Digital contract processes are no longer a ‘nice to have’ for businesses. They are an essential tool to help manage financial, operational and regulatory risks that arise through poor contract management. It has proved to be essential to improving efficiency, reducing contract cycle times and the administrative burden as well as other business functions to analyse contracts and provide management information. At Pathways Digital, we hear about these benefits from our clients regularly.

However, many (if not most) businesses have not realised the technology’s benefits and low adoption rates are typically the result. Most frequently, this is due to poor implementation, where the focus has been leaning on the technology rather than what the technology is enabling, which is the people and the business processes. In the previous article, we talked about identifying your current state, getting buy in, and choosing a software solution. Now, we can talk about five key principles we’ve identified that are required for successful implementation.

Empower Your Team

After you have chosen your software and get executive buy-in but before you begin implementation, designate an internal team to oversee the implementation and ongoing execution of CLM. This team will serve as internal experts and bridge the knowledge gap between your organization and your CLM vendor. The best practice for establishing this team is to select members from different areas of the organization. With a diverse leadership team, top-level alignment on rules and processes will be more robust, making organizational alignment more easily attainable.

The cause of most failed CLM implementations is a lack of change management and senior sponsorship. Technology is often seen as a silver bullet to fix a broken process, to increase efficiency or reduce cost but it is redundant if it isn’t used properly or deployed in the right way. Technology, after all, is an enabler and cannot be implemented in isolation or without considering each of the principles above.

It is essential to understand the impact of the change to current ways of working for potential users of the tool. Once this change impact is understood, awareness and knowledge of the tool’s capability and what the change means for specific user groups, as well as the business must be built. This should be done through regular comms from both business leaders as well as local managers.

During implementation you then must provide adequate training and comms to the affected user groups so they are able to use the tool correctly. Once the tool is implemented support materials should be available for users as well as new starters so they can be appropriately on-boarded and knowledge of the tool’s capabilities can be reinforced.

Invest in training.

It doesn’t matter how advanced a technology tool is, or how revolutionary its impact will be on the business if no one uses it. This should be top of mind when companies begin rolling out a new system. Experts in their products’ functionality are best equipped to offer users the necessary in-person training and user guides that will ensure smooth adoption. Look for a technology partner that offers training and programs that help prepare select employees in core function areas with in-depth product knowledge. These “super users” can help fellow employees get the most from the technology. Employees can learn the software as they complete daily tasks unique to their various roles across the organization.

Implement a two-pronged strategy.

Timing is everything when it comes to deploying technology across the organization. Begin a rollout of simple contracting functions across the business to allow employees to familiarize themselves with the new system, without being overwhelmed by complex features and functions right out of the gate. This simplified implementation will help build confidence and buy-in among stakeholders and employees alike.

Simultaneously, those select “super users” identified earlier in the implementation process, should share the complete capabilities as this helps to create a core team who can evangelize the system to others. They also serve as in-house system experts who can help ensure adoption and identify opportunities for improvement.

Prioritise Contracts for Migration

Contract Management is not just about setting up new transactions. To get the most out of yoru new processes, it’s important to migrate your existing contracts, paper or digital. This can be daunting, but the right process and software will help you find a new way forward.

A digitization plan starts by identifying where your documents are physically stored. Then, you will prioritize which categories of documents to digitize. It is generally the best practice to start with active contracts and any documents required for compliance. Once these are migrated, you should migrate any inactive contracts. It may not seem necessary to migrate inactive contracts, but the right CLM will make the data contained in them searchable and quickly retrievable.

Start Small (again)

Contract Management tools have several impressive features, however, it is important to recognise the current level of maturity within your business as to whether it is ready for those features. For example, your business may store contracts on local hard drives, draft contracts based on the last version used, negotiate over email, and sign by hand. In this scenario, a tool could help digitise this process with a central repository, drafting capability from online templates libraries, negotiation through a collaboration platform, and e-signature. This is a significant amount of change for the user though who, at the moment, is just using basic word-processing software.

Carefully consider the contracts and information you want to store on the tool rather than uploading all your information as-is. The tool is only as useful as the data within it. Start by sanitising your existing contract base by removing duplicates and archiving terminated contracts, for example, consolidate the information centrally or have it clearly mapped. Explore the use of technology and support to help with this activity. Then consider your master data (vendors, customers, entity info), ensuring you have a clean source for this and are also aware of which systems will hold it.

Optimise your Contract Templates

Building on our second principle, optimising your contract templates is also an important activity to complete before implementing a CLM tool. Optimisation in this instance means:

Identifying all your existing templates;
Rationalising these where possible; and
Ensuring you have the most up-to-date versions with the latest standard positions and fall-back positions.

Optimising your contract templates has several benefits; it improves risk management as the most up-to-date contractual positions are included in templates as well as ensures you are taking consistent positions. It also enables business users to better self-serve as it's easier to identify the correct template. This has the additional benefit of reducing demand on legal due to requests from the business. Implementation time is also reduced as fewer templates will need to be configured.

Test Robustly

Adoption and use are not the end of the implementation project. Your team of internal Contract Management experts should analyze and test the system robustly to ensure optimal use. Even though an automated system like Pathways provides immediate and observable benefits over a paper system (or simply Word+Email), there are always opportunities for process improvement.

If improvement opportunities are found through testing, your team of experts can reconfigure the system based on those learnings. And then the process starts again: continue testing to ensure that the reconfiguration had the intended effect.

Ongoing testing will ultimately reduce risk by identifying and addressing problem areas. It will also cut down roll-out time for new use cases.

Report your success.

Once the implementation has occurred, it’s vital to look at how your team is performing against its goals. Whether you choose to start with a project where you can secure a quick win, or decide to tackle an issue that was problematic across the board, demonstrating incremental progress will help generate momentum for your new system.

Whatever the goal, you should work with your Contract Management provider to not only benchmark the initial KPIs identified in the planning process but also create reports to document how these KPIs have changed since the system was deployed. As those benchmarks evolve, it’s imperative to continue to showcase the success of the implementation, so stakeholders continue to see the value of the investment.

Consider getting started with Pathways, a solution built thoughtfully for growing companies that are looking for their first #contractlifecyclemanagement solution.
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