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Practical CLM 2023: Uncovering ROI

Let’s face it … no networking event for in-house legal professionals in 2022 has gone by without discussions on the topic of contract lifecycle management, or CLM. You might also have found yourself drawn to the enthusiastic feedback of a successful General Counsel. She implemented a CLM in late 2019 and it’s paid off, not only delivering automation benefits but also enabling a seamless transition to remote working. She underscores that while CLM implementations are undoubtedly a big transformation project, but, when weighed against the consequences of inaction, it’s a no-brainer.

But just as you are deciding to commit to a CLM yourself, you are reminded that your organization’s leadership will need something more concrete than a leap of faith and some form of qualitative argument to be convinced that CLM solution is a wise investment.

Can you imagine how easier it would be to demonstrate and measure the return on investment (ROI) if you could phase out your CLM implementation milestones around the business problems specific to your organization?

Introducing Impact First methodology

To help contracting leaders better identify the value in their contracts and follow through on unlocking it, we have embraced the Impact First methodology at smartContract in the pursuit of becoming a business partner to our clients to maximize the ROI throughout their CLM journey.

It means we’ll work with our customers to plan and deliver quick wins and define discrete milestones for their CLM journey that are relevant to their world. By offering this flexibility rather than applying ‘one-size-fits-all’ solutions in the name of best practices, we make it easier for stakeholders to consider the variables that they are familiar with and turn them into measurable KPIs that can be prioritized by value.

Take the example of one of our clients from the retail industry with over 10,000 employees in 13 countries. They elected to start slowly, leading with the migration of legacy paper documents to the contract repository and digitalizing only a couple of agreement types. As users started to use the system on a small scale, their knowledge of CLM built up strongly and tech-savvy employees from the procurement team became advocates for CLM after seeing firsthand how technology made contracting much more efficient and enjoyable. Next, they plan to standardize some major sell-side contract templates and automate their authorization workflow. Our client was able to demonstrate quick wins and the project continues to have consistent leadership engagement.

Following the Impact First methodology, we were not only able to address the known challenges for the client but also reveal several unarticulated needs which would have been overlooked by the rigid ‘best practices’ approach of looking only at benchmarking, processes, and systems landscape.

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Practical CLM 2023: Building digital maturity

Practical CLM 2023: Building digital maturity

By 2023, 50% of CLM implementations will fail to deliver expected benefits, Gartner had predicted back in 2019. And as we inch closer to 2023, the frustration with CLM does seem to be increasing even though the technology itself is evolving at a lightning-fast pace.

One key reason for the growing CLM pain is companies rushing to chase advanced AI use cases when they haven’t even addressed their critical business risks due to inefficient contracting. A company may store contracts on local hard drives and struggle to stay compliant with sell-side contractual obligations due to the sheer volume. In this scenario, it is prudent to focus on digitizing the lifecycle or at least the post-signature management of just a few contract types that can mitigate the risk, instead of building advanced drafting capabilities powered by AI.

In the pursuit of chasing CLM perfection, contracting leaders often forget the importance of quick wins that prepare them for their ambitious long-term goals while also reinstating the confidence of leadership and other stakeholders that the implementation is moving in the right direction.

Introducing Impact First methodology

With the understanding that a generic approach can not work for a function as complex as contracting, we have embraced the ‘Impact First’ methodology at smartContract, which gives our clients the flexibility to phase out their CLM implementation path in a way that complements their process maturity.

It means that we will work with our customers in consequent, small cycles to solve the most pressing challenges or start strategic initiatives that build CLM maturity while following a provisional roadmap for advanced use cases. This enables us to quickly solve critical challenges while building the foundation to align contracting processes with broader business objectives. For example, when COVID-19 led to a boom in IT services, the legal department of one industry giant got overwhelmed with contract requests. This was at the time when legal’s ability to engage and support was already exacerbated by an abrupt switch to remote working. In a few weeks, it became clear that contracting needed to be more streamlined and CLM was the obvious solution. The most pressing need was to digitize sell-side contracting, in particular, the process to execute MSA. Even though it is one of the most complex agreements signed by the company, smartContract was fully prepared with the technology and experience to support them. We were able to go live with the MSA within a couple of months and the average cycle time was reduced to just 1 week from 4+ weeks within just 6 months.

