In the scramble to stay up to date with the latest CLM technology, many businesses fall into the common trap of purchasing the wrong tech solution. Technology is a significant investment, and having a solution that doesn’t fit the needs of your business can be even worse than having no solution at all. Whether it’s because an executive has a connection to the vendor or a rushed decision, the risk of wasting thousands on unused software is high. This risk is no different for CLM tools.
A CLM solution is a huge asset, especially for companies managing a high volume of contracts. It can lower costs, speed up cycle times, and reduce the workload for legal and contract professionals. But, implementing the wrong tool or even the right tool at the wrong time won’t give you the desired results.
So, how do you ensure you can take full advantage of your CLM tool? You first need to establish a strong foundation of knowledge about your contract processes among all relevant stakeholders. By understanding the current state of contracting in the business and taking steps to patch holes in existing processes, you can ensure that your team will be ready to implement a CLM and start seeing a return on investment ASAP.
Here are the steps to evaluate your team’s CLM readiness and choose the right CLM tool.
Step 1: Gather Stakeholders
Before making any moves with your CLM implementation, ensure everyone who plays a role in the contract lifecycle is aware of the process and has their voice included in the conversation. Avoid starting progress on an implementation only to find out a whole team of important individuals had no idea about it. Not only will you miss out on their contributions, but you might also lose much-needed support for the project.
Every business handles contracts differently. Be thorough in your evaluation to ensure that no one goes without representation. This may include bringing in people from legal, sales, procurement, finance, business development, and IT. Different perspectives will allow you to paint a more comprehensive view of your contract lifecycle.
Questions to ask during Step 1:
How many different departments and users contribute to the contract lifecycle? How many of those contributors will need to have access to the CLM tool?
What are the specific roles each department plays in the contract lifecycle?
Does outside counsel play a role in the contract lifecycle? If so, how?
Do all current stakeholders have open lines of communication with each other?
Do all relevant stakeholders have visibility into the contract lifecycle?
Step 2: Define Your CLM Goals
Once you’ve gathered input from all relevant stakeholders and heard their recommendations, the next step is to align on your objectives. Each department will have unique priorities and expectations from the CLM tool, so it’s essential to consider all perspectives and create a balanced list of goals. This collaborative approach ensures that your CLM implementation addresses key pain points and delivers desired outcomes.
Questions to ask during Step 2:
What outcomes does each department expect from a CLM tool?
What are your current contract pain points?
How could a CLM tool help solve existing problems?
Step 3: Evaluate Your Current Processes
After defining your CLM goals, the next crucial step is to evaluate your current contract processes. Before moving forward with a CLM implementation, gain a clear understanding of how your business handles contracts. What does your team do well? Where do you frequently encounter problems? By mapping out your entire contract lifecycle, you can identify issues and propose potential solutions.
It’s important to remember that CLM tools aren’t a magical fix for every problem. Ensure your processes aren’t too broken to be helped by technology alone.
Questions to ask during Step 3:
Are there inefficiencies in your current contract processes?
What changes can you make to fix gaps in your processes right now?
Are there problems you can solve without implementing a CLM tool?
Do you have established workflows, templates, and playbooks?
What are your most frequently negotiated clauses?
What is your average cycle time?
Step 4: Pick a Project Champion
Once you have a clear understanding of your current processes, the next step is to pick a project champion for your CLM implementation. Given the complexity of CLM projects, having a dedicated project manager is essential. This person will oversee the entire process, ensuring everyone stays involved and excited. They need to effectively communicate the benefits of the CLM implementation across the enterprise, not just to stakeholders, and address any concerns that arise, especially from skeptics.
Questions to ask during Step 4:
Is there anyone among the current stakeholders who would be suited for the role of project champion?
Are current stakeholders equipped to take on the extra responsibilities that come with this role?
Would we benefit from bringing in an outside hire or a consultation team to assist with project planning and execution?
Step 5: Create a Business Case
A project champion alone might not be enough to gain support from every corner of the organization. Securing backing from the executive team can add significant credibility to the project, especially for those who might not immediately see the benefits.
Your business case should outline both the costs and benefits of implementing a CLM tool. Clearly demonstrate how the tool will positively impact business goals. Start by itemizing the costs caused by current contract issues and show how the CLM tool will address and eliminate these problems.
Questions to ask during Step 5:
What outcomes will the executive team expect from a CLM tool?
How will a CLM tool help contract stakeholders demonstrate their business contributions to the executive team?
How will a CLM tool positively impact business goals?
Step 6: Organize Must-Haves and Nice-to-Haves
As you move toward selecting a specific CLM tool, it’s essential to create a comprehensive list of features and functions that would benefit your team. Organize this list by distinguishing between necessary features for the tool’s success and those that would be nice to have. Considering potential disagreements between departments, it’s crucial to incorporate the voices of all stakeholders as you prioritize.
Questions to ask during Step 6:
What are your bare minimum required functions for a CLM tool?
Are there certain features each department expects from a CLM tool?
What are the features that would be nice to have but aren’t a necessity?
Are there any CLM features that are unimportant to the success of your implementation?
Step 7: Create a Vendor Checklist
Creating a vendor checklist simplifies the process of comparing vendors in a quantifiable way. This checklist should include any required features you expect from both the tool and the vendor. Some companies find it helpful to use the checklist to assign scores to each vendor during the selection process.
Questions to ask during this step include:
How does each vendor meet your established requirements?
Do the vendors have a good reputation for customer service?
Are vendors able to meet your customization and integration needs?
Step 8: Set Up Performance Metrics
To determine the success of your CLM tool, it’s essential to establish performance metrics. By setting up key performance indicators (KPIs) that track your desired outcomes, you can quantify the tool’s success, identify areas where it may be underperforming, and develop solutions to enhance its performance.
Questions to ask during this step include:
What KPIs can you track to measure the performance of your CLM tool?
How will you keep track of KPIs?
How often will you evaluate CLM performance and make improvements?
Step 9: Establish an Ongoing CLM Task Force
A CLM implementation doesn’t end once the tool goes live. As our business continues to grow, the tool must evolve and improve as well. The best way to ensure this is by creating a dedicated team of contract professionals to manage and maintain the CLM tool. This team can make necessary improvements, address end-user questions, and stay in contact with the vendor.
Depending on the size of our operation, we may need just one person for the job, or we might need to distribute tasks among several people if we have a high volume of contracts and end-users.
Questions to ask during this step include:
What duties will members of the CLM task force handle?
Are current stakeholders equipped to take on these responsibilities?
Do we need additional specialized staff to support and maintain the CLM tool?
How will the task force incorporate feedback from end-users, and how can end-users communicate with the task force?
For more help evaluating your team’s CLM readiness, reach out to us to schedule a consultation today.
