In a new white paper, entitled The Contract Maturity Model: From One-Off Contracting to Contract Portfolio Management, author Kingsley Martin, the President and CEO of KM Standards, examines how automated contracting is evolving to meet the needs of modern business. The paper discusses i) the major drivers of change and predict future stages of automated contract development; ii) the future of automated contracting platforms and the technology systems designed to streamline contracting tasks; and iii) content systems — namely, contract provisions and clauses that comprise the building blocks of automated contracting agreements.
Martin explains how contracts are the “language of business” and document our business relationships. He notes that contracts are financial instruments that control the exchange of trillions of dollars of assets, goods and services.
However, Martin points out, the process of drafting and managing legal agreements has changed little over the centuries. “The scribes that first drafted precedents in 1392 at the Worshipful Society of Scriveners would recognize the contemporary practice of marking up the last, closest draft to the needs of the current transaction, albeit with a keyboard and not a quill,” Martin says.
Over the next few years, applications will likely evolve from point solutions — automating particular tasks — to fully integrated platforms enabling a contract automation assembly line, orchestrating all phases of the contract lifecycle. The overall trend is to introduce more standardized procedures and then to integrate such standards across all systems both internal and external.
Today the majority of contract tasks are performed by professionals with limited application of technology. Over time, this pattern is likely to reverse with more tasks handled by standard procedures and fewer tasks performed by skilled individuals. …[T]he trendline portends a decreasing percentage of tasks will be performed by professionals in a one-off manner and an increasing percentage performed by technology and systems. [And one can see] the evolution in three main trend lines: workflow processes; data capture; and application tools.