Maximizing Value in Source-to-Pay: Transforming Agreement Processes with CLM

Procurement teams today juggle a wide range of responsibilities, including risk management, supplier management, sourcing, purchasing, and compliance. At the heart of these tasks lies a common thread: they are all deeply influenced by the data and terms within agreements. However, one of the major challenges organizations are facing is locating up-to-date contract terms and statuses, often struggling to access the latest approved vendor agreements, leading to issues such as overpayments or missed milestones. Additionally, disconnected tools and fragmented processes often result in errors that lead to compliance challenges, augmenting the impact of inefficient contract management.

In a recent Docusign webinar, experts from Deloitte, SAP, and The Hackett Group highlighted contract management as a critical area of focus and discussed how Contract Lifecycle Management (CLM) streamlines procurement contracting and significantly enhances procurement workflows. The webinar also identified the common challenges in contract management, such as missed opportunities for value creation and risks from poor compliance and governance leading to inefficiencies and value loss, and how contract lifecycle management (CLM) improves efficiency, compliance, and visibility across the source-to-pay process. The webinar also explored best practices for integrating CLM systems into source-to-pay workflows for contract tracking, supplier relationship management, and overall process improvement.

Siloed contracting and a lack of visibility

Lack of visibility into contract details is one of the biggest contract management challenges that leads to value leakage. This creates challenges in matching agreements to compliance plans or realize cost savings and incentives hidden in contracts. Additionally, duplicate contracts, expired notifications, and inefficient processes further exacerbate the challenges faced by procurement teams.

Christopher Sawchuck, Principal and Global procurement Advisory Practice Leader at the Hackett Group emphasizes that technology-enabled contract lifecycle management (CLM) can significantly mitigate these issues. Sawchuck highlights, “Research shows that organizations with effective CLM systems realize substantial benefits. For instance, companies with $5–10 billion in revenue can save an average of $3.2 million through improved process efficiency, stemming from streamlined staff activities. Moreover, these organizations achieve 5X the cost savings compared to those without CLM capabilities, by addressing issues like missed savings opportunities.”

Cycle times is another key area that needs focus. Not having visibility into contract data—whether for individual agreements or across many agreements—slows down the contract authoring process significantly. Many organizations continue to suffer from siloed contracting processes and disjointed tools. Although CLM solutions are a step in the right direction, these tools are neither integrated effectively to allow seamless data flow nor do they unlock their full potential. For example, CRM systems are often poorly leveraged; they act as static repositories. This results in important functionality, such as workflow automation that could significantly enhance productivity, remaining untapped. As Sawchuck points out, the value of these tools is not just in cost savings or revenue growth but also in the invaluable time they save for teams. Time is a finite resource, and reclaiming it is crucial for driving innovation and enhancing team productivity.

Stakeholder challenges

Contract management requires collaboration across departments like legal, procurement, and sometimes others, depending on the organization’s structure. One of the biggest hurdles lies in defining ownership—whether it belongs to legal or procurement—echoing the long-standing divide between procurement and accounts payable. In mature organizations, these ambiguities are often resolved, paving the way for smoother adoption of Contract Lifecycle Management (CLM) systems by replacing disjointed processes with cohesive strategies.

Kami Paulsen, Managing Director at Deloitte emphasizes the importance of involving all relevant decision-makers and stakeholders early in the contract lifecycle management (CLM) process. Paulsen highlights, “Organizations often face challenges when contracting is handled in silos, making it difficult to align on tools and processes. The first step is securing buy-in from stakeholders and agreeing on strategic objectives, such as integrating systems, enhancing reporting and analytics, and defining the system’s desired outcomes. Once alignment is achieved, organizations can focus on tactical elements, such as analyzing procurement data, reviewing contract terms, and inventorying existing contracts and processes. This involves identifying the types of agreements to prioritize, understanding how teams interact with contracts, and envisioning the ideal processes and outcomes. Collaborating with experienced partners is crucial for strategizing and translating high-level goals into actionable steps.”

Achieving effective CLM demands a careful balance between overarching strategy and meticulous execution, supported by vendors and partners with deep industry expertise. As organizations navigate shifting regulations, diverse contract types, and innovations like AI that transform the contracting landscape, adaptability becomes crucial. Partners play an essential role in addressing these complexities, ensuring CLM solutions remain scalable and effective in the face of constant change.

Data as the cornerstone

When integrating a Contract Lifecycle Management (CLM) system with other systems of record, there are several key considerations to keep in mind. Technology, especially AI, is advancing rapidly, but AI’s effectiveness hinges on the quality and accessibility of data. For procurement teams to fully use CLM integrations, they must ensure that data flows seamlessly between systems. This requires a holistic view of how data is collected, linked, and used. Integration is not just about connecting systems—it is about enabling better decision-making through data. For instance, procurement professionals today need to navigate advanced tools and analytics, which makes data integration crucial. A well-connected ecosystem allows for deeper insights, such as identifying compliance gaps or mitigating regulatory risks, by enabling the interrogation and analysis of data.

Additionally, seamless data integration fosters collaboration across teams and stakeholders. By ensuring data consistency and harmonization, businesses can manage contracts more effectively—tracking clauses, ensuring compliance, and reducing risk—while aligning with broader organizational goals. This approach requires careful planning to ensure that technology not only supports but also enhances operational processes and outcomes.

Addressing contract management challenges with Docusign

Recognizing the challenges that procurement teams face, Docusign’s market leading CLM solution addresses the challenges procurement teams face in contract management, by automating processes, standardizing workflows, and integrating with other market-leading systems. It ensures accurate data handling from the start of a contract request, using pre-approved language and automatic routing based on set conditions. Additionally, the platform supports higher-value agreements through automated risk assessments and AI-driven tools that flag high-risk language. It also automates approvals and data extraction, sharing data across systems to minimize errors and improve agreement terms. Features like obligation management, reporting, reminders, and alerts further maximize the value of agreements, all within tools already familiar to organizations. Docusign recently introduced an integration with SAP Ariba, designed to enhance the procurement experience. This collaboration enables procurement teams to manage agreements directly within the Ariba interface, ensuring seamless data sharing and streamlined workflows. Users can create new supplier agreements, adjust third-party contracts, and update Ariba fields automatically as agreements progress. A standout feature is the intuitive, native user experience, which promotes better collaboration between legal and procurement teams.

Watch the full webinar here.