After years of negotiating and managing contracts for software companies, I had an opportunity to join one of the first contract lifecycle management (CLM) companies in ’99 (it was ultimately acquired by Emptoris). As a “contract management veteran” with an interesting (perhaps controversial) perspective on IBM’s recent decision to sunset its Emptoris product line, I think it’s a good time to ponder where the contract management technology space might be heading.
Where’s the real value?
As with many new technologies there was great excitement in the early days of CLM, as business leaders were told and believed they could finally implement contracting standards, automate contract workflows, fix both the lack of visibility into contract terms and inefficiencies in authoring and negotiation processes, and, also, mitigate their legal and compliance risks.
Over the years, I’ve watched CLM vendors come and go, always struggling to fulfill their early promises. In fact, some of the industry’s most committed customers have rolled out one CLM initiative after another, doggedly believing that the next CLM approach, or solution, would eventually provide the results they wanted.
I don’t think anyone would disagree that CLM solutions are great at managing relatively simple contracts that follow a standard process on their own paper. But after 15 years in the CLM space, I realized that CLM systems wouldn’t ever find a simple, cost-effective, accurate way to import legacy contracts, handle the nuances and complexities of highly negotiated contracts, or effectively (and elegantly) manage contracts using third-party paper. This left companies to manage far fewer contracts than they originally anticipated. All in a manner that yielded far fewer benefits than they believed they could get.
Most importantly, CLM systems have always strained to identify and highlight the most important contract terms in the vast ocean of sub-contracts, addenda and amendments that increasingly characterize today’s deals, leaving them as mostly useless, unstructured language.
Frankly, relying on extracted contract terms by themselves isn’t enough to drive effective business decisions. They often need to be synthesized with other data details that reside in CRM, CPQ, billing and numerous other systems to achieve a complete view of any commercial relationship.
Data, data, data!
I eventually moved to the contract analytics side of the sector, where I realized what was missing in the contract management puzzle—data. What I realized was that above all, the use of the right data was necessary to fulfill the original promise of CLM solutions. But even then, it turned out, key data, not all data, is what’s missing in creating a useful and complete view of any companies’ customers.
Then I had an “aha” moment when I moved to Pramata. I saw that a whole new approach to harnessing and using key data, starting with human-assisted AI, and ending with a complete, accurate, up-to-date view of the customer, that every department can access whenever they need. This is a game changer for effectively managing contracts.
I never thought that I’d be talking about a new vision for managing contracts. And I certainly never thought it would have anything to do with the 21st century’s digital transformation of data. But here I am, and it does.
If you’re an Emptoris customer looking for a quick and easy transition to a compelling alternative solution for managing contracts please consider joining me on September 28 for a 30-minute webinar. I'll show you how Pramata provides a quick and cost-effective way to gain full visibility into all your customers price increases, renewals, non-standard terms, purchase commitments and more. I hope you can join me!