Contracts make up the foundations of business, but companies must first effectively manage them from request to expiry. The good news is that Contract Lifecycle Management (CLM) software is designed to simplify this process!
But in an era where efficient contract lifecycle management is pivotal to organisational success, contract lifecycle management (CLM) Implementation is a process that requires strategic foresight and careful execution.
From how to prepare your organisation for a new CLM to the 10 factors you should. Consider when choosing CLM software, this guide will cover the basics of CLM and how to make the implementation a success.
What is Contract Lifecycle Management?
Contract Lifecycle Management (CLM) is a process that involves tracking and managing all aspects of a contract as it moves throughout the contract lifecycle. The process involves the systematic management of contracts from creation through to renewal to maximise overall compliance and opportunity while minimising the associated risk to ensure they’re effectively utilised throughout their lifespan.
Implementing a contract lifecycle management strategy is crucial for businesses seeking to maintain discipline in agreement management. A robust contract lifecycle management strategy can greatly benefit businesses by improving overall efficiency, reducing legal and financial risks and optimising the management of contractual relationships to enhance relationships.
How to prepare your business for a new CLM
CLM has gone from nice-to-have to a must-have, and any business that looks to be successful in today’s digital-first landscape needs a contract lifecycle management system in place. Yet, 77% of CLM projects resulted in failed technology implementation. Why? Contract lifecycle management tools are not plug-and-play systems. Any CLM implementation requires time, resources and careful planning.
However, you can improve your organisation's chances of success by focusing on this set of core elements.
Secure cross-department buy-in
Too often, companies will look to implement a CLM because they’ve heard some ballooned statistics about time savings. But the first step is to agree on a strategy. Identify the problems within the business that have led you to look for a CLM, then determine the goals you want to work towards and how a CLM will solve these problems. What’s the goal of implementing a CLM and how will you measure and track its effectiveness?
Have a vision! Every business has its own unique set of challenges, so success is unique. Establish the end goal of the project, what needs to be achieved before you can class it as a success.
Map out your existing end-to-end processes and then identify where the inefficiencies occur and why. Then, map out the most efficient journey that a contract can take. Establish the milestones that it needs to pass through before the implementation of the CLM tool can be regarded as a success.
Once you have finalised the new process, you can review and remediate your existing agreements and templates. CLM isn’t a silver bullet. If your current templates and processes are causing issues, simply uploading them to a CLM won’t fix them, it will make them worse!
The opportunities and benefits of implementing a CLM
CLM implementation is no easy job! Like any tech implementation, it requires time, planning, and budget. However, implementing a CLM system offers organisations a myriad of opportunities and benefits, making it a strategic asset for efficient operation and improved business outcomes.
To simplify this, we’ve listed the 4 most common benefits and opportunities of implementing a CLM.
CLM tools enhance compliance by ensuring contracts adhere to legal and regulatory requirements. They automate compliance tracking, provide alerts for critical dates, and maintain an audit trail. This reduces the risk of non-compliance, legal disputes, and associated costs, while also streamlining the reporting and monitoring processes.
Faster and improved revenue generation
CLM tools accelerate revenue generation by expediting the contract lifecycle, reducing time-to-sale, and optimising contract terms. They help identify cross-selling and up-selling opportunities, reduce revenue leakage, and ensure compliance, enhancing overall efficiency. Quicker sales cycles and improved contract management lead to faster revenue recognition and increased profitability.
Contract lifecycle management tools unlock hidden data, providing stakeholders with enhanced data to drive decisions. Analysing contract data enables stakeholders to identify patterns, risks and opportunities, allowing them to make business decisions based on risk.
Enhanced business efficiency
CLM tools enhance business efficiency by automating contract creation, approval workflows, and compliance tracking. They streamline contract lifecycles, reduce manual tasks, and provide centralised access to contract data, minimising errors, and delays. This leads to quicker decision-making, cost savings, and improved overall operational efficiency.
Manually creating a contract is time-consuming and prone to human error. By standardising the contract authoring process, businesses can ensure consistency and compliance while accelerating the contract lifecycle. Pre-approved templates and clauses allow for risk mitigation and compliance, allowing enterprises to quickly and seamlessly create contracts without legal intervention.
Summize uses Teams or Slack to help users create contracts in under 2 minutes without changing their working methods. The contextual Q&A provides real-time responses, building the document without legal intervention from the library of pre-approved templates and content.
Why CLM Implementations Fail
Implementing a contract lifecycle management tool can be a transformative process for organisations and when done right, it has the potential to yield significant cost savings and efficiency gains. But it comes with its set of challenges,
and with uptake on the rise, many businesses are finding themselves with a failed implementation.
Typically, speed, competing priorities or oversight of the project are the most common reasons for failed CLM implementation, but here are some of the most common pitfalls to avoid.
Resistance to Change
Employees may be accustomed to existing contract management practices, and introducing new technology can meet resistance. It's essential to communicate the benefits and provide adequate training to overcome this challenge. Summize embeds contract workflows into the tools you and your business use daily, such as Microsoft Word, Teams, Slack and Salesforce. This approach to CLM focuses on the end user, creating an experience that mirrors their current working habits to maximise adoption.
Contract management can be complex, particularly in organisations with intricate processes or diverse contract types. Adapting a CLM system to fit these complexities can be challenging, as it requires customisation which may be time-consuming and require manual input from resource across the business.
Lack of Use Case
Use cases help identify scenarios and processes where a CLM can be utilised to overcome any inefficiencies. But far too often, businesses overlook this stage. Without clear use cases, it's challenging to establish the project's objectives and scope. This can lead to vague project goals and confusion among project stakeholders resulting in a breakdown in collaboration.
At Summize, you’ll be supported by our experienced Implementation team who will work with you to establish your current processes, use cases, what success looks like and where Summize will best fit into your day-to-day workflow and prepare you to achieve value from one of our use cases, request, review or repository within 12 weeks
“The Customer Success and Implementation team at Summize has been fantastic. They were incredibly supportive in our onboarding and roll-out process and are always on hand to help us ensure we see real results”. Gemma Griffiths, Head of Operations for HCI UK&I at The HCI Group.
Read the full customer story here.