If you’ll spend two minutes reading this article, I’ll help you boost your CLM user adoption by as much as 45%. How, you ask? Simple: By avoiding some basic but common mistakes that place implementations at risk.
Through a decade of implementations, we’ve discovered a few simple “Do’s and Don’ts” that consistently drive attractive ROI and user adoption regardless of organization size, needs, market sector, previous expertise with CLM, or regulatory requirements. I’d like to share those with you.
Ready? Great! Let’s dive in.
|Do adopt lean business practices in your CLM implementation. Do iterate your way to success.||Don’t take a “big bang” approach to your implementation.|
It’s tempting to aim for a unified contracting process throughout the organization from the outset. Unfortunately, comprehensive implementations often require organizations to run two systems in parallel for 6-12 months, exasperating users whose priorities are often tied to their business units’ immediate concerns and priorities.
Instead, opt for bite-sized phases to an implementation, each with a unique set of expected, quantifiable performance indicators. Then drive your phases to meet or exceed each phase’s desired result. Iterative implementations of this sort often provide ROI benefits in as little as eight weeks, and can prevent potentially going over budget.
|Do ask pertinent questions of stakeholders to encourage a sense of ownership across the organization.||Don’t view CLM implementation as the sole responsibility of legal or IT.|
According to Gartner, up to 80% of business transactions are governed by contracts, and over 50% of Fortune 1000 organizations spend over $1 million annually on contract arbitration and litigation. Those costs are the quantifiable result of poor insight into contract terms.
Prior to implementing a CLM system, ask questions that drive stakeholder ownership across the organization. For example, does finance need to automate revenue recognition from signed contracts? Are we extending a supplier net 90 terms on a purchase from us, while the supplier insists on getting paid net 30? How does production quality control obtain contract visibility to ensure our production process complies with local sourcing or diversity requirements stipulated in the contract? Asking these questions will drive interest and ownership into contract analytics.
|Do implement solutions to address current business unit needs, but keep your options open for growth.||Don’t back your organization into a corner by implementing a CLM vendor dependent on a specific CRM or ERP package.|
It’s seductive to select a CLM vendor based on the extent the vendor is tied into or built on top of a specific CRM or ERP system currently in place; however, beware the myriad hidden costs. For example, lack of enterprise scale can drive other business units to develop their own CLM systems, leading to poor visibility due to fragmentation of contract data. Worse still, if a current CRM or ERP system is replaced, the organization is left without a solution (or a costly manual one).
Instead, ask the hard questions of your vendor to ensure your organization will meet your current needs, but allow your organization room to grow. At a minimum, ask your vendor whether or not their CLM solution would still support your organization if the current CRM or ERP system is replaced (without running two CRM or ERP systems). Also, ask whether CLM updates or upgrades can be scheduled separate from CRM or ERP downtime, in order to make updates as painless as possible for users.
The key to getting maximum value from a CLM investment is for your team to take a lean approach, gain stakeholder buy-in early and validate that the solution will solve business problems. The sooner they buy-in on the process, the sooner you can seek out opportunities from your contracts, manage compliance and to avoid risks. Contact us to learn how we can help your team get up to speed and to attain your contract management goals.
Join our webinar on April 28th at 1PM EDT featuring Tim Cummins from IACCM. You’ll walk away with practical tips on driving better contract governance with contract workflow. Register now for the live event.