By Simon McCarthy, vice president of enterprise transformation at ContractPodAi
Streamlining processes, ensuring compliance, and driving operational efficiencies are becoming increasingly important for organisations, which gives some reasoning as to why the contract lifecycle management (CLM) software market is projected to reach $4.65bn by 2030. However, there are challenges ahead, as Gartner predicts that by 2024, nearly 50% of initial CLM implementations will fall short of expectations. It is no secret that CLM implementation is a challenging process, given the different software integrations, groups involved, and time investment that it takes to successfully implement a new system.
Overcoming these challenges involves being aware of the most common reasons why implementations fail: by having the knowledge on how to overcome these challenges, you can be ready to set out on your CLM implementation journey, and your team, and company, will be in better hands.
Here are the five mistakes to be on the look out for, and how you can avoid them:
Mistake #1: Lack of CLM Preparedness
Organizations must lay a solid foundation with thorough planning. This goes beyond selecting shining new software; it’s about aligning the solution with your specific needs and goals.
Lay the foundational groundwork by conducting an assessment of your company’s contract management maturity level and process, identifying pain points, and defining clear objectives. A few examples of what this looks like includes aligning on a strategy for this implementation and asking what the plan is and approach in managing contracts throughout their lifecycle. From there, discuss roles and responsibilities within each stage of the contractual process and policies and procedure to ensure security.
Preparedness equals readiness, and this step is essential to ensuring your team is ready to implement CLM.
Mistake #2: Unengaged Stakeholders: CLM Isn’t Just for Legal
Successful CLM implementation hinges on securing buy-in from key stakeholders across the organization.
Rallying legal, procurement, finance, and other teams is crucial for fostering a collaborative environment. Communicate the value proposition of CLM software, address concerns, and highlight its positive impact on their daily workflows. By engaging stakeholders from the outset, you’ll build a united front, ensuring everyone is committed to the success of the implementation and is aware of their contribution towards it.
Mistake #3: Focusing on the Tech & Forgetting the Teams
Implementing CLM software isn’t just about the technology; it’s about empowering your team with the knowledge and tools to excel. Invest in comprehensive training programs that enable employees to navigate the system, leverage its features, and understand the tangible benefits it brings to their work. Moreover, effective change management strategies are essential to address resistance and foster a culture of continuous improvement. By preparing your team for the changes brought by CLM implementation, you’ll pave the way for a seamless transition and widespread adoption.
Mistake #4: Forgetting About the Rest of Your Tech Stack
To unlock the full potential of CLM, integration with existing systems is paramount. Seamless data exchange between CLM software and other platforms, such as CRM or ERP systems, eliminates silos and enhances efficiency. Evaluate CLM solutions, compatibility, and integration capabilities to ensure smooth workflows and minimize manual data entry. Connecting the dots will create a cohesive ecosystem that fuels operational excellence and accuracy.
Mistake #5: Unrealistic Expectations
Selecting the right CLM solution is a crucial decision to make or break your implementation journey. Consider your unique contract management needs, scalability requirements, and vendor reputation. Do your due diligence, seek recommendations, and evaluate multiple options to make an informed decision. Choosing a CLM solution that aligns with your business goals sets you up for success.
Recognizing the importance of expectation management and the role of change management is crucial when integrating modern technology like CLM into your business ecosystem. Implementing CLM involves significant changes that can impact cross-functional teams across a global scale. Neglecting to prioritize user adoption or underestimating the level of change required often results in failed implementations. In addition, misaligned expectations, especially regarding the level of effort and commitment needed, can further compound the challenges.
Successful CLM implementation is within your grasp, provided you navigate the common pitfalls with a strategic mindset. Thorough planning, stakeholder engagement, comprehensive training, effective change management, and careful selection of the right CLM solution are the pillars of success.
Simon McCarthy joined ContractPodAI in January 2023 from KPMG, where he was director of contract lifecycle management.