There’s no doubt that CLM solutions make contracting easy but the key to managing contracts the right way is identifying and tuning the perfect balance among people, processes, and technology at each stage. So, the focus of change management teams should be on what matters the most — ensuring that people are willing and able to adapt to the change levers like technology and processes.
This month, Zycus had conducted a webinar on “CLM Adoption Changes and How to Overcome them” with Andrew Bartels, Vice President & Principal Analyst of Forrester, and Arthur Raguette, Co-founder & EVP of Zycus, in which they had discussed the various contract lifecycle management adoption challenges and how to overcome them.
In case you have missed the webinar and do not have the time to watch the recording, this blog is just the thing you need! We will try to capture the essence of the webinar in this article.
Before diving into the challenges in CLM adoption, we must look at the following points that would help us understand the importance and timeliness of the issue:
- More than two thirds of large companies are either implementing or have implemented a formal contract management process and more than half of those have implemented a technology solution to help them.
- Many early movers are/were not satisfied with the technology solution as an enabler.
- Quite often they have failed to align their people and their process with their platform.
We must agree that CLM is complicated — it has many stakeholders, touches many processes, and presents implementation challenges. However, Artificial Intelligence is beginning to make CLM simpler!
Now, let us see how CLM implementation presents challenges at each stage:
Stage 1: Contracts in electronic repository
- Finding all the current contracts
- Importing and tagging those contracts
Stage 2: Analysis & reporting of contracts
- Selecting and configuring standard reports
- Creating custom analytics of contract portfolio risks, entitlements, and obligations
Stage 3: Automating contract creation
- Creating library of standard terms and conditions
- Setting up rules for what can and can’t be changed
- Designing workflow for routing changes to right person
- Linking eSignature
Stage 4: Connecting with upstream apps
- Identifying relevant upstream apps
- Integrating and creating common user interface
Stage 5: Integrating transaction systems to contractual terms & conditions
- Securing funding for integration to transaction systems
- Integrating with transaction systems
Stage 6: Contract optimization
- Having fully automated contract compliance with transaction systems
- Comparing expected business results with actuals
So, how do we align people, processes, and platforms to overcome the CLM adoption challenges?
We must make the people change-ready by sharing awareness, vision, and benefits of CLM adoption — educate them on what is in for them:
- CRO and CPO: Faster review and negotiations for best possible outcomes
- CLO and CIO: Ensure quick and secure contract approvals and execution
- Audit and CFO: Stay audit-ready anytime with centralized storage
- CRO & CFO: Revenue resiliency with obligations, performance, and risk Management
Besides that, we also need to create excitement among the people about the new technology and foster an organic change management culture within the organization.
Adopting a CLM technology is much more than just transferring our contracts into a new platform. It involves implementing a process that your organization desires and the people need. We can ensure a smooth transformational process by:
- Identifying the key stakeholders and helping them adopt the change.
- Analyzing the requirements of the organization and its people.
- Identifying the gaps in the existing process and analyzing how the “to-be” process can mitigate them.
- Finalizing the “to-be” process and the changes that need to be incorporated to introduce it into the enterprise.
- Ensuring that there is a Change Management process in place.
- Reinforcing use of new technology and disincentivize process/platform avoidance.
- Not automating a broken process — do not “Fail Fast”, deploy an agile process instead.
- Using the technology as per your requirement — in your CRM, P2P, or Microsoft Word. This allows you to gain benefits with minimal changes.
Artificial Intelligence helps in CLM adoption with its following capabilities:
- Self-Learning — Accelerates analysis to get critical business insights using AI/ML to predict and mitigate risk
- Performant and Scalable — Enterprise-wide user adoption that can process thousands of contracts and documents at a time
- Intelligent — Trainable, embedded machine learning “learns” behaviour from your actions and data sources — incrementally improving accurate results
- Extensible Architecture — Extendable and configurable AI
- Integrable — Internal and external add on systems for maximum value
The above capabilities make adoption easy, efficient and beneficial for the organizations in the ways shown below:
By aligning people, process, and platform, and following the three pillars of change — operations, technology, delivery, we can successfully deploy a contract management solution for our organization.
For more detailed information, download our webinar recording.