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A Pramata Article
Choosing a new contract management solution: A step-by-step guide
Contracts living in different systems across your company. Missed renewal dates. Countless hours spent hunting down contracts. These challenges are symptoms of what we call “contract chaos.” The solution? Implementing a new contract management platform that transforms your contract chaos to contract nirvana.
You may be looking for your first contract management solution. Or, maybe you’ve suffered a failed implementation in the past and are in desperate need of a replacement. Either way, you’ve come to the right place.
Here, we’ll dive into how to find the best contract management software to add to your tech stack.
5 signs it's time for a new contract management solution
Contract management software, also known as contract lifecycle management (CLM) software, is a tool used to manage contracts from draft to renewal and every step in between.
The right software will provide a single source of truth for all your contracts, boosting convenience and efficiency across your organization. The wrong software, however, will do the exact opposite, draining your resources and could even cause you to lose out on business.
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Unsure if you need a new contract management solution? Learn seven ways to tell it’s time to break up with your dysfunctional CLM.
Here are some clues:
- You're losing revenue: You may find that your vendor contracts are accidentally auto-renewing, costing you serious cash. Or, you might be facing legal and compliance penalties due to a lack of contract visibility.
- You're missing out on new revenue: You could be missing customer renewals due to a lack of visibility or your system may be failing to surface upsell opportunities.
- Your current software feels like it requires an IT degree: If you’re bribing your IT team to fix "one more thing," you should look for a new solution. The same is true if you’re hiring costly third-party consultants to build functions that should come standard with any CLM.
- Key players aren’t using your CLM: Other teams, such as sales, may be refusing to use your CLM due to lack of a CRM integration or just how complicated or clunky it is.
- Your CLM is still messy: You might have a fancy CLM, but it’s still as cluttered as a filing cabinet, filled with duplicate documents or random files, and leaving you paying for software with zero contract insight or data visibility benefit.
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What to look for when shopping for contract management software
While there are many contract management solutions on the market today, they’re not all created equal. For the best results, map high business impact use-cases to specific features and vendor benefits when shopping for new software.
Software features with high impact
Each contract management platform will differ when it comes to features. However, there are some non-negotiable features, that drive high business impact, you should ensure the platforms have out-of-box:
- Simple contract migration, cleanup and digitization: Contract and document migration will make or break your implementation, not to mention set you up for success for AI-driven analysis and reporting. The software you choose should have an easy migration process and the tools necessary to automatically cleanse, organize (into document families by order of precedence) and digitize your documents.
- Intuitive contract repository: An intuitive repository is so much more than just storage, it should give you a single source of truth (that is continually updated) for all contract documents. It should be highly accurate and reliable so you always know what contracts are currently active (or no one will use it!). And it should be easy for anyone within your company to access and use, with role-based permissions to keep everything secure.
- Renewal tracking: Renewal tracking tools and alerts mean that you never miss a customer or vendor contract renewal. This improves your ability to grow your revenue and fulfill your obligations. It also helps you stay up-to-date on vendor contracts that are about to auto-renew.
- Global search: Full-text global search helps you find any contract and answer contract questions in seconds. Using global search, you can easily find certain phrases or clauses across all your contracts. And if you’re repository is cleansed and organized like above, this ensures the answers that come back are useful and correct!
- Reporting and analytics: When do contracts renew? Where do we have non-standard terms? You can answer these questions easily and make data-driven decisions with a tool that includes built-in reporting and analytics. But not all CLMs are created equal when it comes to the high-impact of post-signature reporting and analytics. When evaluating this capability, we recommend testing in a real-world POC environment that includes your actual contracts and data. Also, determine how much effort and resourcing is required to truly get executive-level reporting.
- Contract requests and workflows: The best CLMs include a centralized place for all contract requests with simple no-code forms and workflows, tailored to your business, so you can monitor all contracts moving throughout your organization. They also include contract templates for simplified request & drafting.
- Built-in integrations: With built-in integrations, a CLM will integrate seamlessly with other tools, such as your sales team’s CRM. This enables contract data to flow freely between teams across your business, boosting efficiency and eliminating manual work.
- Contract AI capabilities: Generative AI is revolutionizing contract management, from instantly providing contract relationship summaries, automating redlining, analyzing contracts and more. Contract AI can streamline contract management tasks, giving you time for more important work. To take advantage of GenAI’s immense impact and drive meaningful results, the best CLMs will prioritize cleansing, organizing, and digitizing contract data at a high degree of accuracy.
