But what barriers stand in the way? UK companies in our study highlight four key hurdles:
- 62% of respondents said changing people’s way of working
- 41% of respondents note that they felt there was an inability to hire the right talent - particularly talent with technology and process management skills
- 29% of respondents mentioned that previous attempts at change fell short of expectations
- 21% of respondents said competing priorities take focus which resulted in a lack of time
It’s significant that the top challenges around contracting technology cited by respondents are “too much time spent identifying the right technology” and “technology doesn’t do what we need it to do”. With an abundance of technologies available, the reality is that successful transformation is less about what specific tools an organisation uses – and more about but how it uses them and what to achieve. Organisations should consider the transformation outcomes and the investment case with a focus on change management, adoption, talent and a process mindset, before setting out to identifying the optimal technology solution.
Giving the right work to the right people
Many contracting teams are managing very large volumes of contracts – up to 80 a day in some cases – and processing a complex contract costs an average of £35,000 and takes 288 hours of work. This heavy workload puts a severe strain both on the process and on the diverse array of talent involved.
A further issue is that this talent is currently not being applied in the most efficient or effective way: almost two-thirds of contracting professionals have regular contact with low-value contracts, and 91% of organisations cite challenges managing high volumes of low-complexity contracts, which can take time away from more important tasks. Also, giving skilled personnel large numbers of low-level, low-complexity contracts to work on can damage their morale. This may help to explain why 96% of respondents face challenges with contracting talent, and 37% cite staff retention difficulties.
The solution is to give the right work to the right people. Companies can engage and retain key contracting talent by using a range of operational models and external resources to optimise their workloads. Many are already doing this: almost four in five (78%) large companies on our study are using contracting centres of excellence, and 46% are considering co-sourcing parts of the contracting function to a third party. By using the right resource for each task, organisations can reduce risk, increase efficiency, cut costs and improve morale. To achieve these benefits, firms are using various types of external provider – notably law firms and the Big Four.
Mapping out the transformation journey
In summary, our UK research findings suggest that contracting teams should focus on four foundational building blocks for any successful transformation of the contracting process.
- Work out how to balance multiple stakeholders’ viewpoints – and decide who will play the lead role.
- Drive operational transformation by implementing standardisation and consistency end-to-end
- Pinpoint the organisational and technology challenges and focus in on them.
- Give the right work to the right people to boost effectiveness, efficiency and talent retention.
As with any transformation, the key to getting ahead in reinventing contracting is getting started. If your organisation hasn’t yet begun, you should recognise the need to focus on contracting and start putting the key building blocks in place. If you’re already underway, it may be about establishing clear ownership, be that in the legal, sales or procurement function, or elsewhere. Whilst it’s a shared journey, someone must be in the driving-seat. And the time to decide who that will be? It’s today.