FEATURE
Process Is King in Contract Management By DIANE HOMOLAK
T
he vast majority of contract lifecycle management (CLM) implementations fail to deliver the value that organizations expect. Technology is not the culprit, so what is? The potential of CLM is undeniable. However, the marketplace hype for technologies such as automation can create a false sense of what is possible. As with any enterprise technology, CLM systems are not push button. Any solution—whether it’s full-fledged or low-code—will only perform as well as the process problems that were understood and addressed before the technology is implemented.
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Engineer and consultant W. Edwards Deming said, “If you can’t describe what you are doing as a process, you don’t know what you’re doing.” Prioritizing technology over process is like trying to jump on a bullet train without first laying down track, hiring the conductor and mapping the optimal routes. It winds up being a road to nowhere. Following is a list of processrelated reasons why contract management transformations fail, and advice for how law departments can sidestep setbacks. • Pushing bad process in and getting poor automation out.
Most departments have yet to deeply examine their unique contract management issues and identify the fixes needed. Instead, they attempt to force fit their problems into existing solutions and expect the system to automate their troubles away. Ground must be laid to take advantage of emerging tech. Nothing is worse than automating and animating bad process. Without prioritizing process, you create an automated version of something that is not working. You force the technology to stretch beyond its capacity. The result is a loop of constant customization, defeating the purpose of investing in the technology in the first place. For example, most contract agreements take time. They are complex, and require give and take with a counterparty in order to reach common ground. Yet CLMs are built to drive automation of low complexity contracts – a rare scenario in the real world. Let’s say you have an elaborate approval process. If you try to recreate it in the confines of an out-of-the-box application, you will have to customize that application to do all the steps. • One-track thinking about contract management solutions. There’s a lot of hype surrounding CLMs. By following the crowd, law departments get tunnel vision and BACK TO CONTENTS
