CLM tech is very prevalent and powerful but are we asking the right questions before buying?

I come from a family of accountants. Every penny is accounted for and I’m not exaggerating when I say my dad reconciles our family accounts monthly. Mum is the exception – dad tried to get her to write down her expenses but quickly learnt he had better luck writing off the money as “wife expenses”. Rest assured when it comes to any “big” expenditures, be it holidays, vacuums or even water filters, a variety of factors are considered (often comprising of hours of research) before we invest. These little lessons have helped me more than I realise as now I spend my time helping companies do just that when it comes to investing in CLM technologies.

Companies often jump into vendor demos and issuing RFPs, telling consultants not to spend too much time assessing current practices. Whilst I’m a huge fan of pressing ahead and getting things done, I think there is certainly merit in pausing for a second and asking yourself what my dad has asked me a million times – do you NEED it?  My answer was always yes! His next question was - why?

Little did I know it but young me was learning how to build a return-on-investment business case without even knowing it! In the world of CLM, this is best broken down into two sub-questions, which everyone should consider:

1. What pain points you are trying to solve?

“People are unhappy with the way things are” is a response I often hear. As much as I would love to say that the secret to happiness is a shiny new CLM solution – it is not. We need to unpack the why behind the unhappiness. Some of the most common pain points I’ve seen include long contracting cycle times, unable to find executed contracts, resources stretched with too much work, contracting costs that are too high, unclear accountability for the obligations in the contract, lack of reporting, poor quality contracts, insufficient training, and sometimes people just don’t know where to start when it comes to creating a contract.

Really truly understanding these pain points is essential to then plan how to resolve them. It also really helps you set yourself some “success criteria” – if you can look back at the end of your transformation journey and say I’ve made all these things better, I’d call that a success!

2. Is technology the answer?

CLM technologies have revolutionised the way we do contracting. Capabilities that you see in the market now have come such a long way from five years ago. We see contracting effort and cycle times reduce significantly when companies invest in these new technologies.  

But before jumping to conclusions and saying “yes technology is the answer”, we need to understand what’s causing the pain points identified in your business. Let us take the example pain point of “unable to find executed contracts”. There might be multiple reasons for this. It could be that a) there’s no technology in place to actually store this in b) there is technology but it’s really clunky to use c) there is simply insufficient resources to store it in a tool d) there is technology but people don’t know it exists. Whilst most CLM technology might resolve point a) and a top market CLM technology might resolve point b) and c), no amount of investment in technology is going to resolve point d) – only an effective change management communications and training programme can do that.

Timing also plays a crucial role to knowing if technology is the answer. If people have experienced a lot of new technology roll outs lately (especially bad ones) they might be less likely to embrace something new. Even though you try and sell the message “this time it will be different”, change fatigue is difficult to overcome in a business.

Selecting a CLM technology that is right for you is a big task. Knowing your pain points will really help you when it comes to selecting exactly which CLM to invest in down the line - if you choose to do so. For example, knowing whether you need just authoring assistance vs an end-to-end solution covering the entire contracting lifecycle will really drive where you should be shopping.

But, just when I think that my dad’s interrogations are over, there’s still a final make it or break it question – HOW MUCH? I’m not going to go into the details of CLM costings – but what I will call out is that looking at the price tag of “license costs” is not the full picture. You need to think about business readiness costs (e.g. sorting out your processes, governance and templates), implementation costs, change management costs to drive adoption and most of all, operational costs for when it is live. You can work out now why making sure you have a very strong “Why I Need This” case is essential.

So to answer the question, “Do you need a new CLM technology”? The answer is probably.  

Most of the time it will eliminate the problem, if not, at least mitigate the problem. But sometimes, it might not really make the impact that you need. In the latter cases, consider if you can eliminate and reduce your pain points without the need for a new CLM – you will be surprised what an impact changing some of your processes or even issuing a little more guidance can do.

To conclude, if you are as lucky as my mum with her “wife expenses” account I’d invest now in a new shiny CLM – no questions asked – chances are, it will help.

But if you’re not, take advice from my dad and ask yourself – do you really NEED it? And if so, WHY?