Consequently, we migrated all sell-side contracts to our full-scale contract repository with an ML-powered search engine that quickly gets a user to the information they need. Over the next quarter, the roadmap included automating high-volume, low-risk contracts like NDAs that engaged stakeholders from across the organization. Although these sprints led to some bumps along the path, the lessons learned enabled the IT services giant to digitize new contract types in a matter of few days. The company is now preparing for an ambitious use case that will enable cross-functional collaboration and insights with purposeful integrations.

Also Read: Practical CLM 2023: Breaking the change management impasse

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Practical CLM 2023: Breaking the change management impasse

Impressed by the flashy demos and marketing teasers of a CLM vendor, the General Counsel of a well-known conglomerate tried to impose the CLM on the company by a mandate. The expectation was that the tool will completely revolutionize their contracting process. But instead, chaos ensued. Why? Employees weren’t ready to change the processes and technology they have been using for years. None of the significantly affected groups like sales and procurement were represented in the implementation stakeholders’ team, which meant that the day-to-day challenges of many end users weren’t addressed. The project failed quite spectacularly with less than 25% adoption rate throughout its lifetime.

The lesson? Technology is not enough to drive effective transformation on its own, people should be at the heart of change and innovation.

But that’s not exactly news. Experts have been saying this for years now. What’s news is that the journey to successful change management, especially for solutions as complex as CLM, starts at vendor selection as most vendors are unable to offer the much-needed flexibility, which leads to irreversible problems down the road.

[smartcontracts-blog]

Practical CLM 2023: Breaking the change management impasse

Impressed by the flashy demos and marketing teasers of a CLM vendor, the General Counsel of a well-known conglomerate tried to impose the CLM on the company by a mandate. The expectation was that the tool will completely revolutionize their contracting process. But instead, chaos ensued. Why? Employees weren’t ready to change the processes and technology they have been using for years. None of the significantly affected groups like sales and procurement were represented in the implementation stakeholders’ team, which meant that the day-to-day challenges of many end users weren’t addressed. The project failed quite spectacularly with less than 25% adoption rate throughout its lifetime.

The lesson? Technology is not enough to drive effective transformation on its own, people should be at the heart of change and innovation.

But that’s not exactly news. Experts have been saying this for years now. What’s news is that the journey to successful change management, especially for solutions as complex as CLM, starts at vendor selection as most vendors are unable to offer the much-needed flexibility, which leads to irreversible problems down the road.

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WHY YOUR CONTRACTS NEED YOUR ATTENTION

The contracts dictate how we do business. They define our relationship with our customers, vendors and all other partners. They outline the terms and conditions – price, service levels, performance parameters, and the business and regulatory obligations.

The contracts are the blueprint for the business transactions and they are generally complex in nature. The changing market dynamics, globalization, new regulations, cost pressures, the need to maximize financial performance, and many such factors have further increased the volume and the complexities of the contracts. Unless we diligently control the contract generation, and regularly monitor and manage the performance of the contracts, the contracts expose us to legal, financial, statutory, and reputational risks. Read More...

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NEED FOR CLM IN BFSI SECTOR

Over the last decade, the Banking, financial services, and insurance (BFSI) sector has taken steps to improve customer service through efficient, easily accessible and digitally advanced products and services. This has happened through digital transformation. Remember the time when for anything and everything, you had to run to your bank and wait in endless queues. The banking industry has undergone a complete digital transformation enabling us, to complete all transactions quickly & swiftly. In fact, we are discouraged from visiting our banks anymore and everything can be done through mobile apps/ net banking. The speed with which technological changes have been implemented by BFSI industry is commendable.

However, considering the dynamic environment in which BFSI sector has to sustain and keep on their toes to meet the ever-changing statutory compliances, it is surprising to note that they are lagging behind in their lifecycle management of the contract processes. Contracts are the foundations of any business. They govern all business operations from standard rental agreements to complicated hedging contracts & consortium contracts. Contracts are also vital for regulatory compliance and risk management; as they provide visibility into every aspect of an organization’s operations; like where it is doing business, with whom, under what terms, and for what purpose. And the lack of attention of risk & compliance can give unwanted invitations of heavy penalties. Yet, it is sad to note that the majority of the BFSI sector continues to manage contracts in separate repositories – with contracts sitting in silos- either by geography, business function or contract type.

