September 1 by Prashant Dubey

Contract Management

“Mastering Contract Lifecycle Management” is a 15 part series written by Prashant Dubey, CEO of The Sumati Group, dedicated to expanding your mastery of Contract Lifecycle Management (CLM). The series is divided into 5 parts and encompasses the entire lifecycle of purchasing a CLM solution, including: the research phase, launching your CLM project, implementing the key building blocks, strategies for driving user adoption, and continuing down the road to success. Enjoy!

Like Parenting: A Labor of Love – and that’s OK!

For this final post in the 15-part, Mastering Contract Lifecycle Management series, I thought I would write something cathartic. Summer is coming to a close, I just experienced totality: my oldest is back in college and my two younger ones are about to start high school and middle school respectively – I feel like I owe myself a purifying moment, or two.

I hope I have made a good case over the past 14 blog posts to convince readers (thank you for being readers) that I really like contract management as an intellectual domain. It’s always changing, there are a lot of smart people working in the field and I have the honor of leading Sumati, one of the fastest growing and most respected contract management technology services companies in the market today. Thank you, clients, colleagues, and partners.

 

Contract ManagementThat said, I don’t place my head on the pillow at night and say to myself – “Prashant, you could have run that meeting a little better today.” Rather, without fail, my nightly introspection goes something like this – “Prashant, you could have handled those four parenting moments better today.” Yes, it’s true, being a parent is more meaningful to me than being the CEO of Sumati.

If it’s Hard, it Must be Worth Doing

At risk of metaphor confusion, let’s think about the gym for a moment. I’m more of an interval training guy (meaning: I like the intervals between exercises). My kids lecture me that I need to do 30-40 mins of cardio every day so my heart is healthy (I think they want me to be around for a bit). Cardio is hard – mostly because it’s boring (for me) – so, with my kids goading and the fact that it’s hard, it must be worth doing.

Parenting is also hard. There is no playbook (sorry, Dr. Spock), there is a lot of volatility, and I need to handhold my users (kids) through my own dynamic approval workflows (you need to have your room clean young lady, before the sleepover). The closer I am to my kids the harder they need to push away when they carve out their own identities. That’s hard too. Sometimes, I misunderstand the user scenarios and configure a workflow that doesn’t meet the need – I think my son would love to hang out with me on Saturday night for a movie before he connects with his friends. So, I buy some tickets on Fandango. Sadly, he already had plans to see the same movie with his friends. So, I say they can come along too. Not the user scenario he wanted.

Contract Management is also hard. It’s volatile, unpredictable, stakeholder expectations are variable, budgets are always enigmatic, technology doesn’t do what it was marketed to do and gosh darn it, users of a CLM system don’t just blindly adopt the system on your word alone.

Contract management, like parenting….and yes, cardio, is hard…therefore must be worth doing.

Technology Sometimes Makes Contract Management Harder – Especially Artificial Intelligence

As a parent, I am subjected to Artificial Intelligence when my children are presented with buying options based on earlier internet searching. I need to counsel them that they actually don’t need what is being suggested by Amazon, despite the fact that SpikeBall is a totally cool game (we ended up acquiring it).

One of the most disruptive forces in legal technology (and contract management) today is Machine Learning/Natural Language Processing/Artificial Intelligence. However, this is not because of the technology itself but of the purported promise of the technology.

Artificial Intelligence (AI), that purports to “assist lawyers” in decision making actually creates tumult when lawyers feel they are being replaced. On the flip side, senior leadership gets enthralled by headlines and expects AI to deliver lower cost, accelerated cycle times and boost the morale of lawyers. I have seen first- hand how difficult these dynamics are to manage for legal operations and other leaders who own implementation of a contract management program. These champions need to dispel the myths while also appearing innovative. That’s hard.

Contract ManagementAI is especially Pernicious in Contract Migration

There is no place where AI creates more tumult than in contract migration. Intellectually, many companies think, driven by advanced marketing, that AI based contract migration technology should enable them to load up contract documents into software, have the software organize the documents, extract meta data then seamlessly import both into a CLM system. Perhaps someday – but not today. There are no “flawless outcomes.”

