Contract Management Software Implementation Challenges


What are the implementation challenges for Contract Management Software?

 


 

What are the main features of best contract management system?

Implementing Contract Management Software - The Common Challenges

After much confusion and loss of businesses through bad business practices involving contracts, most companies now swear by contract management software. The latter is an application that helps a company through the various stages of binding contracts and ensures that the contract is valid and will work for a business and its suppliers, customers or employees.

The businesses landscape is forever changing, and this also means that companies should try and keep up with the evolving landscape, which means they may have to embrace new technology in the process of selling their products or services. Businesses use contract management technology to standardize, streamline and automate contract initiation, creation, negotiation, execution all the way to expiration.

Importance of Contract Management Software Implementation

While the importance of contract management software is not lost on most companies, they usually get disappointed at the implementation stage. A reason for this could be recruiting people who are not skilled enough to ensure that the software is working as promised. Another could be using subpar software that will end up becoming more of a liability than an asset. 

To get the best contract management implementation possible, it is important to be aware of the most common roadblocks to a successful system roll-out, as well as how best to avoid them.

Challenges of Poor Contract Management Software Implementation

Excluding Stake holders from CLM system selection

Many organizations start implementing their contract management software without including informing the relevant stakeholders. If you do not inform the relevant stakeholders, the project can be quite overwhelming. For the project to be successful, the manager will need input from everyone that is involved in the lifecycle of the contract. You can avoid many starts, stops and meanderings by bringing everyone on board. You should ensure that you have the right personnel for using the software when developing the idea to implement the software in your organisation. While coming up with strategy, you should gather everyone and conduct a product demo and emphasize all the must-have capabilities to benefit the businesses. Larger companies may need a full-time systems administrator to upload new templates for the contracts, update user information, answer user questions and oversee the database. Smaller companies may just need project managers to monitor the implementation of the software. You should include people with experience in contract management as well as those that are technically and IT –inclined. Anyone with software experience is eligible for the training as well. When all the stakeholders are aware, the team will be aware of the policies of the company regarding preferred platforms and security. Issues arising from compatibility will be avoided as well when it comes to the various product releases within the prevailing technology stack. 

Working out Pain Points when It is too Late

It is always advisable to brainstorm some of the known issues that are found in the lifecycle of a contract before embarking on the implementation process. Some companies skip this step only to encounter them when they are actually implementing the system. While the manager might be able to address the issues arising, it will take longer than necessary to complete the implementation processes. This inevitably translates into higher costs for the company that is trying to have the new system as part of its processes. Ensure that you have called all the groups that will participate in the different stages of the contract to help in working out the gaps that are in the process. When you are aware of the issues inherent, you will find the solutions to the problem. The main question you should ask are the tasks that you need the system to take up. When addressing the questions, you should ensure that the stakeholders illuminate the kind of data fields that they want to include. You should also document the current process flow along with the input of the team. When the implementation team finally gets the notes, they will be able to translate the information quickly onto functionality in the system. 

Over-engineering Your Approvals Process and Alerts

The advanced process of CLM solutions often provides unlimited granularity in their notifications and process workflows. Very few businesses attempt to push the limitations of the systems. In most companies professionals will become overambitious after using sophisticated alerts, email notifications as well as great visibility. They often over-engineer their processes, and this causes many e-mail alerts that may not be as meaningful. This can lead to users becoming desensitized to all the email alerts and at the same time ignore the important ones. They may ask the contract management software administrator to go ahead and turn them off. To avoid this problem the people implementing the process should align their alerts to their signature process. This means that if a person is required to sign a particular paper contract, they will get an alert. Alternatively, the alerts can be directed to some people such as those in the legal departments who will later forward them to the relevant users. This ability is so valuable that users should be able to consider the best way to engineer it to its full potential. Being able to control notifications and alerts will influence users to adopt the system and use it successfully. Cleaning documents and Standardizing Contract Templates after Implementation Given the benefits of contract management software, most companies will want to finish the process as fast as possible. Unfortunately, some companies have had to stall their projects because they made critical decisions concerning standard language as well as the terms of the implementation on-the-fly. In most cases, businesses that operate for many years without contract management software lack consistency in their contracts. This goes from entire templates to details such as pagination, fonts and terms. You should consider such features of contract standardization and generation upfront while accepting that some documents will need change at the same time. You can easily decide the type of data to include in the creation of data field by looking at the blanks in the existing contract. In most cases people note service or product types, amounts, dates and parties. You will also need to include the fields in the CLM system as well. It is also good to consider data that will be used for metadata fields as well as reporting considerations. Sometimes businesses may need to get information about a contract when it is not in the contract. Such information includes the people who worked that particular contract and the person who requested the contract. Adding more fields will make it easier for users to get the information immediately. Inevitably, some documents may require some changes so as to be compatible with the new software. Although this will be different from the norm, you may save much time if all your documents are optimized and standardized for all the stages in the lifecycle of the contract. 

