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More than a legal necessity, contracts have a significant impact on many business performance metrics. Yet a large chasm exists between the filing cabinets which store paper-contracts and the operational activities which drive top- and bottom-line performance of any business. Accordingly, there is a burgeoning need for contract management systems which fill this void.
It is estimated that a typical Fortune 1000 company has somewhere between 20,000 to 40,000 active contracts in place. In the vast majority of cases, the processing (creation, storage, dissemination, execution, etc.) of the contract is completely manual, and the only authoritative copy of the contract is a paper-based version stored in a filing cabinet. In the best cases, an enterprise may leverage existing tools and applications to fill critical holes. Some use document management systems to serve as a repository for text contracts, others use spreadsheets to store key contract terms, or calendaring systems to program key date events. Unfortunately, these approaches lead to a host of fundamental limitations – they do not support the needs of constituents across the enterprise, and cannot interact with other enterprise systems. For these reasons, enterprise contract management (ECM) systems are receiving increased attention.
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