Rapid payback and high return on investment (ROI)

Recent research by AMR Research in the US suggests that ECM implementations take two to three months-and achieve a 150% to 200% payback within one year.

Our experience bears out the speed and size of ROI. A large UK-based pensions, insurance and savings company currently planning an ECM implementation is expecting a likely gain of at least £800,000 in the first year for a spend of £40,000-and this doesn't even consider the benefits on the risk management side, which could well run into millions.

Vendors claim that for a medium to long length contract, clients can expect to save 1 - 4 man weeks by automating the whole process, and to reduce the elapsed time by 50%. Other claimed benefits are a 10-30% reduction in processing costs and a 30% increase in renewal revenue.

"[We predict savings of] £800,000 in the first year for a spend of £40,000."

Pensions, insurance and savings company, IT purchasing division

Goldman Sachs estimates the following improvements3 :

Area of financial impact	Measurement of Improvement
Compliance with regulatory guidelines	90-100%
Reduction of erroneous payments	75-90%
Faster contract negotiation cycle	50%
Increase in renewal revenue	30%
Reduction in "Quote to Cash" cycle (liberates working capital)	10-30%
Reduction in operating and processing costs	10-30%
Headcount reduction	10-20%
Additional contract revenue (enhanced reporting, prioritisation and performance)	1-2%

The benefits delivered by contract management software include:

● Encouraging staff adoption of best practice and enforcing compliance to corporate standards and regulations. Software makes it easier to follow the process than not follow it.

● Reducing financial and legal risks by providing better visibility and control: you know well in advance what will happen and why, and once it has happened you have an "audit trail". Automatic scheduling of tasks means that you will never miss a key contract event.

● Reducing contract cycle time by automating routine tasks, accelerating approval workflows and minimising legal department involvement.

● Increasing productivity and staff utilisation by providing immediate access to all relevant documents, with automatic version control and audit trail.

The evidence suggests that ECM delivers rapid payback and high return on investment (ROI).

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3 "Time to manage those contracts!"-Goldman Sachs