Decentralized Legacy Contracts

It is always important to ensure that you can see all of your legacy contracts before making decisions enterprise-wide. Most organizations have contracts with other entities in formats such as Word, old file cabinets and PDF. You can make your CLM system valuable by centralizing your contracts. Put simply; it is very difficult to manage contracts that are not visible. You can manage contracts holistically by cataloguing and capturing al legacy contracts. Having the relevant information will also help you make decisions for amendments and revisions that will assist in managing rewards and risks. Legacy contracts may not be of interest to all companies, but they can be significant in some instances. Most companies avoid this kind of consolidation because it was time –consuming costly and a manual process. With proper implementation, you will be able to see all your contracts, extract and map the metadata for better management. Since the process is automated, it will minimize resource allocation and speed up your return on investment. The effect on the bottom line of your organisation is immediate while the opposite is also true. 

Rushed Approach to Contract Management Implementation

Most experts will advise that implementation of the contract management software should be done in stages. This will help in delivering wins earlier in the process build momentum and improves the chances to succeed. Unfortunately, some companies do not see it this way and attempt to do a big bang implementation that often backfires on them. This is because in their haste to have the system up and running; they leave exasperated users in their wake because they do not get a chance to change and make use of the functionality of the new system. It is advisable to use the phased approach which will not leave anyone behind and which will lead to higher rates of adoption. You can demonstrate ROI faster with a gradual approach as well. The phased approach may include segmenting the whole process according to the contract. You can start with NDA, and then go to vendor agreements, employee agreements and so on. Another benefit of this approach is that you will benefit from feedback from users which will help you work better in the next phase. Using the feedback, you will influence the subsequent stage and adjust your system to increase its usability and its value. When phasing your system based on its functionality, you can start with contract records abilities like critical data fields and workflow process. Data entry is a good starting point as well. Once the user is comfortable with the first phase you can introduce the approvals functions. The next step could be drafting capabilities followed by other capabilities for the user. Basing the Implementation Process on one incident instead of the Entire Process Some companies implement their contract management processes based on a particular incident instead of looking at the bigger picture. An example of such incidents is an auditor coming to audit, but there is a missing document. This will throw the entire company into a frenzy trying to come up with the missing document. It is especially bad if everyone is worried the implications of the missing document. Having learnt from the incident, the company will go on and implement a system that will ensure that their contracts are kept where they can be found easily to prevent such an occurrence. When you buy and implement a system based on a particular incident, you will not cover the other pain points that come with the other process which means that there will be gaping gaps. Such incidents require the company to invest in multiple systems to manage the various parts of the company’s workflow. To avoid such a situation from coming up, you should document the goals of the company as early as possible. The following step will be to create a business case that will consider every pain point in the process of implementing contract management software. Implementing a comprehensive solution will ensure that you are able to prevent many problems and not just one problem. Some issues may become widespread as compared to others but if you know how to utilize the software in different ways can help you use the software to your advantage. 

Use of Unique Contract Management Software

Some companies leave the entire process of implanting their contract management system to their vendors. While this works for some businesses, it may fail miserably for others. A reason for this is that there is no standard contract management software implementation process. You are in trouble if your vendor is not aware of this fact. Your systems can be designed to cope with your business or the industry in which you operate. Your vendor should, therefore, work with you to come up with a unique system for you. While basic contract management systems may include some of the best business practices, some large organisations have different ways of administering and monitoring their contracts. 

