Contract lifecycle management (CLM) is an exciting but relatively new aspect of the corporate legal business. That’s why Wolters Kluwer’s ELM Solutions made sure to include a session to help our conference attendees understand how contract lifecycle management technology could benefit them and what to look for in a potential vendor or solution. The session was presented by two of our CLM experts: Terry Sadowski, CLM General Manager and Segment Leader, and Lee Matthews, New Ventures Strategy Director.
Why is CLM needed?
Contract creation and management is a complex business. In most large companies, or even mid-sized organizations with many contracts in use, developing contracts, keeping track of their status, and knowing when they need to be revisited can quickly become difficult for busy staff. When organizations use homegrown solutions or manual processes, they often find that contract management is expensive and inefficient. Both customers and employees can feel the pain of long, cumbersome contract management processes, resulting in high dissatisfaction rates. Perhaps more worryingly, the difficulty of keeping current can put the company at risk both legally and financially due to non-compliance.
Fortunately, there are technology tools available to address these pain points. By streamlining and automating contract creation and management, legal organizations can ensure they create contracts consistently and reduce oversights and errors that can lead to fines or missed opportunities for savings. Using a robust CLM solution also allows legal teams to better meet the expectations of their internal and external customers and free team members to work on more valuable tasks.
With CLM being a hot $1.4B industry growing at an 18% annual rate, the CLM market is already saturated with vendors of all sizes and types. This makes it difficult for companies to sort through the options to find the right partner. There are some questions every company should ask their potential CLM vendors, however. Terry and Lee grouped these into three categories: long-term vendor goals, product “spin,” and implementation of a solution. Following are a few examples of each.
Ask these questions to find out if the vendor is profitable and stable, as well as whether they have the expertise to deliver and support your CLM initiative over the long haul.
- Is CLM a specialty practice for the vendor or their primary business? If CLM is a part of their core business, a vendor is likely to have more commitment to supporting their solution long-term, as well as more expertise.
- Is the CLM practice profitable? Vendors are only likely to devote resources and remain committed to a line of business that generates profits.
This line of questioning will help you determine whether the application is likely to meet your organization’s needs now and into the future.
- Will there be any code development required for this project? If so, in what specific areas and how will future upgrades be affected in both time and cost? This is important because the more custom coding a product requires, the longer it will take to implement now and upgrade in the future. And, of course, more time also means higher costs.
- Are clauses saved in the clause library where each clause has its own individual version control/history, security access rights? Clause-based document generation reduces administration costs for governance of terms and conditions. And the ability to secure access and control versioning is critical.
- Are documents generated automatically in MS Word without plug-ins for full native MS Word functionality? Vendors may claim that their product integrates with MS Word, but all integrations are not equal. Those that use plug-ins or Word Reader will not offer the same ease-of-use for Word users and may require additional training.
These questions will help you determine whether the vendor has real expertise in delivering successful implementations with proven, repeatable best practice methods.
- Will my project be staffed by named, dedicated implementation resources with each person having performed dozens of implementations of the product I am licensing? The value of this experience speaks for itself. Less experienced vendors may think they understand how to meet your needs, but you could find out the hard way that their understanding is mostly theoretical.
- Will my implementation team be able to share both CLM process best practices and CLM project implementation best practices? Expertise in CLM isn’t a guarantee of expertise in CLM implementation. Insist on a vendor with a clear implementation plan who can articulate the reasons for each step.
Terry and Lee told the audience that it’s important to set up attainable goals. There’s no need to go live in all geographies, across all business units or departments on day one. By starting small, establishing some success, and then building on that momentum, your CLM solution can help ensure that your team runs more efficiently and your organization achieves all the benefits of CLM.