July 29 by Michael Dunne
Forrester Wave™ Research:
It takes considerable time, effort and sweat equity to produce a technology report that gives a succinct, thorough review of a market and then ranks the competing vendors. I know that from experience, having been a research vice president at Gartner. While at Gartner I was responsible for coverage of key sales effectiveness technologies like CPQ, sales contract management and price optimization.
The research process for these types of reports is very demanding, involving survey efforts with target vendors, reference interviews and briefings and product demonstrations. And then all that information must be distilled down to a set of conclusions that accurately represent market dynamics and the competitive landscape.
This effort is one reason why I appreciate and respect the research Andrew Bartels and his team at Forrester have published on the CLM market, entitled “The Forrester Wave™: Contract Life-Cycle Management, Q3 2016”. More importantly, I liked Forrester’s fresh perspective recognizing the need for supporting “all contract” types, in addition to addressing the two traditional segments of Sell-Side CLM and Buy-Side CLM.
I believe the market is moving beyond the stale conversation about just Buy-Side and Sell-Side CLM, which traditionally reflected the priorities of software providers, and not realities confronting enterprises in today’s business climate. Think about it, more often than not enterprises will need to manage a range of legally binding documents, for marketing agreements, joint ventures, NDAs, Intellectual Property and so on.
Moreover, CLM must be tied to other processes to empower enterprises to fully realize the benefits of such technologies. And, not just be some orphan app, consigned to a department, on a server, located in a closet, behind the printer (as I used to joke).
For example, for sectors where firms must “buy” in order to “sell” – when sourcing concerns need to be address in order to win deals – contracting functions need to be integrated with both sales and procurement tools, and possibly other apps (like budgeting). Clinical research organizations along with field services in the energy sector have these kinds of requirements.
So Enterprise CLM means addressing a broad range of contracting needs, and binding the contracting functions more tightly with relevant business functions to magnify productivity and competitive advantages.
That is why I welcome Forrester analyzing the CLM market from an “All Contracts” perspective on top of delving into the traditional subsegments of Buy-Side and Sell-Side CLM.
Validation of the Enterprise CLM Vision:
When it comes to supporting all contracting scenarios and process support, the report offers an insightful conclusion: “The end goal of a good CLM product should be to make the contracting process as effective and efficient as possible and to help contracts become the means for better business partner relationships.”
With the “All Contract CLM” scenario Forrester recognizes that “industries have a mix of buy-side and sell-side contracts and will accordingly want a CLM solution that can handle this mix of contracts.” What is interesting is the diversity of stakeholders for this scenario, with increasing importance given to the General Counsel, while the Chief Revenue Officers and Chief Procurement Officers are peers.
Sectors with these combined needs include High Tech, Consumer Packaged Goods, Industrial Products, Wholesale and Construction. But even in sectors that Forrester identified as “Sell-Side dominant” or “Buy-Side dominant” a mix of capabilities are still needed, like in Pharmaceuticals and Chemicals respectively.
Then there is process support. The report also noted the trend of integration with other systems, such as how “CLM systems intersect with sales force automation systems, configuration, pricing and quoting systems, and revenue management systems.” I see that trend accelerating as enterprises increasingly invest in full Quote-to-Cash initiatives.
Now a good example involves contracts and order management, when, “Order management systems for B2B need to have information on what the contract specifies should be sold to a customer, at what price, and with what service levels or delivery standards.” Similarly, contracting and quoting data can provide 80% plus of the needed information for downstream systems like Subscription Billing Platforms.
So the Forrester Wave report “looked for vendors that were adding advanced analytics and adjacent products like CPQ and revenue management on the sell-side, or eSourcing, spend analysis, and supplier risk and performance management on the buy-side.” I see this insight reflecting growing awareness for the need for Enterprise CLM capabilities.
Apttus Rated a Leader:
Then there is the evaluation of the vendors. Such research should accurately reveal who is actually accomplishing what in terms of the competitive landscape? The “ Forrester Wave™: Contract Life-Cycle Management, Q3 2016” looked at 14 software vendors based on a 28 criteria evaluation. The report reviewed the providers based on their current offering, strategy and market presence.
Each vendor was scored and ranked for three different scenarios: The “All Contract CLM” one that I like, but also for a “Sell-Side Dominant CLM” and for a “Buy-Side Dominant CLM” scenario. A scale of 1 to 5 was used, with the 5 being the best score.
Now I am proud to see this research rate Apttus a Leader for all three scenarios. This is great validation from a respected analyst firm on how Apttus supports Enterprise CLM requirements for the modern business world.
Here are some specific scores underpinning the three Leader ratings:
- – Apttus received a score of 4.03 in the “Current Offering” category for “All Contracts”, the top ranking among 14 vendors evaluated.
– The report noted that “Apttus offers a leading CLM product with buy-side and sell-side products. … Its product is very strong across all stages of the CLM life cycle”.
– Apttus received a score of 4.38 in the “Current Offering” category for “Sell-Side CLM”, the top ranking among 14 vendors evaluated.
Readers should think of how a modern CLM system will offer the flexibility to support their business models and processes – how such a system is versatile in automating Enterprise CLM grade requirements. So here are some key considerations for any future investment in a CLM system (i.e., what you would want to look for):
- – A Single User Interface – Improves usability and enables your firm to scale training across the organization
– Clause/Template Administration – Improves administrative usability and eliminate duplication of effort and versioning issues
– Single Repository– Enables efficient search and access to documents
– Universal Reporting– Makes it possible to report on anything involving contracting activity
– Process Optimization – Eliminates bottlenecks and delivers software tools that support easier process change and continuous improvement
– Risk Management – Provides comprehensive visibility into a company’s risk exposure
– Business Models – Support different ways of doing business, like empowering firms to more effectively sell to and buy from strategic partners, support transitions to subscription-based businesses and more
– Intelligence/Machine Learning – Exposes process and contracting data for analysis to generate data driven recommendations, say on appropriate clauses for specific contracts for specific types of deals.