9 Ways to Make Your CLM Transformation a Success

For CLM success: Focus on problems. Look forward. Make sponsors + users better off. Analysis before automation. Be realistic about data. Remember to KISS.

Contract Lifecycle Management (CLM) software has been a hot product in recent years.  Many businesses are somewhere in the process of rolling out a new CLM solution. Some businesses are evaluating options and getting ready to start the process.  Some businesses are fully live.  Wherever you are in your CLM journey, it’s never too late to learn from the experiences of others, and to tweak your plans accordingly.  One thing always holds true. CLM transformations are complex, in terms of technology, people and process. If you’re not careful, the complexity will take your project off the rails.  But if you follow certain rules, your chances of a successful project will increase dramatically. 

1. Start with problems, not products 

The first rule may sound obvious, but it’s often overlooked.  This can happen when different teams decide they need a product, but each is trying to solve a different problem.  Legal may be under pressure to speed up turnaround times on new deals and conclude that a CLM can help with that.  Finance may be worried that weak insight into the terms of sales contracts results in revenue recognition surprises and conclude that a CLM can help solve that.  Before you know it, someone is tasked to “go and find a good CLM product”, rather than solve these specific problems.  If you lose the focus on problems, you may end up rolling out a single product that provides each department with a mediocre solution, rather than two different products that each department loves and embraces. Or you might choose a product that makes Team A happy and Team B unhappy, when solving Team B’s problem offers far more value to the company. 

2. Prioritize problems looking forward, not backward 

As you tackle contract-related challenges, it’s easy to get caught up in things that mattered in the recent past.  If legal bottlenecks on new deals were causing the most pain last year, then it’s tempting to make that your priority going forward.  Sometimes this makes sense, especially when your company and the economy are expected to follow a similar pattern going forward.  But when things are changing, you need to adjust.  In a slowing economy, for example, closing lots of new deals typically becomes less pressing, and answering questions about existing contracts becomes more pressing. If you ignore this, and solve last year’s problems while neglecting this year’s, nobody will thank you for it. 

3. Understand the status quo

Before you try to improve anything, it helps to understand the current state.  With contracts and CLM, this is often far more challenging than people expect.  It pays, therefore, to allocate some time and effort at the beginning of any CLM project to gather reliable data about the status quo.  If you want to improve contract process times, you need to know how long things take today.  If you want to lower contractual risk, you need to find and measure the material risks in your existing portfolio.  If you want to build better templates and playbooks, then you need to analyze past deals and documents to understand what good and bad look like. Put simply, there are good reasons to start with contract analysis before you tackle process improvement and automation.  

4. Understand what success looks like for your sponsors

It’s rare that a project has a single goal. Typically, there are numerous goals and CLM projects are no exception.  Just don’t lose sight of the primary goal that motivated your sponsor to fund the project.  If the GC is the sponsor, and their primary goal is to gain insight and avoid future fire drills, don’t focus all your energy on a different goal of building an integrated solution for self-service contract requests via Salesforce.  Or don’t do this at the expense of the GC’s primary goal. If your sponsor is unhappy, the project will be at risk, even if other people are happy. 

5. Understand what success looks like for your users 

Just as it’s a mistake to ignore the needs of your sponsor, it’s also a mistake to ignore the needs of your end users.  You need the sponsor to keep the project funded and moving forward.  But you also need people to embrace and use whatever product you roll out.  A product or process that makes the users worse off is highly likely to fail.  If the user experience is bad, people will complain and start finding workarounds.  Whatever you do, find a way to make users better off than they were before. Don’t make their life more difficult.  

6. CLM is an elephant: eat it one bite at a time 

There’s an old joke that asks, “how do you eat an elephant?” for which the answer is “one bite at a time.”  Transforming contracts and contracting is a large and complex task.  So, you need to tackle it one bite at a time.  Start with a specific team. Start with a specific problem. Solve that problem, measure success and value, then move on to the next team or the next problem.  Give your users an amazing experience and they will spread the word to their colleagues.  Show business value in the first phase and you will have a much easier time getting budget for the next. 

7. Data is key: your plan for getting data must be grounded in reality 

Many CLM projects these days are data-driven.  Everyone is excited by the vision of fast insight across thousands of contracts allowing the business to make better decisions and save money in a crisis.  But make sure your plans for getting the data are realistic.  Not all contract AI is created equal.  You need to test the tools you choose, rather than trusting a demo. Otherwise, you may discover too late that humans are being used to extract the data you need, which means large delays and large price tags compared to what you originally expected.  Of course, if you pick best-of-breed contract AI, your chances of success improve dramatically. 

8. Automation is great: but ignore the KISS principle at your peril  

The KISS principle (keep it simple stupid) applies equally to workflow and template automation.  There’s excellent value in streamlining some workflows and automating some drafting tasks.  An automated NDA, for example, is almost always a good idea.  But avoid the temptation to over-automate. Many of the tools will allow you to automate complex things, but that doesn’t make it a good idea.  At some point, workflows become so complex and rigid that they prevent people from getting things done.  And templates become so complex that only one person understands how they work. If that person leaves, the template is doomed. 

9. Beware the difference between internal and external users 

Some processes are internal and affect only internal users, over whom your business has some control. Other processes (e.g., negotiation) are external and affect users over whom your business has much less control.  Don’t assume that external users will embrace your solution.  Making this assumption has been the death-knell for many negotiation tools in the past and will be for many in the future.  If you want external users to use your tool, you’ll need to persuade them that it makes them better off than whatever process they follow today. Or, you’ll need to have significant leverage over them (which, sometimes, you do, but often, you don’t). 

Follow these rules, and your CLM project will have an extremely high chance of success. Ignore them and you may be in for a rough ride. Even if you’re halfway through, it’s never too late to make some changes and get back on track. 

Similar posts

Insights in your inbox

Subscribe for updates from Catylex – legal tech insights and product updates delivered to your inbox.