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CLM Value Is Driven By Enterprise Buy-In. Here’s How Legal Ops Can Get It

May 1, 2023 By Bernadette Bulacan

The stereotype of “contracts for legal, by legal” is natural; contracts are legal constructs, and as such, find their “home” in the legal department. Unfortunately, this limited view ignores the wide reach contracts have across the business. According to World Commerce & Contracting, 25% of an organization is involved in the contract management process—everyone from sales, to procurement, to finance and HR.
This is why the most enterprising and innovative legal operations professionals take an expansive approach to implementing contract lifecycle management technology (CLM). Surely, they are working tirelessly to leverage CLM to improve their department’s efficiency. But they are also embracing the opportunity to demonstrate the value of CLM beyond the four walls of the legal department. To paraphrase an inspirational quote that has launched many transformative initiatives: “Ask not what CLM can do for you (in the legal department), but what CLM can help you do for the entire organization.”

The Impact and Value of Integration 

So how can legal ops teams deploy a CLM so value can be realized across the entire enterprise? The key is integration, namely CLM into other enterprise systems.

Integrations are critical because they improve contract efficiency for both legal and non-legal users. In the same way that attorneys want to conduct their work in familiar tools (like Microsoft Word), a sales person will feel most comfortable initiating the contract process in their native Customer Relationship Management system. Integration can enable the business to self-service with legal-set guiderails, resulting in increased compliance while reducing the number of contracts requiring legal’s review.

CLM that is integrated into other enterprise systems also produces rich and robust data pools. For instance, organizations that integrate their CLM with Supply Relationship Management systems have been able to unearth data to identify and enter into new agreements with vendors who can better navigate supply chain disruptions.

Note, all of this assumes robust integrations. When evaluating a CLM platform, inquire about the provider’s experience with integrations across multiple enterprise systems. Determine whether the vendor is simply providing an API, or developing robust and seamless experiences between these enterprise systems.

Getting Started 

While enterprise-wide deployment and integrations are highly valuable, they can also be perceived as complex and daunting. This likely explains why, according to the latest LDO Survey, only 34% of organizations have integrated CLM into other enterprise systems. However, as noted above, contracts are an enterprise-wide asset, and failing to design a CLM system to match is a recipe for low adoption and muted value. 

The journey can start with a conversation. LDOs should conduct a listening tour in an effort to learn about the contracting pains and challenges experienced across the business. 

One legal operations director from a global medical technology enterprise shared that a key component of her rollout was identifying which integrations mattered to these departments. “No function was feeling as if this solution was being thrust upon them,” she observed. “They were part of the team bringing about this change. And, honestly, I believe they have pride in being part of the team that really transformed how our company does contracting today.”

Words to warm any legal operations leader’s heart.

To learn more about taking an enterprise-wide approach to contract intelligence, access the full LDO survey here.

Next Steps

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