By Colin Levy, Director of Legal and Evangelist at Malbek.
If you were to Google ‘CLM solution’ today, you might be a bit overwhelmed by the results. The Malbek team is always the first to admit that the CLM market is a crowded one and a confusing one. The players are many, some of the valuations for some providers super high, and a mix of longstanding players and newer more modern ones that have a new, hot take on the contract problems so many of us have experienced over the last two decades.
So how do you go about separating the signal from the noise when you are on the hunt for a CLM solution?
Here are three best practices to support you and your organization in your search and selection of the right CLM solution for you.
#1 Measuring Value vs. Calculating Cost
Budget is often one of the largest barriers to any organization in the market for a new enterprise solution.
Because of this, many stakeholders start by researching average pricing and overall cost. I recommend going about it a different way.
Instead of focusing on cost and cost alone, focus on the ROI. What is the cost of doing nothing versus the benefit and long-term return on investing in your and your company’s future.
Take the current state of our economy as an example. Many organizations are already preparing for budget cuts and resource restructuring. So adding one more thing to your technology wish list at this time may seem out of reach. However, a CLM solution is one of the few tools that can actually help you identify where revenue is being eroded and potentially recovered.
Start by developing a business case for your CLM solution that answers the following questions:
- What business initiatives will a CLM solution support?
- Which processes and time-consuming tasks will it replace?
- Who will be positively impacted by the automation of these tasks?
- How will we measure CLM value? (Contract cycle time, revenue leakage, etc.)
The truth is, where there is a compelling need, there is almost always a budget for it—especially when there is evidence that the tool will help your organization do more without needing to increase headcount.
#2 Industry Valuation vs. Customer Validation
It seems like there’s always a new legal tech company receiving more funding and CLM vendors are no exception.
For a long time, industry hype and sky-high valuations were influencing software buying decisions.
Many individuals think, “I’ve seen them in the news. They seem to be getting a lot of investment, so they must be the best! Right?” Not quite.
Let me break down what a valuation really means.
A valuation is simply an estimation of a company’s worth. And too often, companies touting their unicorn status aren’t providing their buyers and users with what really matters to them – customer validation.
Here are a few ways you can investigate customer satisfaction during your CLM selection process:
– Request and schedule a customer reference call (or multiple calls) so you can talk to real customers about their experience.
– Read user reviews and look for badges or certifications that validate a solution’s strengths.
– Watch and read customer testimonials and case studies to get a sense of the kinds of problems that have been solved with that specific solution.
Sure, a CLM solution might be attractive to investors, but make sure you hear how impactful it is for the customers it was designed to support, too. The key is finding the right tool for your needs.
#3 Intuitive vs. Collaborative
A lot of solutions are described as intuitive.
This is by no means a bad thing, but it’s time for us all to realize that a solution that is only intuitive is doing the bare minimum. When the CLM category was first created, contract management fell mainly on Legal teams. Today, it’s understood by many that contract management is a team sport, and almost every team within an organization interacts with contracts at some point in their day.
Whether it’s sales requesting or drafting a new contract to move a deal through the pipeline, a procurement leader managing supplier agreements and analyzing spending, or a finance leader tracking on-time payments and pricing changes, without a doubt contracts underlie so much of how a business operates.
While searching for the perfect CLM solution, keep collaboration at the forefront.
- Will this CLM solution lighten the contract management burden on Legal?
- Will it accelerate deal velocity and contract drafting processes for Sales?
- Will it support Procurement in standardizing supplier agreements?
- Will it track important events and obligations and notify the correct stakeholders?
- Will it seamlessly integrate with existing business systems?
- Will it improve contract visibility across teams?
In a user-first world, intuitive systems are a must. Collaboration and specifically systems that enable closer collaboration unite the enterprise, and that’s one thing that will make a big impact in improving contract management processes.
Ready to take the next step on your CLM journey but aren’t sure where to begin?
Take Malbek’s CLM Value Assessment. It will ask you a few questions about the people, processes, and technology involved in contract management at your company. Your responses will lead to a customized report automatically sent you that will provide key considerations and helpful resources to get started.
[ Artificial Lawyer is proud to bring you this sponsored thought leadership article by Malbek. ]