November 13 by Mauro Caputi
How do you manage your business’s contracts? Do you manually create and manage them the old-fashioned way? Or do you use best-of-breed Contract Lifecycle Management software?
Contract Lifecycle Management (CLM): the proactive, methodical management of a contract from initiation through negotiation, award, compliance and renewal.
Many companies forget about their contracts once they are executed, which can lead to missing contractual obligations and possibly ruining a business relationship. To mitigate these risks, implementing the best CLM software for your business and working with a knowledgeable provider is absolutely necessary.
Switching Contract Lifecycle Management Providers
If you’ve been considering switching your CLM provider, it might be time, but don’t dive into the change without due process. Here are five keys points you must consider before switching CLM providers and reinvigorating your Contract Lifecycle Management program:
1. Build momentum:
It’s easy for a Contract Management deployment to become stagnant in its early phases. Avoid this and build momentum by utilizing new tools and technologies such as machine learning, artificial intelligence, and robotics to move beyond your current stage in CLM deployment. This doubles as digital transformation for your business.
2. Adopt during deployment:
Deploy the new CLM software in phases and have the users adopt the new technologies during each phase. These technologies will help your team save time, become more efficient and eventually realize a maximum Return on Contracts (ROC). Plus, incremental learning will help the users understand the new processes better over time.
3. Clean and analyze your contracts:
Before you migrate your data to a new system, extract, clean and analyze contracts. Don’t just move the old data into a new system. Having clean data increases the adoption of the new system while analyzing your contracts for insights provides stickiness for users to keep coming back.
4. Learn from prior experiences:
How has your team managed contracts over the years? What has worked and what hasn’t? How has your recent CLM increased contract visibility and compliance? How has it decreased risk? What needs to be improved further in the new CLM? Take the opportunity of implementing a new solution to enhance and improve processes from knowledge gained over time.
5. Think about future compliance:
Compliance is only getting more complicated as time goes on. Don’t slog through current compliance issues. Dive into maintaining current compliance and look into what recent and/or new compliance issues might bring. A perfect example is the recently enacted ASC 606 (US) and similarly, IFRS 15 (Europe), which provides a new standard for recognizing revenue by requiring that revenue for each obligation within a contract be attributed to that obligation, regardless how it is bundled in the sales process. According to this regulation, every separate and distinct obligation has to be considered in revenue recognition, including legal terms. As a result, legal terms can now affect the deal value if they create or modify the performance obligations. This then can either slow or speed up revenue recognition for the entire contract which requires much more detailed collaboration between Finance, Sales and Legal, adding new visibility, information, notification and/or reporting requirements to the contracting process.
Switching CLM providers doesn’t have to be complicated. Mainspring Consulting Group can lead you through the process, from strategy to planning and preparation to implementation.
For more in-depth tips on switching CLM providers, read our white paper.