As in-house legal departments come under growing pressure to increase efficiency while keeping a tight grip on risk, they are increasingly considering deploying contract lifecycle management (CLM) solutions to support them in their work. Other business units such as sales and procurement could also benefit from such solutions — though in different ways.
The capabilities of a well-designed CLM solution are extensive. From centralising the organisation of documents, to gleaning insights from data, automating processes, shortening deal times, and improving oversight of the contract portfolio, the opportunity to deliver value is great. But in order to realise the benefits, it’s essential to plan your project carefully right at the very start – before you even go out to tender on a solution.
So, what are the best practices and key considerations for a successful implementation? What are the common challenges and pitfalls to avoid? And how can you measure the effectiveness of your CLM solution and ensure you’re achieving your desired outcomes? A recent webinar provided much food for thought, including:
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Identify the different drivers and where the potential value lies |
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Engage and align the appropriate people |
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Evaluate your existing processes |
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Start with what’s simple and most impactful |
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See it as a journey |
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Keep track of the value proposition |
Identify the different drivers and where the potential value lies
The overall success of a CLM project ultimately hinges on the co-operation of a variety of stakeholder groups, each with their own specific motivations and needs. For the legal team, the priority is often managing risk and compliance while speeding up turnaround times in order to be more responsive to the business. Sales teams may want greater flexibility to deal with changes quickly in order to shorten the time to close deals and maximise revenue. For procurements teams, the focus is likely to be on achieving cost savings by gaining better visibility over rates while maintaining service quality from suppliers.
You need to understand these different drivers, so you can strike the right balance when setting objectives around what you want to achieve from your CLM implementation. This will also help ensure that you choose a solution with the right capability set to match your goals.
Engage and align the appropriate people
Therefore, working closely and collaboratively with these different stakeholders is clearly vital, so you’re all pulling in the same direction to get what you want out of the project.
This is a key part of a broader people piece, whereby it’s vital to get the right individuals/teams on board and support them with – as well as getting their support on – the project. That includes:
- Building a strong business case and getting buy-in from company leadership.
- Engaging with potential users of the technology. This requires identifying who they are, what their role is, and what their needs are, evaluating their current ways of working and how they will be affected by the new processes, setting expectations, communicating clearly, and managing resistance to change.
- Working with others who may be involved in the implementation, such as the IT team or internal project management personnel.
“The people element is so crucial,” said Gordon Williams, Director – Consulting at legal tech consultancy Syke (now known as Consilio Advisory). “It’s [about] getting everyone together on the same page in terms of where the value of the CLM solution is and understanding that change curve across those different groups.”
Evaluate your existing processes
If your existing processes are ineffective or ill-defined, you’ll find you run into trouble when you implement a CLM solution, and you won’t generate the value from the tool as quickly. For example, do you have a clear delegation of authority schedule so that you can automate contract signatures?
It’s worth taking the time to check over how previous agreements have been handled, to work out which parts of the process should be replicated when using the new tool, and which elements can (and should) be eliminated.
Start with what’s simple and most impactful
A CLM solution may offer a wealth of possibilities, but it’s important not to overcomplicate things at the outset. Focus first on the ‘low-hanging fruit’. Take templates for example. Prioritising the more straightforward agreements or the most-used templates first such as terms and conditions or non-disclosure agreements (NDAs) often makes sense. Since these tend to be very standardised, this approach allows users to get experience with the new technology and processes without too much complexity being involved.
See it as a journey
A CLM project should be an iterative process, where the functionality and opportunities on offer can be rolled out over time.
“We can look at optimising contract lifecycle as a progression, and not everybody follows the same path. They can start at various points in the lifecycle depending on their particular issues.”
– Kirsten Maslen, Director, Product Marketing at Thomson Reuters
Don’t do everything at once, be aware of what’s involved and give yourself enough time to do it properly. Williams warns, “I see a lot of legal teams, especially smaller teams, try and take this on as a bit of a task alongside their BAU [business as usual] effort. That’s a concern because it takes a lot of effort to implement one of these platforms.”
Also, think about ownership post-delivery. The project doesn’t simply stop once it goes live, and someone will need to take on responsibility for driving it forward on an on-going basis if the organisation is to reap greater rewards in the future.
Keep track of the value proposition
Return on investment (ROI) can be measured in different ways, including hard metrics (such as time taken to complete contracts) and soft metrics (e.g. how responsive and confident the legal team feels), and it will vary depending on volumes, complexity and how the CLM solution is used.
Maslen points out, “You need to an understanding of what your current timescales are, what your current SLAs are, to be able to benchmark. But the point is that different benefits will arise throughout the project lifecycle.”
The success of your project, once you go live, depends heavily on the amount of preparation you put in at the very earliest stages to understand your needs, define your goals, evaluate the existing status quo, and set the stage for change. This will ensure you select the right solution and are well-positioned to optimise your CLM implementation.
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Discover more about how CLM solutions could benefit your organisation. |
