Contract Automation Software

CLM excellence or long-standing processes: Why not both? 

Many clients often wonder whether it is necessary to re-engineer their existing processes before implementing cutting-edge Contract Lifecycle Management (CLM) technologies. They question whether it’s necessary to make extensive changes or if they can simply automate their processes as they are, especially if they already show promise. Interestingly, while consultants and CLM vendors often stress the importance of adhering to ‘best practices’, clients often struggle to follow this advice. They feel compelled to prioritize quick wins to demonstrate early successes to their internal stakeholders and secure further funding for their CLM initiatives. 

At its core, the recommended best practices or blueprints aim to standardize contract processes across different companies, regardless of their size or structure. This approach does make sense but only for routine tasks that can be easily measured. However, the inherent rigidity fails to accommodate the dynamic thinking and actions of individuals in a knowledge-driven economy. Moreover, hastily abandoning well-established processes also undermines the years of effort invested in perfecting them. 

The value of long-standing processes 

Take the case of a large healthtech company that had invested considerable time and effort into harmonizing and optimizing its contracting processes over the years. The company had successfully managed its legal workload, achieved good turnaround times, and fostered a collaborative environment where the sales and legal teams worked together effectively. However, the outbreak of COVID-19 presented a new challenge. 

Suddenly, the company found itself at the forefront of the battle against the pandemic, as lawmakers sought their assistance. Simultaneously, the company had to transition to remote work to prioritize the health and safety of its employees. While their existing contracting processes were effective, they needed to adapt them to the evolving circumstances using technology. 

Unfortunately, consultants and CLM vendors insisted on imposing their best practices onto the company. Despite some reservations, the company went along with the recommendations. After a lengthy 1.5-year implementation process and a significant investment in consulting hours, the “urgent” CLM system finally went live. However, the company soon realized that they couldn’t fully function within the confines of the system. Many essential tasks still had to be performed outside the CLM system, leading to inefficiencies and an overstaffed workforce. 

This client’s experience is not uncommon. While it is true that not all processes are suitable for replication, it is equally important not to hastily abandon well-established processes. Unfortunately, it is often the latter that contributes to the failures of CLM implementations. 

Navigating pitfalls 

As evident in the case above, it’s crucial to understand the tradeoffs when rethinking processes and evaluate how well the CLM vendor’s vision aligns with your own. It can be overwhelming, which brings us back to our initial goal of achieving quick wins. 

Starting small and focusing on quick wins not only allows you to showcase early successes to stakeholders but also minimizes risks and enhances effectiveness. Taking an incremental approach ensures that you make steady progress without overwhelming your organization or sacrificing long-term objectives. It also facilitates continuous learning that can be applied as you progress to new phases, making your journey smarter and faster. 

But what if a full-scale rollout is more suitable for your organization? In that case, it’s important to fully understand the impact a CLM system will have. Work closely with vendors to get a detailed understanding of what the future will look like in practical terms and thoroughly analyze your existing processes. 

This process will help you choose the right partners. Your CLM vendor should not merely be focused on selling a product. They should be committed to your long-term success, supporting you throughout your entire digital transformation journey. Look for vendors with deep expertise in contracting and a proven track record of successful enterprise-wide implementations. 

It’s crucial to recognize that CLM failures don’t necessarily stem from a failure to adapt or transform processes. Instead, they often result from a fundamental mismatch between your organization’s needs and the capabilities of the chosen CLM technology. Getting the fundamental alignment right will bring benefits beyond contract management. 

By navigating the potential pitfalls, understanding the impact, and making informed choices, companies can maximize the success of their CLM implementation. Balancing the power of CLM technologies with the value of their established processes sets the stage for a transformative journey towards greater efficiency, improved outcomes, and long-term success in contract management. 

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