Despite procuring some of the most expensive contract lifecycle management (CLM) tools on the market, organizations often fail to achieve the required return on investment. Why is this?
To answer, let me tell you about a conversation I had with the contract management head of a large organization at a recent conference. His organization had purchased one of the best CLM software tools available on the market today, but even after six months following its implementation, the tool still did not operate properly. Questions arose about the cost. Needless to say, he was extremely frustrated.
Unfortunately it’s nothing new. I’ve heard similar experiences from other organizations on many CLM implementation issues, including:
- Technical challenges trying to integrate a CLM tool into existing systems
- User dissatisfaction from inefficient change management
- Lack of continued sponsorship and support for the tool
- Lack of coordination and extended implementation time, leading to delayed return on investment
- Lack of desired results despite extensive use of the tool
- Oversell by the tool vendors, especially around the capability of artificial intelligence (AI) and machine learning (ML).
If these pain points sound all too familiar, I would recommend you to read my article entitled “Why do contract management tools fail?” – published in IACCM’s online Contracting Excellence Journal – for my advice on how to mitigate the challenges of implementing a best-in-class CLM tool.
While many large organizations have embraced best-in-class CLM tools, these tools are just like any other tools designed to help organizations and users. Driving successful results depends on an organization’s ability to integrate the CLM tool within its technical infrastructure, provide the right focus for implementation with proper user training to obtain accurate data, and continued executive sponsorship and support.
As the technology matures through AI and ML applications capable of doing the job in few clicks, CLM tools are becoming smarter. However, the success of implementing and leveraging a CLM tool lies not just with CLM providers and the actual tools, but also with the organizations and their ability to use the tools diligently by adapting new ways of working offered by CLM tool implementation.
Read Mani Agarwal’s full article on the IACCM website to learn more about why contract management tools fail.
Mani Agarwal advises clients on commercial and contract management transformation initiatives. He helps organizations to transform their contract lifecycle and contracts portfolio by implementing the right machine learning/AI tools. He also uses his expertise in optimizing the performance of contracts to ensure maximum value through all contractual opportunities and avoid any revenue leakage. Mani is a qualified lawyer and an elected member of the prestigious IACCM Council for IT and Outsourcing Networks.