What's Happening?
The Commerce & Contract Management Institute (CCM Institute) has released a report indicating that 80% of organizations lack clear accountability for contracting performance, posing risks during periods
of uncertainty. The report, produced in collaboration with World Commerce & Contracting, NCMA, and Sirion, highlights the importance of technological advances in contracting processes. Despite increased investment in digital tools, many organizations still struggle with governance frameworks that define responsibility for contracting outcomes. The report emphasizes the growing role of AI in contracting, with over 80% of businesses expecting AI to play a major role in the next two years.
Why It's Important?
The findings underscore the critical need for businesses to establish clear accountability and leadership in contract management to navigate market uncertainties effectively. As AI becomes more integrated into contracting processes, organizations must address governance failures to leverage technology effectively. The report suggests that businesses with defined accountability and leadership structures are better equipped to handle market challenges, highlighting the importance of aligning technology investments with governance outcomes.
What's Next?
Organizations may need to reassess their contract management strategies, focusing on establishing clear accountability and leadership to improve operational performance. The report calls for immediate action to address structural vulnerabilities and urges leaders to prioritize commercial and contracting excellence. As AI continues to play a significant role in contracting, businesses may need to invest in talent development and adaptive leadership to ensure successful integration of AI technologies.
Beyond the Headlines
The report reveals a divide between buy-side and sell-side organizations, with suppliers outperforming buyers due to better leadership alignment and investment in contract lifecycle technologies. This gap highlights the need for businesses to focus on leadership quality and organizational design to improve contracting outcomes. The findings suggest that technology adoption alone is insufficient without defined accountability and leadership oversight.
