Prepare your internal team to ensure a smooth CLM rollout
Think about a typical business day. Just how many minutes do executives have to fight fires? Especially fires that erupt because some contract somewhere was not drafted, managed, or followed correctly? Even if you have a solid in-house legal team or an army of counselors, would you be able to afford the business ‘downtime’ these meetings and fix-it-days would cause? Yet, so many managers spill uncounted hours digging agreements, chasing contract calendars, or making sense of these paper monsters? In today’s world, so much work with a company’s suppliers, vendors, trade partners, supply chains, and services hinges a lot on the strength and infallibility of these contracts.
Contract Lifecycle Management (CLM) Rises to The Rescue
It takes a lot of effort, time, prudence, and people to handle a contract – from initiation to authoring, to process and workflow, to negotiation and approval, to execution, audits, management, and renewal. Enter the power of CLM or contract lifecycle management. It is a technology solution that can help a business with a cohesive ability to handle contract creation, storage, compliance, and automation – by streamlining all contract processes and supplementing them with analytics, data-driven approaches, and real-time intelligence. That’s why more and more companies are now putting accentuated efforts into making their contract processes streamlined and tech-enabled.
As per a Deloitte survey on ‘Contract and Commercial Management, attention is now shifting to post-award stages with companies making investments in improving contract management after signature. Consider how 39 percent were found to be focused on enhancing post-award processes, and 34 percent focused on introducing more robust approaches for obligation management. In fact, 20 percent were spotted taking steps to automate and increase data exchange with trading partners. About 25 percent are focusing on post-award risk management as well. Contract lifecycle management (CLM) is turning into a no-brainer, especially after all the risks and losses that businesses suffered during the pandemic- just because their contracts were scattered, poorly managed, and weak in compliance.
Train the team for contract lifecycle management (CLM)
What’s interesting when we observe the pronounced state of CLM adoption is that all this translates into new roles, advantages, and opportunities for people. The growing adoption of technology has led to new and more fulfilling roles, with 45 percent of enterprises increasing their headcount.
The fine line between the success of any CLM implementation and it is just a ‘tick in the box’ is about the people who drive this, at the end of the day. CLM is not just about automating contract management. It’s about the digitization of an area that has long been outdated, paper-laden, and stuck in siloes. The shift to CLM pre-necessitates the need for a change in the mindset and processes of the people in and around CLM.
The shift to digitization, rather than simply automation, is significant because it is all about the consolidation of data and data flows – and the consequences that data has on business teams and their decisions.
What comes out strongly in CLM investments is how people are needed to power ‘with’ technology and bring their skills, judgment, and greater value to the table. As seen in the Deloitte report, enterprises also emphasize streamlining their processes for the new tech-driven scenario. Incidentally, 93 percent on the buy-side shift to a center-led, matrixed CLM model. Similarly, 55 percent on the sell-side, too, are taking a consolidated approach.
How do you ensure your enterprise addresses the ‘people’ part of CLM deployment well?
For starters. Ensure that your employees, key contract management stakeholders, teams, and decision points know a new reality that will unfold once CLM kicks in.
For this, they need to be cognizant of both features and new skill-sets around:
- Self-service contract creation
- New templates and pre-approved alternative clauses
- The ability of real-time and remote-access, collaboration
- The need and capabilities available for a faster contract turnaround
- New tools for version control, tracking, and comparison
- Data for contract negotiations
- Adjusting to an environment of reduced paperwork and light-weight management
- A different outlook on compliance risk and an understanding of automation help here
- Realization of the granularity and real-time nature of reports and dashboards across the contract lifecycle
- Ability to translate the improved visibility and control into better execution and compliance
- New goals for contract turnaround times
- Leveraging mechanisms like fallbacks, automated playbooks, and dynamic clause libraries
- Use of consistent contract storage practices
- Making the most of optimal tracking and reporting
- Minimization of feedback loops and iterations
- Apt use of advanced analytics and mobile app tracking
- Substantial value from reminders and alerts on a consistent level
CLM is still about People
When you can guide, train and upskill your teams on the new scenarios, tools, processes, and goals that contract lifecycle management enables, you can truly capture the value of an end-to-end contract lifecycle management solution. It’s important here to choose a CLM solution that has demonstrated expertise from implementation to integration, consulting to customization, and development to deployment – as well as in its simplicity and user-friendliness aspects. With many options available to you, the clincher should be a solution’s ability to reduce complexity. Furthermore, it should empower your people with CLM, not confuse them.
Choose a consultant and CLM expert that houses not just developers but seasoned consultants, legal experts, and a host of support services. A partner that can promise world-class software engineering and support in the latest technologies would define the success of your CLM investment. Also, pick someone who can offer buy-side and sell-side contract lifecycle management. But above all, sign the dotted line with someone who can connect the ‘people’ dots for you- making your teams confident, able, and ready to embrace CLM. Else, this will cost you indirect idle time wasted as a team struggles with practical use or acceptance of any CLM.
Contract drafting or negotiation or renewals or risk management- it can all get more accessible and free of headaches. The idea is to elevate business ‘uptime,’ and as long as your teams can understand and steer CLM well – that will happen.