New Year Insights for the procurement solutions and services marketplace 2023: KPMG

For several years now, Spend Matters has been collecting and publishing a series of articles about predictions and insights on procurement, supply and services trends for the year ahead from expert tech and service providers in the market.

This year is no different as we’ve framed the subject around “insights,” highlighting providers’ observations from the year they’ve left behind and how they see these observations shaping the year ahead.

This series will run from mid-December to mid-January, then our analyst Bertrand Maltaverne will wrap up with his own take on the key themes that emerge.

In no order of preference, other than by the date they dropped into our digital letterbox, today let’s hear from Dipan Karumsi of KPMG, a procurement advisory specialist.

Momentum building in contract management

Through the pandemic, and leading into 2023, organizations have seen a marked increase in the number of contract-related data inquiries. Leaders sought to assess possible risk exposure, where contracts are and aren’t delivering value, and how contract leakage may be affecting the bottom line. Organizations are realizing that underinvestment in modern contract management capabilities have led to significant challenges in answering simple but important questions needed to drive timely, critical business decisions such as termination rights, indemnities and minimum order quantities.

As we look to 2023 and beyond, we see tremendous momentum building in the contract management space. A number of organizations have already made good progress via tactical contract management capabilities within source-to-pay solutions and thus have benefited from a centralized storage of executed contracts with visibility into some key metadata fields like expiration dates, contract values and rebate thresholds. However, more needs to be done to allow for access to contract metadata and terms needed to actively manage complex third-party relationships and protect the bottom line.

New digital CLM platforms are filling this need armed with advanced analytics and artificial intelligence. As a result, contract management itself has evolved from a document management capability within a given function into a strategic capability across the enterprise. As the remit broadens, organizations are quickly assessing how they use this ‘source of truth’ to better collaborate across functions to drive efficiency and effectiveness, including:

• Integrated buy-side, sell-side and enterprise contract management: Getting all contracts and workflows across the organization into one tool for optimized visibility and execution
• Contract performance management: Advanced monitoring of obligations and metrics to deliver on commercial value commitments
• Third-party risk management (TPRM): Integrated TPRM to manage supplier risk prior to and during a supplier relationship
• M&A enablement: Advanced contract analysis to quickly evaluate acquisition synergy savings and divestiture risks
• Regulatory compliance (LIBOR, etc.): Quickly assess and respond to risks associated with regulatory changes

As we look forward, we will be helping organizations to understand how strategically delivering enterprise contract management will help manage risk exposure, drive revenue enhancement, push cost reduction and increase compliance value. As organizations evaluate how to move forward with next-generation contracting capabilities it will be important to push the boundaries on the scope of contracts managed and to transform from document-focused to process- and insight-focused contracting.

Thanks to KPMG for being a part of the series.

Look out for more Spend Matters Insights for the year ahead over the coming weeks.

If you need to find the right procurement technology and provider for your business needs next year, Spend Matters “Procurement Technology Buyer’s Guide” and TechMatch  can help.

For granular analysis and comparisons of procurement technology solutions, subscribe to Spend Matters PRO.

And if you are looking for procurement services providers to help you with your 2023 decisions, look no further than our Procurement Services Market Landscape Directory.