Compromised Data Requirements and Processes

In some cases, a vendor may compromise the data requirements and the process of a company so that it can fit a particular contract management solution. This is obviously not right because no one wants to work with compromised data or processes. It is, therefore, imperative that the vendor finds a flexible solution that will adapt to the processes of your company. You may get problems at a later stage of you use an application with its own process. To avoid these issues, you should always ask the vendor about the length of the implementation. If they have very short estimates, you should know that the seller is most likely interested in selling software and solving problems for their clients. It is also important to as for qualifications and resumes from the people who are coming to implement the contract management software in your company. This is important because they will be working for your organisation for a long time and hence you want to ensure that they can implement the software the way you wanted it while ensuring that the solution takes care of all your needs. 

Fail to Work with a Long Term Strategy

When implementing a contract management solution for a client, many people may only think of the short-term. This can work against is, and the best solution in such instances would be to use integrated systems. The latter should be able to give the company some easy wins for both the short term and the long term. 

Privacy and Security

When implementing the solution, most people not factor in the issue of privacy. This can expose the company and make it vulnerable to competitors and people who may want to use the information and data to the detriment of the enterprise. Before implementing the software, you should have the IT and legal departments sit down and together choose the software that will meet the needs of the company when it comes to privacy. They should look into the policies rules and regulations of that industry to ensure that the privacy of the company is assured. 

Compatibility Issues

Some companies fail to take into consideration the fact that employees use different kind of devices in their work. For instance, a sales executive may need to work on the go and hence may choose to work on their tablet or smartphone. This can leave out a significant population of the workforce and render the software redundant. At the implementation stage, the expert or the teams should check to ensure that there are issues with compatibility and that you can use it on any device. Towards this end, the IT director should ensure that they have tested it on laptops, smartphones, and other devices that the employees may use for their work. 

Performance Management

Some of the teams tasked with implementing contract management software never think of the need for efficient mechanisms to determine how the implemented software is performing. This means that they will deal with problems as they arise instead of proactively dealing with changes to a contract. It is important to have performance in mind as you implement the software to ensure that it does not present a problem to the clients. 

Leaving Out Important Features

While it is true that contract management software is not standard, some features are quite necessary for any application. They are certainly necessary for their function. Some of the features include the ability to integrate with other systems that the organisation is using. Other important features include email and calendar, and they are very relevant to contract management solutions. They, should not, therefore, be left put. You should also check to find out if it has the ability to automate reminders. A proper solution should be able to help the company in achieving financial probity, meet all statutory obligations as well as improve accountability and transparency. 

Using Pilots

Most people will start by using pilots before going on to implement the real contract management software. When you roll out your contract management system, with a pilot, it could harm your business in the process instead helping it. You may find yourself having to start from scratch instead of saving time and effort. You might need to conduct additional sessions as you carry out your pilot as well. While pilots are instrumental in providing tangible metric for the success of the product, they often slow the process of implementation significantly. This raises costs and often delays the date to go-live goal. Additionally, if the learning of the system frustrates people in your goal of excitement and acceptance will be counteracted. 

Checklist to Ensure Successful Contract Management System Implementation

Contract Templates and contract Creation System

Before embarking on your contract management software implementation, you should track down every contract template, and this includes order forms, MSAs, NDAs, addendums and so on. Your legal team should be on hand to update and approve the various versions of all the documents that you have earmarked for implementation. It is also advisable to review you templates and comment/highlight the sections, paragraphs and fields that are typically modified or filled in during the preparation process of the contract. You should also determine if the data can come from CRM system, user input or a rule of the business. In case you want to create templates from CRM, you should ensure that you have engaged the entire team that manages the CRM. They will help in identifying, mapping and potentially creating the relevant fields. 

Contract Routing and Approvals for Workflow

Map out the process for each kind of contract and choose the functional areas of the organization that need to be reviewed. These include operations, sales, legal, professional services, finance and legal. To ensure a repeatable and efficient process, it is important to examine the order of their approval as well. Remember that you will have to assign a particular task for a user to complete in all the functional areas. It is also crucial to think about how you may want to notify your users when they have a task to complete, the service level agreements (SLA) they need to complete the tasks and to remind them when they reach their SLA. It will also be necessary to remind them when they exceed their SLA and what the functional areas are supposed to do when you assign the contract. This is along the lines of editing, approving, rejecting, canceling, choosing the next reviewer, send for signatures, send externally for redlines and so on. 

