We’ve already busted Myth 1: That it’s literally impossible to get clean contract data, and Myth 2: That getting clean contract data costs far too much money and takes way too much time. Now, for the final – and possibly most harmful – one:
Myth 3: We’ll be OK if we just start cleaning up from today forward
The reason I say this myth may be the most harmful of all to an organization’s success with contract management is that myths one and two simply maintain the status quo.
If you believe it’s impossible to get clean contract data, or that getting it will be too expensive or time-consuming, you’re basically treading water, but you may not be making things worse. Aside from the fact that each day brings with it more contracts, more opportunities for errors and oversights, and more risk.
Myth 3, however, is one that people fall into as they’re working towards a better future state. They think they’re making progress towards a better system of contract management, when in fact they could be sabotaging their success with this one erroneous belief.
Let’s revisit the idea of my messy early-2000s iTunes library. Imagine that I woke up one day and realized my music was a complete mess and I just couldn’t live with it any longer.
But the thought of taking the time to go back through years of imported CDs and other songs and albums I’d subsequently purchased was enough to make me sick. I had the brilliant idea that I would just start organizing everything from that day onward.
- I spent hours creating folders and playlists to house new music that I might import or purchase in the future.
- I was careful to double and triple check the artists, song titles, albums, genre, and all other metadata that came in with my new music and add it manually if it didn’t import.
- I checked my current music library for songs, albums, and artists before buying or importing new music to make sure I didn’t already have the same exact thing.
This process continued for a few months, and it wasn’t quick or easy. But I was proud of my efforts and thought I’d finally solved my disorganized music problem.
Unfortunately, I soon realized that I hadn’t.
The biggest problem with this method was the obvious one: I still couldn’t make sense of the thousands of songs I’d imported before implementing my new, disciplined approach.
Even though I’d created a “go forward” plan, it took a lot of work to stick to it and not just give in to the urge to import now and worry about the rest later.
Plus, I still had to do a lot of manual steps to prevent duplicates and make sure new songs were filed correctly. Not to mention that whenever I tried to play any “Alternative Rock” songs, it would play the same few artists I’d added over the last several months and none of my old favorites!
Just like my music problem, organizations that decide to invest in a CLM and think that everything will work as intended if they just focus their efforts on a “starting today” basis, soon learn the truth.
From our experience coming in and fixing these situations later, once an organization realizes they’re in too deep, the major downfalls of this strategy include:
Starting today doesn’t uncover what’s missing so you can plug the holes and stop the bleeding.
With Cleanse, we gather all documents from all sources into one place before even beginning to determine what’s a contract, what’s a duplicate, what’s relevant or irrelevant, in scope or out of scope. Doing this typically uncovers gaps that you weren’t aware of, for example, discovering a new place someone had been storing a certain type of contract. Since you don’t know what you don’t know, it’s highly likely that working on a go-forward basis will leave plenty of stones unturned. This means those people and departments who’ve been doing it their own way in the past will continue to do so. Your new CLM will have major gaps and prove less than useful as others across the organization keep the water hose of disorganization flowing.
Starting today doesn’t fix the process problems that got you into this situation in the first place.
Let’s say you’re on the legal team and you’ve just invested in a CLM. You decide that from today forward, every contract will be named in a standard way, saved in a standard file format, and put in exactly the right place. As wonderful as that sounds, this method doesn’t take into account what your sales team, finance team, customer service/success team, or anyone else at the company are doing. More than likely, everyone else who interacts with contracts will keep doing what they’ve always done and the result will be the same mess, except now with one more place to hunt through when searching
Most importantly, starting today means you’re missing out on the wealth of insight and intelligence you get from examining your legacy contracts.
If you start your contract cleansing efforts on a go-forward basis, it could take years to get to where you can analyze and report on contract trends. The only way to know what your company has and does now is to clearly see your past contracts. Same with any acquisitions you make – you need to know what you’re getting yourself into! Working on a go-forward basis doesn’t help your business answer questions like how many contracts you have, whether you’re consistent with terms across customers and vendors, where you’re paying too much or charging too little, where you’re open to risk, and many other business-critical insights.
So, what’s the solution?
For music lovers around the world, the answer came in the form of new services like Pandora, Spotify, Amazon Music, and Apple Music, which all emerged in the 2005-2008 timeframe. These streaming libraries and subscription services changed the entire paradigm from one where individuals controlled their own music libraries (along with the responsibility for keeping them clean if they wanted them to be useful) to one in which centralized music providers provided the library’s clean content and organization.
Suddenly, it didn’t matter if I ever went back and cleaned up years of messy music. And I was relieved of the burden of managing my music library on an ongoing basis as well.
Services like Spotify gave people the option to pay a small monthly fee and have access to all the music they could ever want, in a searchable, filterable, and organized platform. It provided enough flexibility for each user to organize their music the way they wanted while maintaining enough structure to eliminate things like custom naming conventions, lost metadata, or a user making changes to the master track that would impact everyone else.
Hopefully, the parallels between the world of music and the world of contracts has become clear.
If you can see how inefficient it would be to spend hours of your own time trying to clean up your 20-year-old iTunes library when you could get what you need instantly from a streaming music service, then you can appreciate Pramata’s radically simple approach to contract management.
It’s only by having a clean contract repository that you can get the full value from your CLM. And only Pramata includes Cleanse to get you there with minimal time, effort, and expense.
If you’re ready to see what your own organization’s contracts would look like after going through Cleanse (and more!), we offer a no-cost Proof of Concept.
