Contract Lifecycle Management (CLM) is an essential process that organizations must manage efficiently to ensure they comply with all contract obligations and maintain strong relationships with their vendors and partners. However, CLM comes with several challenges that can impact the effectiveness of the process.

Based on our experience, the following are some of the challenges that organizations may face when deploying a CLM platform.

Complexity

CLM projects can be complex, which can lead to implementation difficulties and maintenance challenges, especially for organizations with limited technical resources.

Platform vendors and service partners often find themselves in two scenarios. First, instead of a walk before you run approach, they try to implement too broadly, which in many cases, leads to rollout difficulties.

The second scenario is created by platform limitations. Features needed to address complex use cases do not exist, so they look to modify the product, which typically increases cost and leads to project delays.

Impact: Platform complexity leads to longer project duration and more involvement from technical resources, resulting in higher cost, lower return on investment and dissatisfaction. As the project faces delays and cost overruns, the user community loses confidence, leading to adoption challenges.

Ideal Scenario: For the initiative to be successful, organizations must find a CLM solution that has sufficient features to suit their needs and yet simplistic enough so that they can it manage effectively. Ideally, standard features should enable configuration and not require customization.

Once the best suited platform is installed, the implementation team needs to show results early and on a consistent basis. It is best to tackle high impact and easy to implement projects first, so skill can develop on a more gradual basis.

Cost

CLM platforms are often expensive to implement. Subscription license fees have increased substantially over the last several years. Licensing needs to be a factor when estimating the cost for your initiative but it is as important to factor in costs for support, maintenance, and implementation. Organizations must balance the cost of a CLM solution with its benefits and determine whether it is a worthwhile investment for their business.

Impact: Often organizations select their CLM platforms based on which might be considered the leader at that moment. In many cases, higher cost platforms don’t provide more features than others than lesser-known competitors. All things considered, it is common to see organizations overspend for the platform, only to use a small percentage of the features offered.

Ideal Scenario: Organizations should conduct a High Point Study to help fully understand how CLM will best work for them. Understanding the various use cases, workflows and related ideal state, teams will begin to recognize which features are most important to be included in the platform.

From there, product selection criteria can be established, which will ensure that the most important features are available from the competing vendors and the organization does not overspend.

Innovation

Larger CLM vendors may be slower to adapt and innovate in response to changing market conditions or customer needs. While smaller vendors may be more nimble and able to innovate more quickly.

Impact: CLM is evolving rapidly, mainly due to the struggles that many organizations are experiencing. If the chosen vendor is not evolving at the desired pace, the common challenges will remain.

Ideal Scenario: As part of the platform selection criteria, organizations should include how willing is the vendor to quickly implement functionality that may be missing or limited.

Customer Service

Some CLM vendors may not provide personalized customer service and support, which can be a challenge for organizations with unique needs or challenges.

Ideal Scenario: As part of the platform selection criteria, organizations should include how dedicated the vendor is to providing personalized customer service and support.

In conclusion, organizations should carefully consider the challenges of CLM and find a solution that fits their unique needs. Choosing the right CLM platform can help organizations streamline their contract management processes, reduce costs, improve compliance, and improve efficiency. It is crucial to allocate sufficient time and resources to first select the right CLM solution that possesses the required features and is easy to implement.