Vendor benefits with high impact
When looking for a contract management solution, you’ll want to choose a vendor who:
- Makes implementation simple: Choose a vendor that does the heavy lifting for you, such as handling the cleansing and digitization of your contracts and performing the ongoing cleanup and organization as contracts are signed.
- Offers transparent pricing you can trust: You should always know what you’re paying for. It’s also beneficial to choose a vendor that let’s you only pay for what you need, to easily fit into your tech stack.
- Delivers world-class, ongoing support: Many implementations fail because vendors don’t support them during the sales process, through migration and beyond. Look for a vendor who does (and make sure they have the customer success stories to prove it).
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4 steps to find the perfect CLM
Ready to find the perfect CLM for your company? If so, there are four specific steps you must follow, from determining your must-have features to test-driving CLM platforms.
Determine your must-have, high-impact features
The features you need may be different from what other companies need. Take the time to determine your list of must-have features that’ll fulfill your requirements.
Bonus tip: Focus on the essential, must-have features (sometimes considered the “basics”). Without these, all the fancy bells and whistles won’t do any good.
It’s important to bring all stakeholders into this process. This includes anyone who needs contract data in your organization. To simplify this process, here are some questions to ask:
- What do you like about your current system or processes?
- What do you dislike about your current system or processes?
- What do you absolutely need a new CLM to do at its core if it does nothing else (determine the highest-level impact!)?
Consider your budget
The next step is to consider the budget you’re working with and what fee structure will work best for your organization. Some CLM vendors will require you to pay for their software monthly while others will require an annual fee. Some may have a fixed price while others will fluctuate based on different factors.
Above all, look for pricing transparency and make sure you’re considering the total cost of ownership: the software plus other resources you’ll have to pay for to fully utilize it.
It’s also important to consider the high-impact ROI across your business, not just the increased efficiency on the legal team. When budgets get crunched, it’s critical to show business-wide impact like stemming revenue leakage, reducing vendor costs, managing obligations, accelerating contracts and more.
Compile a list of potential vendors
After determining the features you need and your budget, you can begin searching for a software vendor. There are many ways to do this, such as doing an online search, asking for recommendations from colleagues or looking at trusted software review websites like G2.
As you search, be sure to look at each vendor’s software features, customer success stories, testimonials and product guides. We recommend compiling a list of 5-7 contenders before moving forward.
Test-drive CLM solutions (and vendors)
Once you have a list of vendors, it’s time to test-drive their CLMs to see how they would work within your organization. Schedule a demo with each vendor to see the software in action. It’s important to make sure the vendor offers a real-world POC environment that uses a large set of your own contracts, so you can truly see how the product works.
Remember: You’re also test driving the vendors. Ask them the hard questions, like “What is the manual effort required, when it comes to cleaning and organizing my contracts? Who QA’s the data for accuracy? What coding or IT support is involved to setup workflows? What is the average implementation time?” Pay attention to how they respond before, during and after the demo. This will give you insight into how the working relationship will be if you choose to move forward.
Tips for partnering with your new CLM vendor
Once you choose a vendor, it’s time to work toward the implementation of your new CLM software. Both you and your CLM vendor are responsible for a smooth transition. Do your part by following these tips:
- Determine where your contracts live: One of the first steps you’ll take toward implementation is migrating all your contracts into the new system. Take the time to figure out which specific systems you currently use to store your contracts. Doing this in advance will support your vendor in the migration process. And with Pramata, you never have to worry about cleaning or organizing your files, we do this for every customer, no manual intervention required.
- Develop an implementation team: Gather a group of individuals from various teams and task them with overseeing the software implementation. Building a dedicated team will help ensure implementation moves forward as planned. It’ll also streamline communication so that your vendor knows exactly who to go to with questions, concerns and next steps.
- Partner with your vendor on goals and an implementation framework: This part’s mostly on your vendor, but it’s something to be aware of before you get started – and a red flag if a vendor doesn’t understand the high-impact value to your business. A major software investment should be a true partnership where your team and your vendor have clearly defined goals, roles and responsibilities along with milestones and deliverable timelines. Make sure both your team and your vendor go into the process with a high-value, high-impact roadmap that everyone can agree to.
Put Pramata on your consideration list
If you’re just starting the process of finding a CLM (or replacing your current CLM), let Pramata show you how easy it can be. Selecting and implementing a new contract management solution doesn’t have to be a long and arduous process. Pramata does the heavy lifting for you, from contract digitization to cleanup. We even provide a no-cost proof-of-concept (POC) using a large number of your own contracts so you can see for yourself.
Experience radically simple contract management by scheduling a demo of Pramata today.