What's Happening?
A recent report by the Commerce & Contract Management Institute (CCM Institute) highlights a significant gap in contract accountability among businesses worldwide. The report, titled 'Benchmark Report
2025: The Race Is On - Navigating Uncertainty Through CCM Resilience,' reveals that 80% of organizations lack clear accountability for contracting performance, which exposes them to inefficiency and risk. Despite high levels of uncertainty reported by 87% of organizations, only a few have established governance frameworks to define responsibility for contracting outcomes. The report emphasizes the importance of technological advancements in contracting processes, noting that organizations with such advancements are better equipped to handle market uncertainties. However, it also points out that technology alone cannot resolve the governance crisis without defined accountability and leadership oversight.
Why It's Important?
The findings of the CCM Institute report underscore the critical need for businesses to address structural vulnerabilities in contract management. The lack of accountability in contracting processes can lead to inefficiencies and increased risks, particularly in times of uncertainty. As businesses increasingly rely on digital tools and automation, the report suggests that these technologies must be complemented by clear governance frameworks to be effective. The report also highlights the growing role of AI in contracting, with expectations that it will play a major role in the next two years. This shift towards AI-driven processes could transform contract management, but only if organizations establish clear accountability and leadership structures. The report calls for immediate action to address these foundational issues, which are essential for business resilience and performance.
What's Next?
The CCM Institute report calls for organizations to clarify ownership, strengthen leadership accountability, and align technology investments with measurable governance outcomes. It suggests adopting the globally recognized Contract Management Standard (CMS) as a framework to establish unified practices in contract management. As AI continues to play a larger role in contracting, businesses are encouraged to invest in talent development and adaptive leadership to navigate the AI-transformed future. The report indicates that organizations that prioritize these changes will be better positioned to thrive in the 'new normal' of business operations.
Beyond the Headlines
The report highlights a divide between buy-side and sell-side organizations, with suppliers outperforming buyers by more than 20% across performance metrics. This gap is attributed to differences in leadership alignment and organizational design, as well as investment levels in contract lifecycle technologies. The findings suggest that technology adoption alone is insufficient to close the capability gap, emphasizing the need for defined accountability and leadership oversight. The report also notes a decline in skepticism towards AI's role in contracting, indicating a shift in how businesses view technology's potential to enhance contract management processes.
