Zycus had brought you a Contract Management ROI webinar series to provide insights on how AI-powered Enterprise CLM solutions can lead to extended savings, increased ROI, and growth in revenue through contracts while the organizations move to a digital transformation journey.
IACCM estimates, “As much as 80% of the revenue that flows through B2B deals is governed by numerous contracts.” And to be more specific, around 70% of the organization’s revenue comes in through 20% of those contracts. That changes the way we should look at contracts, they are the mines for valued information. Despite all the importance attached to contracts, a significant number of companies still use manual or traditional contract management solutions.
In this series, we focused on some areas that offer organizations opportunities to identify and implement savings measures under existing contracts. Here are the key takeaways from the webinars:
Session 1: A Business Case for Contract Management Software – Extending Savings & Contract Management ROI
An organization using an advanced CLM solution can deliver payback as high as 200% in a year as the legal team will spend 20% fewer hours in managing contracts, and thus, will be able to handle 25% more contracts per year. In our first webinar of the series, you will not only get to know how a smart CLM solution acts as your eyes and ears to ensure contract vigilance across the contract ecosystem but can also reduce financial losses by over 50%.
According to a Research by Aberdeen Group, implementing a CLM results in a 24% reduction in the sales cycle. With shorter sales cycles, an organization can get more business done with the same sales team size in the same amount of time.
Depending on the usage of AI analytics, if we take the case study of ACME Roller Skates Company, the first-year manpower savings range from 22% to 27% with a conservative 3 years NPV savings of $4,250,000.
Try our ROI Calculator and Find out how much using a CLM solution can help you.
Session 2: ROI for Revenue – Multiply Contract Revenue with AI-Powered CLM
Smarter and timely negotiations yield better deals during renewals. Our findings show that there is an average of 4.5% increase in revenue when the sales team had 30 days advance notice of an upcoming renewal. Similarly, we saw a 5.3% increase in revenue for contracts renewed when the account team had advance notice of 45 days about the upcoming renewal.
On average, 70-95% of revenue comes from upsells and renewals. One of the easiest ways to grow contract revenue is through effective cross-sell and upsell to existing contract holders. This is exactly what the second webinar of the series takes you through. It demonstrates how to generate additional revenue more efficiently than selling to new customers, leading to increased customer lifetime value, and building stronger customer relationships in the process.
Contributory revenue is also improved through the effective mapping of contract entitlements. Easy access to customer contracts enables the accounts team to take advantage of entitlements that can be mapped to milestones and metrics. Also, the CLM provides reminders, tracking, and threshold triggers to the key stakeholders.
An advanced Contract Management technology driven by AI allows quicker sales and revenue cycles through automation across every stage of the contract lifecycle, accelerated contract creation and approval, 360-degree view of contract data, and automated alerts and reminders. Thus, organizations can close contracts faster to realize additional revenue.
Session 3: It’s About the Economy – Cost Savings – How to Leverage AI-Powered CLM
Around 80% of B2B revenue is governed by contracts, making them the backbone of businesses. Organizations can save significantly through effective implementation and management. An Merlin AI-powered CLM identifies hidden benefits in your contracts and improves the performance of suppliers and contracts through timely performance tracking and effective resolutions.
Costs can also be reduced through vendor and contract consolidation. Effective restructuring of vendor relationships through increased collaboration using a CLM platform can be used to identify cost-saving opportunities by combining forces. Contract Analysis finds that an average of 10% of the total procurement budget can be consolidated to fewer contracts or vendors.
Harvard Business Review says, “It has been estimated that inefficient contracting causes firms to lose between 5% to 40% of value on a given deal, depending on circumstances.” Simple CLM integrations can provide greater visibility and transparency of contracted line items to e-procurement users, to realize 17-19% savings as compared to an off-contract purchase.
CLM solutions automatically alert contract managers in advance of the upcoming renewal deadline. By providing both advanced notice and contract details to contract managers you can expect to save an additional 5% through renegotiation of auto-renew contracts.
Do check the last webinar of the series to unlock the power of AI in your Digital Contract Management journey to overhaul your revenue and cost savings processes.
Related Read:
ROI and Cost Saving Strategies for Contracts
Realizing ROI From Contract Management Technology
The Definitive Guide To Making A CLM Business Case – ROI & More
