If you have decided to take the Contract Lifecycle Management (CLM) plunge, you are in good company. Businesses of all sizes and from all industries are turning to modern contract management software systems to transform contracts from static documents into strategic advantages. Embracing an AI-powered platform means that you could save your company millions. And your timing could not be better as Gartner estimates contract negotiations will become 30% faster by 2023 due to new contract management technologies.
But before you dive in, it is important to get ready for the road ahead. To ensure that your implementation is a success, some essential preparations must be made. Here are four steps you can take to lay the groundwork for a successful contract management system.
Build Your Dream Team
First, it is important to recognize that contracting is a team sport, and the initial step in laying the groundwork is to build a CLM selection dream team. A dream team consists of stakeholders from across the organization who represent different divisions and geographies. Ideally, stakeholders from sales, procurement, legal, IT, and finance will all be included. Each should bring inputs on what their teams will need for the software to be of use to them.
This will not only help your company chose the best solution for the organization but provide a roster of champions who can encourage adoption and help take contract intelligence to the next level. Remember, the more buy-in you secure early in the process, the more buy-in you’ll have years down the line as the company scales its contract management capabilities.
Map Your Processes
Next, map your existing contract processes before you begin the implementation, so you clearly understand what improvements you want to undertake and how an upgraded CLM system will impact your workflows. This step allows you to look at things like which processes are manual, which include third-party data, and which utilize some form of software.
By mapping your processes, you can evaluate the cost-benefit analysis of applying CLM to various areas of the business. While every contract process can be improved through digital transformation, the effort and payoff for doing so can vary. Your company may have some complicated, low-volume contracting processes, and you may find that in these areas it is best to hold off on implementing CLM immediately. On the flip side, mapping your contracting processes will most certainly reveal workflows that will quickly and significantly benefit from a contract intelligence system. Finally, understanding your current processes will help you with the next two critical steps: defining your KPIs and setting expectations.
Define Your Goals and KPIs
Once you’ve done the work to fully map your contract processes, the next step is to clearly define what you want your initial implementation to look like. Benchmark key performance indicators and set goals for the improvements you want to achieve. Contract volumes, request-to-execution turnaround time, the number of contract templates in a library (often, a plethora of templates is a sign of an inefficient template library), and risk (e.g. standard clause variance) are common KPI buckets. Also consider post-execution metrics, like contract performance; a robust obligations management system can help you manage and track this.
One way I like to think about it is—if it gets measured, it gets done. With identified goals, reporting improvements in key contract management areas becomes easier and more productive, and helps build confidence in the solution for future buy-in.
Finally, understand that your contracting processes will not change overnight. The last step in preparing for deployment is expectation setting. To do this, implementation teams should create stages that offer milestones and waymarks for the CLM journey for the entire organization. These targets should be easily defined, realistic, and communicated to all stakeholders and members of the dream team. Leverage the connections you’ve made across the company to take learnings and track progress at each stage, so you can maintain and build momentum behind your project.
Celebrate early wins. We’ve had customers who start out by using our software to rationalize template libraries and are now leveraging AI to extract data from tens of thousands of legacy contracts. Early success drives toward long-term value.
CLM can be incredibly transformative for your business. Taking all the necessary steps along the way, even before implementation begins, builds important buy-in from the organization, sets you up to demonstrate early value for the project, and produces internal champions for the system.
Want to learn more? Read our eBook: “Think Big, Start Smart, Scale Fast: A Quick-Start Guide to Ensuring a Successful Launch of Your CLM System.”