 

Note: Alexa does not flawlessly deliver a veggie burrito from Chipotle using Postmates – so when I try to act hip and millennial, it’s an epic fail (nice one, Dubey).

Professionals experienced in contracting know that fully executed contract documents go through a nuanced (deal specific, relationship specific, person specific) negotiation that results in…

  • an end document that may be a master, amendment, SOW etc.
  • with a name that likely doesn’t represent the true contents of the document
  • provision language that deviates from the starting template
  • and may not even resemble language ever used before in the company

Further, most companies struggle with situations such as:

  • multiple contracting entities within the company contracting with the same counter-party
  • superseding agreements that render the preceding agreement inactive or outdated
  • contracting parties in the contract document that are dramatically different from what is listed in a customer or vendor master in a financial or CRM system

To apply AI to these raw documents and expect a “flawless outcome”, or even an outcome that is cost-effective and fast, is not realistic.

Now, AI can be quite useful. However, the message here is – technology like AI often makes a contract management initiative harder, not easier, due to unrealistic expectations as well a cost model that has not fully matured to fit itself into a (necessary) human decision- making workflow. AI is hard – yes – therefore it is worth exploring.

If you don’t give up on Alexa, eventually, through a lot of training and human intervention, that veggie burrito will arrive, with the right ingredients and an optimal diameter.

Do it Differently Than You Did Before

It will be better. Trust me.

One of my children has been playing tennis since a very young age (he’s almost 16 now). A couple of years ago, a tennis coach discovered that his grip was all wrong (guess who taught him that?). As a result, he was hitting a lot of tennis balls into the net and also not generating as much power as he could. So, the coach changed his grip.

User adoption was painful. Initial resistance, a lot of second-guessing, frustration, and then, eventually, success! He has a new grip and new forehand, and I can’t get a set off him. The law of unintended consequences has a way of manifesting in these situations.

In implementing a contract management initiative, the biggest challenge is to get participants in a contracting workflow to do things differently. Intellectually, everyone knows that a data driven, fact-based, technology enabled contracting process is better, but it’s still different. Despite all the inefficiencies of the current process, lawyers still know they can be home by 6:30 to have a family dinner or catch their daughters’ gymnastics performance with coach Boris. So, why should they change?

The hardest part of any CLM initiative is the user adoption portion. Getting someone to change, despite the fact that the change will be good, is really hard. As such, it’s worth doing.

The investment in increased user adoption has a significant ROI. CLM software companies have an incentive to support clients’ user adoption initiatives because come contract renewal time, the CLM company wants more, not less user licenses. Executives have an incentive to support these programs because without users changing their practices, there is no new business process. Once users adopt the processes and technology of a new CLM initiative, the new process becomes…the process. Metrics and measurements are easier to gather – which enable easier justification for increased funding. This is all hard stuff, but again, worth doing.

It Doesn’t Stop With the Launch

Contract ManagementMy son is off to college and just started his second year. He’s technically an adult – because he can vote. However, a week after I dropped him off 1,000 miles away from home, I happened to be in the area for a business trip (really, it was already planned). That was serendipitous, because my son, who plays on his college soccer team, forgot his soccer cleats. So, he asked if I could bring them to him. Of course, I’m sure he planned all this so he could see me a mere week after I dropped him off (paper will hold anything I put on it).

In any case, he can vote but I think he still needs me…sometimes.

After a CLM initiative is launched, the initiative leader actually needs to exercise what is called…hyper-care. Users will face new workflow, new measures and expectations and of course, new technology. Putting in place a consistent user support model that is cost effective and more than just password resets – is hard.

However, many proven practice models have shown that a well-established and operated user support process is directly correlated with long term program success.

Contract management, like parenting, is worth doing, and doing, and doing…

The “Mastering Contract Lifecycle Management” series was written by Prashant Dubey, bestselling author of The Generalist Counsel and CEO of The Sumati Group, which is the Apttus premier contract migration and CLM Managed Services partner.

Learn why the Contract Lifecycle Management (CLM) Market is growing and why Forrester rates Apttus a Leader in CLM. Download your copy of the Forrester Wave report today!

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