By Colin Levy, Director of Legal and Evangelist at Malbek.
In a world where many CLM features have simply become the starting point, often a solution provider’s largest competitive advantage is the speed and effectiveness of its implementation process.
What organizations want is a partner, not just a platform, who will be by their side to guide them on the path to sustainable value and ROI. Yet selecting a new enterprise solution can be daunting, however many times your team has done it. After speaking to customers about their experiences in leading and supporting a successful CLM implementation, we’ve rounded up four best practices to help organizations assess their readiness for a CLM solution and, in doing so, set their teams up for success.
STEP 1: ASSEMBLE A CLM LAUNCH TEAM OF CROSS-FUNCTIONAL STAKEHOLDERS
One frequent mistake we see with software implementations is the failure to involve key stakeholders early and often as decisions are being made.
When decisions are made independently without engaging all relevant stakeholders, organizations run the risk of proceeding with an incomplete understanding of the specific problems the new CLM solution is intended to solve. They also may miss what the ideal outcome for all teams looks like and which teams the change will impact.
To avoid creating this gap, start by identifying the 1-2 stakeholders from each team that is involved in contract management to participate.
Here are some teams to consider including and what each team might be looking to gain from a CLM solution:
- Legal + Legal Operations: Together, these teams areoften at the center of all contract activity. Yet they often lack the resources to keep up with growing contract demands and the contract data needed to make informed business decisions.
- A CLM solution will help Legal & Legal Ops streamline administrative contracting tasks and improve workflows.
- Sales: Sales teams are most concerned with deal velocity, which is impacted by inconsistent, unreliable, or cumbersome contract management processes.
- A CLM solution provides Sales with visibility into a contract’s status with tools and processes that reduce the need for Legal involvement.
- Procurement: Procurement teams are often put in a contracting bind due to the intake and manual review of third-party agreements that can expose the organization to risk.
- A CLM solution will help Procurement standardize and expedite third-party paper reviews.
- Other teams we often see involved include Finance and Operations, but there may be others.
- Evaluate your organization’s structure and current workflows to determine who will be impacted by the CLM selection and the level of involvement needed from each team.
STEP 2: ASSESS CURRENT PROCESSES & DEFINE DESIRED ONES
When it comes to processes, it’s important to evaluate the processes you currently use to manage contracts. Engaging in this work first means you understand your current reality and can help establish realistic expectations about what needs to be improved with technology. Too often, there are unrealistic expectations that technology alone will improve your contracting, but without a clear understanding of the lay of the land, a technological solution could automate existing flawed processes.
Start by asking (and answering) these questions:
- Which current processes are working well (and why) for your team(s)?
- Which current processes (and why) are causing friction?
- Which tasks are burdening your team(s) because of a lack of processes?
- What bottlenecks exist between your contract management stakeholders?
- What metrics are being tracked (or should be tracked) to measure contract management efficiency?
- What does a “good” outcome look like? (Helpful Hint: Define it through the lens of people, process, and technology working in unison.)
Too often, organizations start evaluating solutions without understanding their current state and defining what an ideal future state should look like assisted by a CLM solution.
Answering the questions above will help you filter out the noise and focus on the data you need to drive your evaluation and decision-making process.
STEP 3: DOCUMENT FUNCTIONAL & TECHNICAL REQUIREMENTS
While step two is more about looking at your CLM initiative from a high level, you’ll need to work with internal subject matter experts to capture the specific requirements needed to complete step three.
Gathering a list of requirements at this stage will help you prepare your CLM RFP and determine the objective and scope of your search.
Here are five focus areas to guide your documentation process:
- Product: What features and integrations are must-haves?
- Implementation: What kind of implementation timeline is your team comfortable with? Will you need to migrate your legacy contracts at the time of implementation?
- Support: What kind of support resources will your organization require? Do your teams need access to self-service training?
- Technology/Security: What are your organization’s data privacy and security requirements? What functionality needs to be configurable by an end-user or admin?
- Pricing: What kind of licensing model would best support your team(s)?
STEP 4: BUILD A COMPREHENSIVE BUSINESS CASE
Once you’ve identified stakeholders and the contract management pain points they are experiencing, it’s now time to define your success criteria by answering these two questions:
- What does success look like for each team involved?
- How does success align with the overall goals and initiatives in your organization?
The answers will serve as the basis for building a project charter that highlights the risks of not moving forward with a CLM solution. This charter should communicate a solid sense of how you will solve the problems you’ve uncovered.
Here are a few guiding questions we see a lot of organizations using as the foundation for building a CLM business case:
- Reducing Cycle Time – How many days could you recover by automating the contract intake process, avoiding redundant approvals, reducing negotiation back and forth, and driving overall contract efficiency?
- Increased Visibility to Status – What could be gained by accessing a contract from anywhere while working remotely? How much time is currently spent searching for signed contracts or trying to find where they’re stuck in the approval process? What about all the time spent emailing back and forth between stakeholders?
- Appropriate Legal Involvement – How much time is spent by Legal reading through pages and pages of contracts each time when processing new requests? What percentage of your contracts could be self-service with pre-approved language from Legal? How much time would this give back to Legal?
- Risk Avoidance and Standardization – What risks are posed by signed contracts with non-standard language? Can you track when high-risk language is included in a contract or quantify the number of high-risk terms appearing in contracts in total?
- Net Promoter Score (NPS) – What impact does slow contracting have on satisfaction ratings from your own employees as well as clients and suppliers?
I hope these best practices will help you and your organization as you prepare to launch your CLM initiative.
For more information, I invite you to download our guide, Building a Business Case for CLM, where you’ll find additional resources to support you in this process.
[ Artificial Lawyer is proud to bring you this sponsored thought leadership article by Malbek. ]