Leading Experts Cite Reasons to Obtain Contract Management Software
Did you know…
- According to an Aberdeen Group study of 189 organizations:
-Just 64% of purchasing transactions comply with the terms of their contracts. Ineffective control and management of supplier contracts costs businesses $153 billion per year in missed savings opportunities
-The percentage of an enterprise’s revenue dictated by a contract is likely to rise from 56% to 68% over the next two years. It is essential for enterprises to have contract information at their fingertips for historical analysis, forecasting, risk assessment, analysis, and revenue recognition.
-Respondents report that on average their enterprises lose 9% of their revenues due to regulatory penalties, missed deadlines, lost sales, maverick pricing, and transactional errors.
-Due to non-standard language, we found on average 18% of an enterprise’s sales cycle is attributed to contract creation, negotiation, and approval. A one day reduction in the sales cycle is worth an average $80,000 and in some cases exceeds $250,000. Enterprises have shown a reduction in this key metric by approximately 20% due to improved contract management”
- Companies spend nearly 5% of their revenue to track agreements after contracts have been signed - Goldman Sachs
- By 2008, in 80% of enterprises, the cost of contract management will have doubled from 2002 costs from 2% to 4% of SGA - Gartner Group
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90% of enterprises view the effective creation, monitoring, and management of contracts as either very important, or critical, to their overall success. But less than a third even have a central contract repository which is a critical element to effective contract management - Aberdeen Group/Penton Study
- 12% of a company’s total annual costs may be allocated to contract management and administrative tasks - PriceWaterhouseCoopers
- Companies which utilize contract management software can reduce their annual contract management expenses by 20 to 50 percent - Goldman Sachs
