5 Critical Questions to Ask Before Implementing a Contract Lifecycle Management (CLM) Solution
#1: Why do we need it?
As for any new digital project, in the early phase, you need to prepare the future adoption of your targeted users. As a critical case for change:
- You have to prepare the story you will tell, the benefits which will be generated out of it (qualitatively but also quantitatively with a rough order of expected ROI), WHY such transformation is that important for the business
- You have to know WHAT is your Contract landscape, which process steps you want to consider within your project scope
- For sure, WHO are your impacted stakeholders, who are the persona and which are their needs, their pain points to solve (Don’t think solution, stay focus on the needs)
- Finally, what will be the timeline to consider in respect of the ROI, WHEN would you need your solution to be in operations, do you have to consider a related decommissioning or obsolescence plan for the legacy system if need be.
#2: Which process steps are in scope?
You may plan to target an end-to-end process digitalisation, from sourcing (or even scouting) to pay, or limit your transformation to a part of it, focusing on sourcing to contract, or just contract management.
That will allow you to identify the relevant players in the market and to identify the need for seamless integration between different digital solution (e.g. ERP, Digital signature, master data,…).
In order to avoid pushing a given complexity into a CLM solution, I strongly advise to run a Business process optimization analysis before the implementation in order to simplify, optimise and automate your process. The targeted CLM solution in term of needs may be also an opportunity for optimization and automation.
#3: What does our current contract landscape look like?
First, where are your existing contracts stored? Are they already centralized within a given database or everywhere, in the contract managers’ and/or the buyers’ cabinets…
But you have to figured out if you want to manage your legacy Contracts and your new Contracts into the new solution or just the new ones. Indeed, it may trigger an action to store all existing legacy contracts into a centralized database as scanned documents, before thinking about implementing a CLM solution. Indeed, it is worth that you centralize the legacy contracts in order to streamline the migration activity.
Additionally, as a support for the migration and in order to get prepared to run proper Contract analytics (if need be), you may also envisage to implement a Contract Discovery and Analytics solution which will allow to turn your legacy Contracts into data (generally speaking, they are just scanned documents with very low level of data extraction).
#4: Are our contract templates ready for the solution?
In case you have some Contract templates available, they may have been designed in a way which is not appropriate with regards to the new way of managing Contracts that you are targeting. As an example, your Contract templates may encompass a high number of different options. If you are targeting a CLM solution which will enable you to manage a library of clauses, all these options will be directly covered by the mechanism you will implement such as business questions which will trigger a list of clauses to be assembled. Implementing a library of clauses will drastically save time for people responsible for managing them.
#5: What is our long term vision with regards to AI?
Implementing a CLM solution which allows you to manage a library of clauses, Contract authoring and Contract redlining, where your legacy Contracts have been migrated and enabling a seamless integration with an Analytics solution, is a big step forward and a compulsory step forward if you look at leveraging Artificial Intelligence for business needs. Indeed, looking at a CLM solution which will only allow you to manage bookmarks into contracts may prevent you to think about benefiting from AI.
If you target to enable your contract managers and buyers to mainly focus on added value tasks, you may think about using AI in order to recommend them to make some decisions, to speed-up approval of low value added clauses deviations and to trigger some actions as a prescriptive analytics mean.
That vision shall be known while you will write down your requirements as it will influence the kind of requirements which will enable such AI to be implemented in a further step.
My final thoughts
Don’t miss that your implementation success relies on the way you have on-boarded your users. You have to involve them in the early phase of the project:
- To collect their pain points
- To run a Proof of Concept (thanks to a sandbox) with the editors who will be part of the competition. Your users have to test the solutions in the frame of your selection process
- To contribute to the selection dossier