The Information Technology industry has enjoyed explosive growth for a number of years. According to research cited by CompTIA, the IT industry exceeded $4.5 trillion globally in 2017 and will exceed $4.8 trillion in 2018. Yearly growth of 5 percent is expected, but could be as high as 7 percent. The United States accounts for 31 percent of this total, representing the world’s largest technology market, in which the majority of tech spending occurs at the governmental and corporate level.
But while these trends are promising, the industry also faces challenges. As with all businesses, management in the IT industry seeks to chart a course that maximizes income and limits expenses. IT companies also seek to promote efficiency and gain competitive advantage wherever possible. In this article, we will review some trends in the IT sector and discuss the need for IT contract management software.
The Need for IT Contract Management Software
According to an International Association for Contract and Commercial Management (IACCM) article discussing fiscal management and revenue recognition, Global 1000 corporations maintain more than 40,000 active contracts on average. Not only is this a massive number, but it is expected to rise in the future as the use of contracts continues to grow.
In addition to this continued growth in contracting rates, contracts are expected to continue to become more complicated. The IACCM article further notes that contract management solutions are particularly important in industries such as software and high-tech, due to the complexity of the industry’s agreements, including the use of multi-element contracts. Finally, citing Aberdeen Group research, the article concludes that poor contract management by large companies led to an average revenue loss of five to nine percent. These facts magnify the need for technological solutions, such as IT contract management software.
Increased IT Spending Will Exacerbate the Need for Contract Management Solutions
With a strong economy expected to continue in the United States well into the future, industry experts estimate that companies of all sizes are expected to maintain and even increase IT spending. Naturally, all IT companies would be expected to seek to get their fair share of all this spending. According to Deloitte, companies within the IT industry will pursue a variety of approaches in the near term to meet the needs of customers, including:
- In addition to traditional efforts to obtain businesses, many competitors will actually cooperate with one another due to the complexity of the technology and the level of expertise needed. This strategy eliminates the need to have experts in every single area of technological specialty.
- Companies will also look to mergers and acquisitions. This provides additional business, as well as the additional technology and human assets from the acquired company.
Whether a company enters into cooperation arrangements with competitors, mergers, or simply takes on more customers, the increased complexity of contracts is obvious. All of the company’s agreements must be carefully monitored. An important role in contract management is monitoring the company’s contracts to ensure that contracting partners live up to the terms of their bargains; that the company performs on time as agreed; and that the company’s contracts reduce risks and protect the company’s assets to the greatest extent possible.
Some contracts even state that IT contracts in a company are more likely to auto-renew than other agreements, which can be dangerous when it comes to unintended expenses.
ContractSafe – A perfect Contract Management Solution for the IT Industry
Everything points to massive growth in the numbers of contracts IT companies will need to manage. To boost efficiency, it’s important that employees are not wasting their time searching through filing cabinets, desk drawers, storage rooms, or hard drives and shared drives in order to find an important contract.
ContractSafe’s contract management solutions have a ton of easy-to-implement and easy-to-use features which meet all of these needs. All documents are maintained in one safe place, and automated email reminders can be set for all important contract dates, eliminating the fear of unwanted auto-renewal of contracts.Additionally, contracts are easily monitored to ensure all parties are meeting their obligations, and to ensure that all compliance issues are handled properly. This is particularly important in the IT industry. Contract templates with approved language can be stored for re-use in the future, which allows drafters to better address risk-shifting issues. Plus, with ContractSafe [AI]ssistant, artificial intelligence technology provides automatic data extraction and can automatically set contracts up for you. And best of all, it’s all done at an affordable price! Start your free trial today!