Author: Tim Cummins
There is extensive discussion about emerging technologies such as artificial intelligence, natural language processing and blockchain, with wide acceptance that they will have significant impact on contracts and contract management.
But beyond driving greater automation and streamlining many traditional activities, what other changes might we expect?
The most important impact for business will be the release of ‘big data’ – insights that have until now been hidden inside the contract and associated performance data that defied causal analysis because there are too many variables for the human mind to extrapolate.
The game-changer: data and reporting
So as we design and prepare for the new systems that are starting to emerge, what specific contract and commercial data and reporting will be of value in providing key management information? Here are six suggestions of the things we will soon be able to do and which will represent ‘world class’:
- monitor the correlation between the terms or contract model used and the level of success in business outcome;
- rapidly observe shifts and trends in market or industry demand for altered terms – e.g. for risk allocation – or in competitive offerings;
- identify repetitive areas of performance inefficiency or shortfall in commercial operations and drive remediation through improved terms, policies or related processes;
- be able to immediately analyse and report on the impact of market, geopolitical or regulatory events on contracts (buy or sell) and consequent effect on revenues or profit;
- identify and aggregate risk at both transactional and portfolio level (contract type, business unit, market segment etc) to support strategic business decisions;
- analyse the financial impact of term and condition variations, concessions and potential negotiated off-sets.
The good news? This data will elevate management’s perception of contracts and the contracting process, making it a critical source of strategic business information.
The bad news? The machines will eliminate many of today’s transactional and operational roles, leaving opportunities for those who are skilled at interpreting data, developing new ideas and approaches and undertaking impact assessments where judgment is required.
Tim Cummins will be a keynote speaker at the PASA CPO Summit in March. ‘Future Proofing You’ will be held on 13 & 14th March 2018 in Sydney.
Read more from Tim Cummins on the Committment Matters website.
Tim Cummins is CEO of the International Association for Contract & Commercial Management (IACCM), a non-profit organization that he founded in 1999. Read more here.