The absence of clear executive ownership has left contract management where finance was 30 years ago-with antiquated manual processes.

Administrative inefficiencies relate to workflow and access to information.

Workflow inefficiency results from not knowing that something must be done or by whom. Time spent creating contracts and resolving disputes incurs administration costs, opportunity costs, and a perception of poor customer service.

If a customer requires a change in the contract terms and it takes two months to get approval from the legal department, then the sale may be at risk. At best, this will cost the company two months' cashflow. At worst, the customer will pull out-or the salesman will remove mandatory clauses to clinch the deal.

Inefficiencies in access to information come down to where and how the contract is stored, creating problems in finding out what has happened so far and establishing the current status.

Storing paper contracts in a variety of locations makes it difficult to track down the contract and associated data, and can create problems over version control.

It is estimated that 10% of contracts across all industry sectors are lost2. Many companies say they regard this as inevitable, and that dealing with the consequences is simply a cost of doing business. They are wrong. This is a cost of poor business.

Finally, a concern repeatedly mentioned to us was dependence on individual employees. What happens when an employee leaves the firm? Is their personal flagging system lost? What happens to the audit trail? These questions need to be answered before they have to be asked.

"The scariest thing is that nobody knows exactly how much they lose with their manual contract management practices."

MEMBA

"We have seen organisations where an agreement which goes through 10 revisions is printed and archived more than a hundred times by different people. At the end no one knows which is the final draft. With e-mail the phenomenon is even worse."

MEMBA

We have found companies where it takes 6-8 weeks to sign a non-disclosure agreement. This means sales are delayed for two months, which in some businesses could be doubling working capital.