5 common mistakes when choosing CLM software

Selecting the right contract lifecycle management (CLM) software can transform how your business operates, driving efficiency and minimizing risks. But choosing the wrong CLM software can lead to costly mistakes and missed opportunities. Here are five common pitfalls to watch out for and how to avoid them in a way that sets your organization up for long-term success.

Read on for five of the most common pitfalls you may encounter when selecting a CLM solution – and how to avoid them.

1. Don’t settle for cookie-cutter demos

When choosing CLM software, a generic product demo might look great on the surface but won’t reveal if the software truly meets your needs. According to the Standish Group’s CHAOS report, only 29% of enterprise software implementations succeed. Many failures start with inadequate vetting during the demo stage.

The risks of a cookie-cutter demo are significant. A vendor may showcase features that seem impressive but fail to demonstrate how the software will handle your specific contract management challenges. This can lead to investing in a system that doesn’t fully address your organization’s requirements.

Case in point: TaylorMade Golf Company’s first attempt at automating its CLM fell short due to issues like weak security and limited mobile access. Handling more than 6,000 sensitive annual contracts across international borders, the TaylorMade team realized the system was underutilized and became merely an electronic repository. Learning from this, TaylorMade approached their next CLM vendor selection process with precision, demanding in-depth, tailored demos that tested vendors’ ability to meet specific requirements.

What to do when choosing CLM software:

• Insist on live, customized demonstrations that align with your unique business requirements.
• Challenge vendors to address your most complex use cases in real-time during the demo.
• Avoid “sales pitch” demos that don’t explore how the software will work in real-world scenarios.

Pro tip: A tailored demo ensures you’re evaluating a solution, not just a presentation. By focusing on how the software handles your critical workflows, you can better assess its potential impact on your business.

2. Make successful implementation a priority

Why it matters: Even the best software will fall short without a seamless implementation process. An unclear transition plan can lead to delays, budget overruns, and user frustration.

Implementation isn’t just about installing software; it’s about transforming how your organization manages contracts. Without a clear roadmap, the transition can become chaotic, leaving stakeholders frustrated and workflows disrupted.

Case in point: OB Hospitalist Group (OBHG) faced workflow inefficiencies with more than 200 manually-updated vendor contracts. By prioritizing implementation expertise, they transformed their processes and gained critical operational insights.

What to do instead:

• Assess vendors’ implementation success metrics and ask for detailed project plans.
• Ensure workflows, milestones, and responsibilities are clearly defined.
• Verify the vendor’s ability to integrate with existing systems like ERP or CRM platforms.

Pro tip: A strong implementation partner turns chaos into clarity, setting you up for long-term success. Look for vendors with a proven track record of managing complex transitions smoothly and efficiently.

3. Don’t overlook user adoption

Why it matters: The best CLM system is useless if your team doesn’t use it. According to Forbes, 91.6% of enterprise software errors stem from user issues, not technical failures.

User adoption is the cornerstone of a successful CLM implementation. If employees find the system cumbersome or irrelevant, they’ll revert to old habits, undermining the value of your investment.

Case in point: A Los Angeles hospital abandoned a $10 million CLM system because clinicians refused to use it. On the flip side, the International AIDS Vaccine Initiative (IAVI) succeeded by engaging users early and offering extended trial periods.

What to do instead:

• Involve users from the start and gather their feedback.
• Opt for solutions that are intuitive and easy to use.
• Provide free trials or prototypes to help users see the system’s value firsthand.

Pro tip: User buy-in isn’t optional—it’s essential. A system that resonates with your team will drive higher engagement, leading to better outcomes and smoother operations.

4. Minimize vendor dependency

Why it matters: Relying too heavily on a vendor for maintenance or updates can drive up costs and create operational risks. Customized systems often require specialized skills, making you reliant on external support.

Excessive vendor dependency can also slow down your ability to adapt to changing business needs. If your team lacks the tools or knowledge to make updates, even small adjustments can become time-consuming and expensive.

What to do instead:

• Choose no-code or low-code platforms that empower your team to make updates without programming expertise.
• Ensure the vendor provides comprehensive training and support.
• Plan for long-term system management by building in-house expertise.

Pro tip: A flexible platform reduces dependency and puts control back in your hands. By enabling your team to manage the system, you’ll also reduce costs and increase agility.

5. Vet your vendor’s stability and practices

Why it matters: Your CLM solution should support your business for years. If the vendor’s business practices are questionable or their financial stability is uncertain, you could face unexpected costs or disruptions.

Choosing the wrong vendor can have long-term repercussions. A vendor with unsustainable pricing or unreliable service can leave you scrambling to find alternatives, disrupting your operations.

Case in point: King County’s Public Health Department faced an abrupt end to vendor support, forcing them to start over. Fortunately, their new solution cut costs and improved efficiency.

What to do instead:

• Research vendors’ financial stability and business models.
• Avoid vendors with loss-leader pricing that could lead to sharp price increases later.
• Review contracts carefully to ensure transparent terms.

Pro tip: A reliable vendor is a long-term partner, not just a service provider. Ensure the vendor has a proven track record and a commitment to customer success.

Conclusion

Avoiding these pitfalls can make the difference between a CLM solution that drives success and one that falls short.

When you take the time to evaluate your options carefully and prioritize your organization’s needs, you’re not just investing in software—you’re investing in the future of your business. Choosing CLM software that will not only streamline operations but also empower your team to work more strategically and adapt to changing demands. By following these steps, you can confidently choose a CLM solution that delivers measurable results and evolves with your business.

Learn more about choosing CLM software. Read our blog, “How to pick the best CLM platform for your business using analyst insights.”