CLM Implementation: Essential Preparatory Measures for Success

1. Building a cross-functional CLM team: PwC reveals that critical stakeholders had not been aligned in most cases of CLM implementation failure. Hence, the team overseeing CLM implementation should be cross-functional with members from different departments like technology, business, legal, commercial, etc. Collective accountability and timely communication must be undertaken with an overarching system of governance in place so that roles and responsibilities are performed precisely.
2. Assessing organizational needs and goals: For the CLM solution to be tailored to an organization, a cross-functional team must evaluate the company’s technological landscape, policy structure, and the diverse pain points of the current contract management processes. A detailed understanding of the use cases and business requirements from stakeholders is essential so that critical objectives and, consequently, a roadmap and criteria for measuring success may be defined.
3. Conducting a comprehensive contract audit: Timely and consistent audits are vital to ensuring the success of a CLM solution as they allow the organization to identify gaps and pain points within the current process. An intensive audit of different types of existing agreements and master data will enable the team to analyze critical factors like compliance with policy updates, appropriateness of contract documentation, etc. They also gauge the effectiveness of user access reviews. Audits are the foundation for an up-to-date standardized legal template and clause library; they will minimize risk, avoid unexpected litigation, and reduce maintenance costs.
4. Selecting the right CLM solution: A system of checks should ensure that the CLM software vendor/ provider brings the expertise of the concerned sectors and domains onto the table. This ensures that the CLM solution will be tailored to the business’s specific requirements and will be protected against situations involving future policy changes. The CLM solution must be easily accessible and customizable to scale up and integrate with ERP preceding and following contract lifecycle management. OCR technology and end-to-end contract lifecycle support are features to look out for.
5. Defining processes and workflows: A detailed dissection of future or target state contract processes must be done to avoid the risk of failure. All tasks associated with the different contract lifecycle stages must be delineated to mitigate handoffs and reduce cycle times and costs. While a modern CLM solution automates workflows and presents a template and clause library that makes the approval process more efficient, a system of checks and balances for risk management should be established as a part of the CLM implementation strategy.
6. Data migration and clean-up: Master data, like information about the contracting parties, must be mapped, validated, and transferred from existing manual or legacy data systems to the new CLM solution. Following this, a clean-up must be undertaken so that outdated, duplicate, or no longer relevant information may be omitted from the new system, and other data sets may be standardized and consistent. The enriched and clean master data will usher in a smooth transition and prevent several post-go-live issues by enabling availability for analysis and reporting.
7. Training and change management: An effective CLM implementation plan must delineate a strategy for enabling and educating the users to embrace the new solution with the help of relevant knowledge and tools. An assessment of the training needs of different groups is an excellent place to develop a strategy. Effective communication coupled with accessible training material and support is critical to minimizing unwarranted resistance to change. Learning must be continually reinforced to empower users to utilize the CLM solution to its full potential.
8. Testing and quality assurance: Thoroughly testing the CLM solution by identifying positive and negative functional scenarios for test cases, defining the test criteria, and mapping the process is an indispensable part of ensuring success. The system performance and integration, user acceptance, regression avoidance during updates, and defect management must all be tested for consistent quality assurance. Whether the CLM software is sufficiently robust and equipped to deal with contract management for a company effectively can only be seen through testing and regular usage.
9. Go-live and post-implementation support: For a system to become operational, an organization must weigh the pros and cons of a phased approach instead of an absolutist one. The company’s needs must be kept in mind so that license costs are only incurred when required. Following a smooth transition to the CLM software, post-implementation support must be made accessible to users so that their queries and other troubleshooting issues might be addressed. Continuous performance optimization is only a realizable goal if ongoing support is provided and the system is monitored concerning user feedback and experience.

The potential gains that automated CLM software guarantees are unmatched in today’s rapidly evolving demands and policies. From streamlining the contracting process to reducing its complexity and costs incurred, all is within grasp if the aforementioned preparatory measures are undertaken carefully before and following implementation. A cross-functional team, timely audits, an implementation strategy, and a system of checks and balances are at the core of a flourishing CLM solution. Reach out to our CLM experts to know more

The CLM spans all processes associated with the life cycle of each contractual agreement – from initial request through contract discovery, authoring, negotiation, valuation, approval, execution, order tracking/matching, compliance/obligation management, and dispute management to auditing and reporting.

