According to a new report by The Aberdeen Group, “Contract Lifecycle Management: Views from Procurement, Sales, Finance and Legal,” 42 percent of corporate enterprises are being pressured to adopt contract lifecycle management (CLM) technology to mitigate risk, and 34 percent are using CLM to facilitate regulatory and reporting requirements. The independent research study sponsored in part by Selectica (NASDAQ:SLTC), a leading provider of enterprise contract lifecycle management (CLM) solutions, also shows that companies that adopt “best-in-class” CLM practices realize 85 percent of sales orders and revenue recognition compliant with contracts and 86 percent of purchasing transactions compliant with contracts, which is nearly twice the average of 45 and 39 percent, respectively.

“Globalization, rising supply risk, and increasing costs have driven organizations to place greater emphasis on establishing and managing their contractual relationships and obligations,” states Bill Browning, Research Analyst at Aberdeen Group. “Although each type of contract has some impact on the overall performance of a business, the effects of procurement and sales contracts are among the most immediate and tangible.”

According to the study, more than 40 percent of companies surveyed are turning to CLM technology to mitigate both internal and external risks. Best-in-class performers also are shown to be more likely to automate CLM processes, including analysis and reporting (74 percent), contract creation (44 percent), auditing (44 percent), electronic signatures (41 percent), negotiations (37 percent), proposal development (33 percent), and risk assessment (26 percent). Effective CLM practices also increase visibility for reporting and aids in meeting regulatory requirements, such as Sarbanes-Oxley, that require transparency into business relationships.

The Aberdeen study also demonstrates that best-in-class CLM performers share a number of key characteristics: they are 81 percent more likely to centralize management of contracts; they are 3.4 times more likely to establish visibility into contract data; and they are 2.4 times more likely to use contract management technology. In addition, best-in-class CLM enterprises are able to shorten execution time for both procurement contracts (19.7 days as opposed to 31.3 days on average) and sales contracts (16.6 days as opposed to 22.2. days on average), and the revenue lost due to poor sales contract management is 74 percent lower than demonstrated by average or poor performing enterprises.

In addition to being more likely to automate contract management, the best-in-class enterprises also share a number of key functions to drive success: 1) They are 90 percent more likely to use a central contract repository; 2) They search contracts using keywords 2.4 to 4.5 times more frequently; 3) Fifty-six percent use automated notification of key contract dates and events; and 4) They are three times as likely to use automated contract routing and approvals. Best-in-class CLM users also are proactive in performance management, and are 2.6 times more likely to generate reports and 3.4 times more likely to perform analyses to assess contract performance.

“It’s clear from the Aberdeen study that best-in-class CLM enterprises rely on best-of-breed contract management technology to automate best practices,” said Jason Stern, Vice President of Products and Business Development, Contract Management Solutions for Selectica. “Our Contract Performance Management platform delivers total control over contract creation and management including contract authoring, repository, analysis, and process management. With our CPM software, Selectica customers are seeing the same kinds of superior CLM performance results uncovered by The Aberdeen Group.”

The Aberdeen study was conducted among 180 companies regarding their CLM enterprise applications. The survey sampling represents companies from large enterprises ($1B US) to small businesses ($50M or less), mostly from North American companies (56 percent) as well as respondents in EMEA, Asia, and Central and South America. The study includes a cross-section of job titles (C-level, vice president, directors, etc.) and job functions (procurement/supply chain, finance, sales, business process management, etc.). It also represents a variety of industries, including finance, mining and oil production, technology, and manufacturing.

About Selectica, Inc.

Selectica (NasdaqGM:SLTC - News) provides its customers with software solutions that automate the complexities of enterprise contract management and sales configuration lifecycles. The company's high-performance solutions underlie and unify critical business functions including sourcing, procurement, governance, sales and revenue recognition. Selectica has been providing innovative, enterprise-class solutions for the world's largest companies for over 10 years and has generated substantial savings for its customers. Selectica customers represent leaders in manufacturing, technology, retail, healthcare and telecommunications, including: ABB, Ace Hardware, Bell Canada, Cisco, Covad Communications, General Electric, Hitachi, Juniper Networks, Levi Strauss & Co., Rockwell Automation, Tellabs, and 7-Eleven. Selectica is headquartered in San Jose, CA. For more information, visit the company's Web site at www.selectica.com.