Contract redlining and Signature

When sending documents fir redlines, you should think of the sender and how you will ensure it reaches the customer for redlines. This should be in a way that will allow the returned contract to be inserted in the contract process quickly for more approvals, reviews and redlines. To help with redline reviews, you should think of comparing several versions of your document so as to highlight all the changes made by the customer. This will help in avoiding overlooked edits and reduce any reliance on your clients by use of tracking changes. It is also important to evaluate the way to execute contracts and the means of sending paper copies according to your industry. You should think of process efficiency as well by using the main electronic signature vendors and the manner in which they can be incorporated as an extension and the culmination of the contract approval process. 

Contract Repository and Maintenance

It is always imperative to think about the security of the documents during the implementation process as well. In this regard, you should keep the documents where they can be easily accessible to those who require them but at the same time far away from people who do not need them. You may have to use folders and hierarchical arrangements for the documents to make it easy for people to get them when browsing. You could also tag them with relevant information to help when searching on ad hoc basis. Contract documents also entail critical information or terms such as the type of contract, effective date, End/ renewal date that is relevant to the company. The information will be significant when searching for certain contracts with particular terms, for reporting aggregated contracts to see filtered listing or complete list of contract terms and their terms. You should, therefore, determine the key terms so that they can be captured as attributes associated with the documents or as tags separately. This will help in managing active contracts. You may need to consider a single repository depending on your goals and the way you have stored your contracts about your software. Some people may have to keep all contracts in the same place and legacy contracts to be in their current location. Alternatively, you could add active contracts and other contracts to the new system. If you choose any of the above options, you may have to consolidate and prepare legacy contracts into an acceptable format for your vendor. It should also be easier for your vendor to tag and load it for you t make it possible for you to have one source of your contracts. 

Contract Management Implementation rollout, Maintenance and Adoption

You may have to approach the implementation of your contract management software as a project with a start a middle part and an end. Apart from the preparations needed to automate, standardize, and organize contracts, you may need to prepare to manage the project with all its accoutrements. You should, therefore, recruit the best subject matter experts (SME) for the different functional areas to help with the requirements, and testing from daily responsibilities. This should interface with your implementation team, choosing training approaches and needs so that the users are well prepared for the new software, outlining new procedures and policies to apply the correct management for your contracts. This applies to the other business or communication readiness practices adopted by your organisation. When you implement your software, you should also discuss the person who will own the software, who will be in charge of its maintenance, support, and its enhanced post-implementation. Your users should adopt the system and use it, or the implementation of the software will be an exercise in futility. Both Teams should be Prepared More companies will start implementing contract lifecycle management (CLM) solutions so as to streamline processes in business, gain compliance, improve profitability and eliminate risk. As you work to implement contract management software in your businesses you should also remember that it is wise to use the proper building blocks. This will ensure that CLM implementation does not result in issues such as protracted contacting cycles, poor adoption of the system and exorbitant cost of projects. 

Successful Contract Management Implementation

Every company has its own metrics of determining a successful contract management implementation, but the most of them agree that system adoption is the foremost measure of success. You know you are successful when your system is adopted, and people can use it confidently and frequently. It is important that the individual in charge of the project defines the success metrics of the implementation project and communicates them to other members. Metrics of Success in Contract Management Software Implementation Among the metrics that determine success in contract management application include average cycle time for the contract. There is also headcount within the process of contracting and reporting, spend of outside contractors in the process of contracting, the contracts with non-standard terms and language as well as the number of hours logged by auditors. It is also important to define soft return on investment goals. In businesses circles, soft ROI goals mean the ones that are not easy to quantify. The goals should be communicated to all team members who will be working on the project. All team members in the organisation should be aware of how easier their lives will be after the implementation of the system. They should also be aware of how it will help the entire organization. You will be able to keep the project on track if you have clearly defined your metrics and have communicated them to the rest of the team members. You will also be able to decide on how the solution will be configured and demonstrate how all the efforts put into the project have been valuable to the organisation.