Introduction
Legal teams today spend hours every week managing contract requests, tracking down the latest versions, coordinating with multiple stakeholders, and ensuring timely signatures. The cost of this chaos is missed deadlines, compliance risks, and lost revenue.
This phenomenon is driving modern businesses to adopt digital Contract Lifecycle Management (CLM) software. But adopting the right tools is only half the battle. The right implementation is equally critical in making it work for your organization.
In this guide, we'll walk you step by step through implementing a CLM system to truly streamline your contract process and deliver results.
What is a CLM system?
A CLM system helps businesses streamline their contract management process, improve compliance, mitigate business risks, and promote cross-functional collaboration. Modern CLM systems offer robust capabilities, such as automated contract authoring, customizable approval workflows, secure digital signatures, and streamlined change management. To provide improved visibility and control over the contracting process, a CLM system also offers a central repository to store and track all of your contracts.
The key benefits of an effective CLM system
Implementing the right CLM system for your business can offer a range of benefits, and has far-reaching implications for your organization's contract management.
Some of the key benefits of implementing a CLM system include
Improved efficiency
A CLM system significantly reduces contract cycle times by streamlining and automating the end-to-end contract management process of your company.
Reduced risks
Modern CLM systems come with advanced obligation management capabilities that enable you to mitigate risks from missed contractual obligations. Approval workflows, activity logs, and template libraries also reduce risks.
Better insights
Glean strategic insights and make informed decisions with the reporting capabilities and advanced analytics offered by CLM systems.
Increased visibility
A CLM system provides you with better visibility and control of your contracting process with a central repository and detailed audit logs.
Better collaboration
A CLM system isn’t just for legal teams. Different functions, such as procurement, sales, HR, and Finance, get involved. Integrations with existing tech stacks, such as CLM and CRM integrations, improve cross-functional collaboration even further.
Reduced revenue leakage
With automated reminders and notifications offered by CLM systems, you will no longer miss revenue or renewal opportunities.
Seamless scalability
A good CLM system scales with your business. It allows you to manage a higher volume of contracts efficiently without the need for an increase in resources.
What to evaluate before investing in a CLM system
Flexibility and scalability
Check for a CLM system you can customize to suit your requirements. This adaptability will support your organization's growth and scalability over time.
Data security and privacy
With new government regulations cropping up, the emphasis on compliance is at an all-time high. Look for a CLM system with robust compliance features such as data protection settings to help safeguard sensitive contract information.
Cloud storage
The trend towards cloud-based CLM systems is growing because they enable quick, seamless access to contract data from any location, streamlining the entire contracting process.
Mobile app
Having a dedicated mobile app that enables you to approve contracts quickly and sign contracts on the go enhances convenience and speeds up workflows.
Ease of use
Even with advanced features, the success of a CLM system implementation heavily depends on how easy it is to adapt. Select software that offers a simple, intuitive design to encourage widespread adoption among all stakeholders.
Cross-functional collaboration
Opt for a CLM system that fosters cross-functional collaboration across departments. Good CLM systems offer out-of-the-box integrations or APIs with CRM, ERPs, and other such software. The CLM tool should help non-legal teams create and share contracts faster and take the load off the legal team through standardization and self-serve models.
What does a CLM system implementation entail?
A CLM system implementation is the structured process of deploying and adopting a CLM tool within your organization. There are CLM systems on the market that can take months or even years to implement, while modern CLM systems can help organizations recognize the real value within weeks of implementation. Here are a few things to keep in mind for implementation of a CLM system.
Understand your existing process
Before implementing a CLM system, understand the contract lifecycle process in your organization as each stage of the contract lifecycle can present unique challenges. Assess your current contract management process thoroughly to identify areas for improvement.
Set clear objectives
Once you’ve understood your CLM process, clearly define and make a list of what you want to achieve with a CLM system.
A sample list:
- Enhance contract visibility and transparency.
- Achieve cost savings.
- Shorten contract approval and execution times.
- Reduce business and regulatory risks.
- Improve collaboration across teams.
- Mitigate contract related risks.
- Establish measurable goals to track the success or failure of your CLM system implementation.
Assemble the stakeholders
For a successful implementation of any project, you need people on the team to work together and be on the same page. Involve any function that interacts with contracts, such as legal, sales, HR, and finance, and get their inputs so the system can meet broader organizational needs. Involving stakeholders early in the process increases buy-in and reduces resistance to change.
Choose the right CLM system
There’s no one-size-fit-all when it comes to CLM software. Based on your unique requirements, some CLM systems will suit your needs better than others. Consider the features you need, go back to your objectives for implementing a CLM tool, and select a vendor accordingly. Also keep scalability in mind while finalizing a CLM vendor so that the system grows with your business.
Focus on integration and data migration
Keep in mind that the CLM system you choose should integrate seamlessly with your existing systems to facilitate smooth data flow. Thoroughly plan for migrating your existing contracts into the system. This may involve planning for data cleansing as well as standardizing that data before upload to avoid future complications.
Develop a detailed implementation plan
A clear plan serves as the foundation for successful CLM implementation. Set realistic timelines, outline clear milestones, and define responsibilities. Also plan contingency measures for potential challenges, such as resistance to adopt the tool.
Test and phase the rollout
Rigorously test the CLM system before deployment to verify functionalities and integrations with existing systems. If buying multiple licenses, choose to phase out the implementation, starting with a small group, to manage the transition smoothly and allow room for real-time feedback.
Monitor, measure, and optimize
Make sure to monitor usage, adoption, and key metrics after implementation. Regularly measuring these outcomes can help you optimize the software usage for achieving your set objectives.
CLM system implementation strategies by maturity stage
The effectiveness of your CLM system implementation depends on how standardized your existing CLM process is and the comprehensiveness of the CLM system implementation.
In our buyer's guide, we talk about the five levels of CLM maturity based on the size and nature of businesses and their corresponding CLM requirements. This maturity model empowers your organization to evaluate its current standing, define the desired CLM system implementation level, and map out a strategic course of action for advancement as you grow.
How to convince your boss to implement a CLM system
While the benefits of implementing a CLM system makes it an imperative for most organizations, you'll be surprised how many legal teams still mention budget constraints as a major reason for not implementing one. As part of our State of CLM study, we asked legal teams what the barriers to CLM adoption are, and 44% mentioned budget as a reason.
Here’s a ROI calculator we worked on that will help you quantify the return from a CLM implementation, so you’ll have data that will convince your boss.
You can also read our blog post on ROI from a CLM system implementation to discover our four-step framework that helps you understand and showcase significant returns from a CLM system implementation, including increased efficiency, reduced risks, and cost saving.
Contract lifecycle management using Zoho Contracts
Zoho Contracts is a comprehensive AI-powered CLM system that streamlines the contract lifecycle, mitigates business risks, improves compliance, and promotes cross-functional collaboration for businesses.
The software is known for its simple, clean, and user-friendly interface, which allows for quick and seamless implementation. Based on their requirements, businesses can expect to implement Zoho Contracts in weeks to months. This makes it an ideal choice for businesses looking to realize value faster from their contracting processes.
Organizations such as Scopic Software, a U.S.-based software company, have reported over a 70% improvement in their contract turnaround times since adopting Zoho Contracts for their CLM needs.