CLM ROI

Practical CLM 2023: Uncovering ROI

Let’s face it … no networking event for in-house legal professionals in 2022 has gone by without discussions on the topic of contract lifecycle management, or CLM. You might also have found yourself drawn to the enthusiastic feedback of a successful General Counsel. She implemented a CLM in late 2019 and it’s paid off, not only delivering automation benefits but also enabling a seamless transition to remote working. She underscores that while CLM implementations are undoubtedly a big transformation project, but, when weighed against the consequences of inaction, it’s a no-brainer.

But just as you are deciding to commit to a CLM yourself, you are reminded that your organization’s leadership will need something more concrete than a leap of faith and some form of qualitative argument to be convinced that CLM solution is a wise investment.

Can you imagine how easier it would be to demonstrate and measure the return on investment (ROI) if you could phase out your CLM implementation milestones around the business problems specific to your organization?

Introducing Impact First methodology

To help contracting leaders better identify the value in their contracts and follow through on unlocking it, we have embraced the Impact First methodology at smartContract in the pursuit of becoming a business partner to our clients to maximize the ROI throughout their CLM journey.

It means we’ll work with our customers to plan and deliver quick wins and define discrete milestones for their CLM journey that are relevant to their world. By offering this flexibility rather than applying ‘one-size-fits-all’ solutions in the name of best practices, we make it easier for stakeholders to consider the variables that they are familiar with and turn them into measurable KPIs that can be prioritized by value.

Take the example of one of our clients from the retail industry with over 10,000 employees in 13 countries. They elected to start slowly, leading with the migration of legacy paper documents to the contract repository and digitalizing only a couple of agreement types. As users started to use the system on a small scale, their knowledge of CLM built up strongly and tech-savvy employees from the procurement team became advocates for CLM after seeing firsthand how technology made contracting much more efficient and enjoyable. Next, they plan to standardize some major sell-side contract templates and automate their authorization workflow. Our client was able to demonstrate quick wins and the project continues to have consistent leadership engagement.

Following the Impact First methodology, we were not only able to address the known challenges for the client but also reveal several unarticulated needs which would have been overlooked by the rigid ‘best practices’ approach of looking only at benchmarking, processes, and systems landscape.

Why Impact First works

With Impact First, an organization can roll out CLM modules that address specific business bottlenecks, and therefore demonstrate ROI quickly while increasing the chances of success. First resolving the most critical problems also keeps the project in the news with management and also in the budget conversations.

Besides, Impact First also minimizes the risk associated with a CLM implementation by enabling agile decision-making. Contracting leaders can foresee problems with implementation and timely address them before the entire organization fully adopts the new technologies, reducing the risk of a failed implementation. There are also opportunities to adapt the roadmap, in line with any changes in business environment like supply chain disruptions or sudden inflation spike, making the organization more resilient while still maximizing the ROI.

This article is the last part of smartContract’s Practical Contracting 2023 series wherein each chapter focused on one of the most prominent challenges with CLM solutions today and how we’ve been able to overcome them for our clients. Previously, we explored the challenges of change management and digital maturity.

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