5 Traits to a successful (CLM) relationship 

Love is in the air… or is that just efficient contract management? 
 
Contracts are the lifeblood of supplier relationships, determining everything from responsibilities, timeframes, payment, terms and conditions, and pricing for the deal. So, when you’re evaluating a contract lifecycle management system to maintain your precious agreements, you’ll want to make sure it’s a relationship ready for the long haul. 

But finding “the one” isn’t always easy. It takes knowing the key buy-side requirements to assess a CLM system so you can avoid the “toxic” traits that often derail contracting projects, said Spend Matters’ Chief Research Officer, Pierre Mitchell, during his mainstage presentation at the Agiloft Summit last year. 

Read along to find the 5 traits needed to create a harmonious CLM relationship, as well as the actionable ways you and your CLM can remain together for your business’ golden years.  

1. Specialized support for buy-side requirements

CLM vendors often claim to support “all sides” of contracting, but true multi-function support is rare, Mitchell said.  

Solutions designed for legal or sales departments can work for procurement, but the more mature your contracting processes are, the more specialized your requirements become. Capabilities such as complex price condition modeling, direction materials/asset management or supplier risk indexed to contract risk are not guaranteed offerings from all vendors. 

2. Ability to configure and adapt the system to unique needs over time  

Business conditions and your organization will change over time – shouldn’t your software, too? 
 
In an ever-shifting business and regulatory environment, it’s critically important that your CLM platform is a “shape-shifter” flexible enough to adapt to any future business needs, Mitchell said. This is just one of the many reasons why no-code solutions are so useful, particularly post-deployment. 

“There’s a lot of terms out there, low –code, no code,” he said. “No code is just the ability for you to do self-service and you to be able to build a lot of the technical capabilities….you own your own destiny.”  

Mitchell advises that you look for CLM capabilities that emphasize modularity, flexibility, extensibility, and connectivity – at no additional cost. 

True “future-proofing,” Mitchell says, “takes a tech village.” Collaboration with IT and the broader vendor ecosystem are necessary to make sure your system is built to last. 

3. Contract analysis and AI that aren’t just proprietary ‘black boxes’

AI-based capabilities like contract analytics show promise to increase efficiency, but only if you can train and understand the outputs yourself, Mitchell advised. 

“AI is an emerging area, and it’s a very complex ecosystem out there. What’s important is that not all AI is the same,” he said. “I’m going to ask you guys for some homework. So over the next year, if you’re not really getting into the understanding of AI, it’s important that you do, because this isn’t just about machine learning algorithms…it’s about how do we manage this knowledge? And AI is ultimately about how do we augment our human capabilities and put that into a digital capability.” 

With an increased familiarity and comfort surrounding the use of AI, Mitchell said, you’ll be more empowered to be a better technology buyer and, ultimately, a better adopter of the solution. 

One word of caution? Never let someone sell you AI in what Mitchell calls a “black box,” or proprietary business information. You should always interrogate how the technology behind the AI works and how the models are maintained, updated and adapted. 

“You should be asking all of your providers, including Agiloft, how they manage the AI around legalese, how they’re getting into domain modeling, how they’re getting into knowledge graphs, how they’re actually protecting the data, how you can build your own set of IP that is transferable and can work with some of the existing analytics that you haves…how you work that with existing tools,” he said. 

4. Strong interoperability and integration with other systems and data sources

Your CLM solution not only needs to have strong interoperability when it comes to other systems, but your approach to contracting also needs to be integrated into the broader structure of your organization and its pre-existing tools, he said. 

It’s key that you work with the heads of other departments, understanding that their goals and business objectives may differ from yours, to use an “agile approach” to demonstrate value and make sure you’re all aligning with one another. 

“Your ability to use innovative technology to prove out business cases is great because the head of digital, IT, they want to prove these things out, and this is where you’ve got to work with them. It’s a team sport to get them engaged,” Mitchell said. 

5. Clear vision and roadmap that aligns with your stakeholders and business direction 

You and your CLM provider need to have the same long-term vision of your relationship, whether that be strategy, commercial, or technical, Mitchell said. You want a vendor that is looking to “grow older” with you but is also willing to support your growth as your company changes. 

CLM providers need to exercise increased discipline to adhere consistently to their product roadmap and its delivery, he said, noting that frequent, clear, and candid conversations about the roadmap are the best way to obtain this alignment. 

Conclusion

Choosing a CLM is not an easy decision, but what happens if you make no decision at all? As Mitchell quoted an old Rush song, “If you choose not to decide, you still have made a choice.”  

Simply stated, there are too many risks associated with not having a CLM in place. 

“You have to have a really strong enterprise-level CLM that isn’t just serving the needs of legal…but that is where you have to take stock of what you have, and how do [you] find a root solution that addresses multiple root causes,” he said. 

It’s understandable if you feel overwhelmed by the number of vendors in the CLM marketplace, but you too can find a CLM match made in heaven if you keep your eyes set on these five traits. 

With clear, open communication with your CLM provider, an active assessment of the CLM’s alignment with your long-term vision, and an appetite to embrace emerging tools, you and your CLM can sail together into your organization’s “golden years” with smooth and efficient contracting.