Contract Management Technology enables organizations to automate and streamline all aspects of the Contract Life Cycle to increase visibility, compliance and contracting velocity. Enterprises approach to contract lifecycle management also mitigates the risks of losing revenue due to lost time, money or potentially damaged reputation. With a contract management system, an organization can make an entire portfolio of contracts visible to all relevant stakeholders. The contracts are searchable & secure. This software covers the entire contract lifecycle from contract request, contract creation to contract renewal/ disposition. This can be used to monitor an organization’s contracting opportunities and risks. This insight can help management save precious time & resources and can help in better cash flow management. In fact, BFSI sector all over the world is adopting contract management solutions like smartContract to meet regulatory & compliance standards regarding contract accountability & transparency as it provides them the following advantages:

Effective monitoring of several high value contracts

With an enterprise approach to contract life cycle management, BFSI Industries can effectively manage & monitor their high value contracts. This enables them to gain access to a centralized contract management repository with a customizable dashboard giving a complete view of all contracts in one place. This tool also alerts the relevant stakeholders to efficiently manage any contractual obligations/ deadlines/ extensions/ renewals.

Efficient vendor management & control

Increasingly, a large number of BFSI players are outsourcing a large part of their work to third party vendors & are concentrating only on their core competencies. As a result, a wide range of services like legal, IT, auditing and many more is outsourced. Considering this industry deals with customer confidential data & is subject to heavy compliances, it is imperative that their vendor contracts are subject to heavy scrutiny. Contract management solutions like smartContract provide a bird’s eye view to all vendor contracts and a customizable third-party portal via which vendor can also view all their existing contracts with an organization.

Audit compliance

With Contract management systems; it is easier to meet statutory, regulatory & audit compliances at all times. This is because, with contract management systems, you can track & store all contracts during contract creation, negotiations and renewals/ dispositions. This enables organizations to maintain audit trails and manage real time compliance.

Enhanced contract visibility & management

Centralized contract repository like the one smartContract enables integration with existing processes & tools like ERP so that all the organization’s contract can be viewed at one single place. This integration also, translates into greater visibility and increased co-operation & collaboration between different departments & geographies.

Risk Mitigation

Contract Lifecycle management like smartContract can generate reports on contract performance and utilization, vendor risk management and cash flow management. It can also analyse historical data to analyse risks associated with contracts, clauses & vendors and can suggest alternative clauses, vendors etc to mitigate the risks. Considering the above; it is increasingly becoming imperative for BFSI Industry to adopt CLM & upgrade its contract management solutions not just to survive but to thrive in this dynamic financial market.

Follow the link to get your subscription now: https://smartcontractclm.com/smartcontract-clm-contact-for-demo/

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smartContract: THE NEW AGE CONTRACT LIFECYCLE MANAGEMENT SOLUTION!

Organizations nowadays are striving towards digitalization and getting rid of massive stacks of paper, endless rows of filing cabinets, and clunky, ineffective ways of managing. Every day a company deals in stacks of contracts and traditionally the management of these documents has been disjointed at best. Contract Lifecycle Management comes to the rescue by systematically & efficiently managing the contract creation, negotiation, execution, and analysis for maximizing operational and financial performance.

According to a recent survey, this need for streamlining workflows is expected to expand from $1086 million to $3167 million in the industry — more than tripling in value — within the next six years. The compound annual growth rate for the contract management solutions industry is predicted to be a healthy 16.65%.

We present to you smartContract – the complete CLM solution! It is an intuitive Contract Lifecycle Management Solution from SR Tekbox, which helps you automate your contract management processes. smartContract enables organizations to create, store, edit and manage any type of business to ensure transaction compliance for the terms agreed to in those contracts…Read More

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Digitizing Contracts for Growth in 2021

Contracts are the lifeblood of business. Irrespective of the industry, signed agreements are essential for properly defining relations and collaborations with customers, suppliers of goods, service companies, users, and employees – to say the very least.

Indeed, the effectiveness and ineffectiveness of your contract management workflow or processes can make or mar your business operations and profitability, either in the short or long term.

That’s why we bring you some top contract lifecycle management tips that help enterprises around the world meet their contract management and company-wide growth objectives. Read more....

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SmartContract is an automated contract lifecycle management system that is designed to streamline & automate your end to end contract management– from contract request, authoring, negotiation, approval to ongoing obligation management, reporting and analysis – leading to standardization, transparency, compliance and control over your contract management processes.