Has your corporate legal department been struggling to figure out ways to cut down time spent on contracts, reduce the average sales cycle and find a better way to manage buy-side, sell-side and corporate contracts? Contract management platforms offer the ideal technology to help on all counts.
You may be at the stage where you’re considering contract lifecycle management (CLM) technology to help you reach these goals, but are unsure about how to proceed. You’ve likely already heard and read about all the benefits of using a premier CLM solution. After all, it’s a technology many corporate legal departments have prioritized, and you’ve probably already reviewed resources or spoken with vendors. We’d like to take a different angle here and tell you about four common mistakes to avoid when evaluating a CLM solution.
Four Common Mistakes Encountered When Considering A Contract Management Platform
- Believing That A Cutting-Edge CLM Solution Is Not Worth The Cost Of Investment.
For several years, the new paradigm has been to do more with less money and fewer resources. Technology has increasingly played a prominent role as legal operations focus on achieving objectives with “less.”
Driving efficiencies and controlling costs in the legal department are being borne, to a significant degree, by well-chosen technology solutions and legal operations managers who understand this are taking action. For example, Onit’s contract management platform streamlines the entire contract lifecycle. It provides ease of use for all parties involved while reducing risk in the process and enables departments to save an average of 9% annually, reduce the average sales cycle by 24% and reduce by 20% the average hours spent on contracts.
- Assuming That Staff Reduction Will Be Possible With Your CLM Implementation
It’s true that a good CLM offering streamlines the entire contract lifecycle. It provides ease of use for all parties involved while reducing risk and enabling departments to save valuable time. The ideal contract management platform also makes quick work of many processes, relieving staff of repetitive and mundane tasks.
Having said that, it is easy to fall into the trap of believing that you can save even more money with staff reductions. It’s a better strategy to remember that while you’re automating many processes and some staff functions may change or even be eliminated, staff reductions are usually not the best option in many cases.
- Forgetting About AI When Selecting Your Solution
Many legal departments already know how well CLM products empower legal and business teams with an enhanced contract management process. Some key benefits are conditional contract generation, MS Word integration, document management, secure collaboration and eSignature integrations.
With all that, what could be missing? Integrated artificial intelligence.
For example, in the pre-signature contract phase, the AI engine provides a first-pass review of the contract and annotates it based on your company’s checklist, playbook and information learned from AI models. By allowing a lawyer to focus on the medium- to high-risk areas, your legal team can reduce contract lead times, automate guidance and proactively address common pain points in the legal workflow.
In the post-signature contract phase, AI-driven data extraction allows you to complete projects at scale and at a fraction of the time manual processes take. Additionally, you can gain powerful insight from your contracts in real-time when coupled with a contract lifecycle management solution.
- Implementing a CLM Solution That Doesn’t Have All The Bells And Whistles
You’ve gone through the vendor selection process and are ready to implement your new CLM technology. It’s zero hour, and one of the staff asks you if the solution provides for automated risk mitigation – which somehow didn’t come up during the selection process. You learn that this system doesn’t have that feature, and now you’re wondering what other vital elements may be missing. Depending on your specific needs, here are five other features that are must-haves:
- Conditional Contract Generation: Automatically generate a contract with appropriate clauses based on a robust rules engine and contract metadata.
- Routing and Approval Workflow: The ability to design and build simple to complex workflows to generate and route your contracts.
- Obligation Management: Give your users the power to manage and measure tasks or milestones related to compliance.
- Clause/Template Library: Manage and maintain contract clauses and templates in a centralized and secure cloud-based location.
- Partner and Client Self-Service: Provide partners and clients an easy-to-use portal to request, submit, or create contracts.
It can undoubtedly be overwhelming trying to determine the best route to take in your digital transformation project. There are contract management platforms out there for practically every budget – meaning there is no longer a good reason not to take advantage of cutting-edge technology. Still, the best advice is to go into your implementation with realistic expectations, a good understanding of exactly what your department needs and a plan to avoid common mistakes.
If you’d like to learn more about contract lifecycle management, here are some additional resources:
- How Does A Contract Management System with AI Improve the Way Lawyers Work? Let’s Look at the Numbers. [Infographic]
- AI-Based Contract Management: What to Look For and How to Get Started
- How an AI-Powered CLM Tool Pays Off for Corporate Legal, Sales and Procurement
- The World Commerce & Contracting, the only global body promoting standards and raising capabilities in commercial practice.