing us to be key architects of their Gen AI journey.
Our expertise is grounded in unparalleled best practices insights from benchmarking the world’s leading businesses – including 97% of the Dow Jones Industrials, 89% of the Fortune 100, 70% of the DAX 40 and 55% of the FTSE 100 – and are delivered leveraging our Digital Transformation Platform, Hackett Connect ™ and Quantum Leap ®.
For more information on The Hackett Group, visit: https://www.thehackettgroup.com/ or email: media@thehackettgroup.com.
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This release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements including without limitation, words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” or other similar phrases or variations of such words or similar expressions indicating, present or future anticipated or expected occurrences or outcomes are intended to identify such forward-looking statements. Forward-looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Factors that may impact such forward-looking statements include without limitation, the ability of The Hackett Group to effectively market its digital transformation, artificial intelligence, and other consulting services, competition from other consulting and technology companies that may have or develop in the future, similar offerings, the commercial viability of The Hackett Group and its services as well as other risk detailed in The Hackett Group’s reports filed with the United States Securities and Exchange Commission. The Hackett Group does not undertake any duty to update this release or any forward-looking statements contained herein.
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KEYWORD: FLORIDA UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: SOFTWARE DATA ANALYTICS CONSULTING ARTIFICIAL INTELLIGENCE DATA MANAGEMENT PROFESSIONAL SERVICES TECHNOLOGY BUSINESS
SOURCE: The Hackett Group, Inc.
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