Because many of the available CLM tools on the market are relatively new, it can be challenging for companies to be sure about how to choose and implement a product.
Magnus Lindberg is the Chief Enabler at Skye Contracts works where he has been focused on the use of tech to improve processes, legal work, and contract management.
He’s experienced in working with mid-sized businesses and large corporations and has several tips and ideas about what type of information orgs need to have together before searching for the perfect CLM solution as well as what the steps are to make sure the implementation is successful after choosing a vendor.
If your team is searching for a new Contract Management tool this is a great episode to listen in on!
What Steps Should Businesses Take?
Before spending money on new CLM software, there are several things that businesses need to consider. In order to purchase and implement the right software, it’s important to know the ins and outs of business processes.
Magnus explains that it’s in a company’s best interest to first be aware of what CLM software does and doesn’t do. It is primarily a tool, not the solution for every issue a business experiences.
To be better able to determine which issues the tool can help with, it’s ideal for decision-makers to work in one sector or department of a business. Fully understand the way processes work within that department, as well as how these processes connect to those of other departments.
Before making any sort of purchase, it’s good to determine the simplest way processes can be completed. Keeping the steps simple, write down each process to start.
For example, take a closer look at contracts and answer deeper questions about them. How many contracts are active at a given time? How complicated are they? Are there many similarities between contracts? Can they be categorized and bundled?
In some cases, after simplifying business processes, companies find that they don’t need contract management software at all (though this is uncommon in larger companies).
Remember that contract management software is not a fix-all for businesses, and to make the best use of the tool, it may be necessary to simplify many more business processes first.
How To Get Legal Onboard
Magnus explains that understanding current contract management procedures are a key element when it comes to deciding on new software.
Because legal teams are often reluctant to seek out new tools to make contract management easier, it may be a good idea to involve other departments in the proposing process.
Different teams within an organization can not only make importing existing contracts into a new database easier, but can also provide insights as to why a new tool may be helpful.
For example, members of the IT department, who understand data, can create a decent argument in favor of tool implementation. These individuals can help guide the legal team toward implementing new software into contract management processes.
Next, it’s important to be well aware of which team takes care of which processes. Are teams expecting the right things from each other? By knowing exactly who handles what process, it becomes easier to discover where significant lag has resulted.
How To Make Decisions
Once the need for contract management software has been agreed upon by the involved teams, the next step of the process involves searching for the right tool.
Some businesses begin their search by looking at demos offered by companies offering contract management solutions. Magnus explains that looking at a demo is not always effective. They’re a decent introduction to a company, but they do not provide enough information to create a fair impression of the tool itself.
Instead, it’s better to research a little deeper. Rather than relying on demos, compare different software offerings. Study the features that each program presents. Take a look at proposed workflows and configurations and then try applying them to the current needs of the organization.
From there, have the software company explain the engine behind the program. Have them explain how it works in a practical sense. Does the product need an additional implementation product? How is the software maintained? How many of the company’s issues can be solved or improved upon by using this specific tool?
Often, businesses decide that they need new legal technology, but they’re not sure where to start when it comes to navigating through all of the choices available.
Every business is different, so every case of needing something new is different as well.
One way to make the decision process easier is to take apart the different processes that the business conducts. Define everything in simple steps. Make a list of who is involved in each process, who approves new things, how contracts are signed. How do signed, active contracts connect to other departments within the same company?
Looking at each process the company is involved in can make it easy to see where issues arise, which solutions are needed, and how they have to work.
When the issues are clear, it’s important to determine what sort of labor power is available for implementation.
If a new tool is purchased, what sort of resources does the company have available to implement it? How would the tool be maintained? Which team would adopt which duty when it comes to upkeep?
Time and resources are two of the most important things to consider when planning to purchase a new tool.
A new CLM tool does not fix every issue immediately, and when planning to purchase software, it’s important to be aware of the timeline. A good software company will explain how long implementation is predicted to take, and what end results can be expected.
After Signature Issues
One of the best arguments in favor of utilizing a CLM tool relates to the way contracts are often ignored after signatures are obtained.
Because so little focus is placed on contracts following their signature, businesses miss out on renewal dates as well as auto-renews. Being unaware of the date passing can lead to both loss of funds and loss of clients.
When trying to convince legal teams to adopt CLM tools, it might be useful to present reports from financial teams that explain just how much money is commonly lost due to ignoring important contract dates. This way, it will be easier to explain why these tools are needed.
Challenges After Purchase
Companies need to plan ahead for the implementation of a new CLM tool. Signing up to use the software is one thing, but being able to have the entire business utilize the software is another.
It’s important to have everyone on board when it comes to learning how to use a new tool. If there is no one available to train people to use the tool, and very few people end up using it, it won’t be in use for very long. Even the best software will not matter if nobody in the company knows how to use it.
When choosing an appropriate CLM software program, Magnus offers a few final tips.
Do not choose the first product you see without researching other options.
Ensure that you have dedicated personnel to take care of implementation.
Look at your company’s internal processes (decide whether only document generation tools are needed, or if an end-to-end system is required).
Think about what you already have, what you could use, and how you plan to incorporate features.