Several organizations across sectors use advanced tools to manage their contract life cycle efficiently and save costs and time.

According to Goldman Sachs, such kinds of tools can help accelerate the contract negotiation cycle by 50%, reduce erroneous payments by 75-90%, and cut operating and processing expenses by 10-30%.

Due to these enormous benefits of CLM tools, organizations of all sizes and industries, especially regulated sectors such as pharma, healthcare, and energy, are rapidly adopting CLM tools as a part of their digital transformation strategies. But all these benefits are realized when you select the appropriate CLM tool that matches your business requirements.

Before finalizing any CLM tool for your business, you should,

• Look at your current situation
• Analyze the gaps in your current contracting process
• Your position in legal digital transformation when it comes to contract management

Once you are done with enough introspection about your organization, you should keep the following points on top of your mind while selecting the contract lifecycle management (CLM) tool.

Top 5 features to look for while choosing the best contract lifecycle management (CLM) tool for your organization

1. The capability of automation: The ability to automate various business processes should be the first consideration when choosing the best contract lifecycle management (CLM) tool. Automation-powered CLM tools help you ensure compliance, mitigate risk, reduce operational costs, and shorten the negotiation cycle. Automation-powered CLM tools can automate repeated and laborious tasks like setting reminders for deadlines and upcoming tasks. According to Deloitte, intelligent contract lifecycle management (CLM) can help streamline processes and increase efficiency to unlock additional value from contracts. In addition, there is a 60% cost reduction with intelligent CLM implementation versus the traditional model.

Are you wondering what the features that make the CLM tool automation powered are?

Let us reveal the key features of the CLM tool that affect business process automation.

• Automated workflow
• Document assembly using clause and template libraries
• Automated field merging from request and intake forms
• Real-time collaboration
• E-signature and other business application integration

In the market, many CLM tools are available that offer you the same features to make your process fully automated. Then what to choose and how to choose the best one? The key is to look for a tool that doesn’t require any coding, and you can create the workflow using a drag-and-drop workflow builder. In addition, the tool should reduce your operational cost and eliminate any cost to the developer or dedicated IT resources.

2. OCR technology: The second feature which you should not miss while choosing the CLM tool is the integration of OCR technology within the tool. The optical character recognition (OCR) technology-powered CLM tool can automatically compare and track language changes throughout the negotiation. And this even makes the contracts searchable by texts and verifiable against templates and clauses within your library.

3. Electronic signature: If you want to achieve the most effective and proactive CLM, you can’t ignore the e-signature. A digital signature is the CLM tool’s most essential and expected component. With the integration of digital signatures in the CLM tool, businesses have saved up to 78.6% and decreased the average time it takes a document to get signed from 5 days to 37 minutes. For this, you must choose the CLM tool with an inbuilt e-signature feature or support integration of e-signature tools from industry-leading brands like Docusign, Hellosign, Panda doc, etc.

4. Complete CLM capabilities and support: We have seen that the CLM tool should automate your business process, it should have OCR technology, and it should be able to include e-signatures, but all these things will work only if your tool has the capability to include all the features and functionality your organization needs. Is the CLM tool you choose able to support the end-to-end contract lifecycle from the request and intake of a contract through its termination?

Your CLM should be able to manage and automate various phases of the contract lifecycle and activities within each phase. There are three phases of the contract lifecycle: pre-execution, execution, and post-execution. The CLM tool you are choosing should work the way you work. It should let you activate each process stage as you want and should integrate into your current processes.

5. Ease of use: Above all the factors necessary for the selection of a good CLM tool, the one which you can’t ignore is the user-friendliness of the tool. Until and unless it’s easy to use, a tool will not be adopted by anyone, no matter how much it’s advantageous. So make sure your CLM tool is intuitive, easy to use, increases compliance and adoption across the business, and is sustainable.

Conclusion

Choosing the right CLM tool is a prerequisite for the immediate and long-term success of your organization’s contract management. Therefore, considering the above-mentioned points while choosing the CLM tool for your company will lead you to select the best fit tool for your company.

For more information on choosing or developing the right CLM tool and successfully transforming contract lifecycle management digitally in your organization, talk to our CLM experts.

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