Why Many First-time CLM Implementations Fail

Navigating the Complexities of Enterprise CLM Implementation: Insights from Cimplifi and Transformation Best Practices

Gartner predicts that nearly 50% of initial contract lifecycle management (CLM) implementations will fall short of expectations. Implementing CLM successfully is a complex endeavor that hinges on navigating a myriad of strategic, technical, and organizational challenges. For organizations keen on fostering stronger client experiences and boosting revenue growth, recognizing, and addressing these challenges is paramount. Here, we outline the multifaceted reasons behind CLM implementation failures and introduce how Cimplifi, a leader in legal services, contract analytics, and CLM professional services, plays a pivotal role in guiding organizations towards successful CLM and contract analytics implementations.

Core Challenges in CLM Implementations

1. Strategic Misalignment: Without a coherent strategy and well-defined objectives, CLM initiatives can meander without delivering tangible outcomes. Clear goals that resonate with broader business objectives are essential. Change management must be aligned with the needs of end-users.  This alignment fosters an accelerated adoption path, and a higher level of proficiency amongst the users leading to more effective use of programmatic contract solutions, and ultimately the value driven by CLM.
2. Insufficient Client Insight: A profound understanding of the client journey is critical. Failures often stem from clients not being prepared for a CLM project, leading to initiatives that miss the mark in enhancing the client experience. Engaging a group of key stakeholders early and continuously can provide the granularity needed for effective solutioning, while also building a unified effort towards understanding and meeting needs.
3. Data Management Woes: The bedrock of effective CLM is high-quality, integrated data from various internal data sources and systems. Poor data quality and integration impede the creation of consistent client experiences and unlocking actionable value. Organizations must consider contract data and system integrations holistically, identifying “golden source” data and managing it throughout the contract lifecycle to ensure accuracy and integrity. This approach includes a thoughtful discovery process and governance mechanisms that align internal knowledge bases and expectations.
4. Technological Constraints: Selecting technology that is not “fit-for-purpose” or tools that are not enterprise ready can severely limit CLM effectiveness. The chosen technology must empower, not restrict, the CLM strategy.
5. Organizational Resistance: Changes in processes and culture necessary for CLM can face resistance. Effective change management, supported by top-level leadership and focused on meeting teams where they currently work, is essential for ensuring organizational buy-in and smooth transition to new systems.
6. Training and Support Gaps: Adequate training and support for staff are vital to utilize new tools and processes efficiently, ensuring the smooth management of client relationships. Implementing comprehensive training and designing user adoption strategies ensures that all stakeholders are proficient and comfortable with new systems, fostering sustainable adoption.
7. Lack of Leadership and Collaboration: Strong leadership and interdepartmental cooperation are crucial for resource allocation and creating cohesive client experiences. Governance structures, including workflow architecture and template management, provide the framework for achieving compliant and efficient process improvements.
8. Inadequate Measurement and Adaptation: Continuous evaluation and iteration based on performance metrics are necessary for CLM success. This approach should be data-driven, leveraging analytics for informed decision-making and optimization.
9. Neglecting Client Feedback: Incorporating feedback from the client and socializing the improvements is essential to maintain internal client and end-user engagement, and effectiveness of the CLM program.
10. Underestimating Complexity: Acknowledging and addressing the inherent complexities of CLM implementation through a phased and realistic approach is vital to managing expectations.  It’s essential to regularly assess whether expectations align with practical implementation conditions throughout any project. Starting small and scaling gradually allows for iterative refinement and better management of change.

How Cimplifi Addresses CLM Challenges

Cimplifi stands out in helping organizations overcome these hurdles, ensuring CLM and contract analytics initiatives not only succeed but excel. Here’s how:

• Expertise in Legal and Contract Management: Cimplifi has deep knowledge in legal services and contract lifecycles, with experience as CLM users on the client side before joining Cimplifi. Our specialized and practical knowledge and experience enables our team to naturally integrate our insights, specifically, the nuances and idiosyncrasies specific to transactional contract work. This results in a solution that aligns closely with the end-users’ vision, and their day-to-day experience.
• Seamless Integration: With expertise integrating CLM systems with existing enterprise platforms (such as ERP, CRM, HRM systems), Cimplifi ensures a cohesive business process. Cimplifi has the technical know-how and experience to facilitate these integrations, ensuring that your CLM system works in harmony with other business processes. This integration capability is beneficial for automating contract creation, monitoring, and management processes, thereby reducing manual efforts and minimizing errors.
• Data Migration: A critical step in the CLM implementation process that’s often overlooked in the planning phase is data migration.  Nearly all companies have legacy contracts, systems, and CLMs that they have been used to store documents and migrating that data to the new CLM is a critical step. If your data resides in a legacy database, or your contracts are dispersed across multiple locations and need to be centralized, or you seek insights into your contracts for better business outcomes, consolidating your data to a single source of truth will bring significant value to your business.  Working with a partner like Cimplifi that has extensive migration experience from popular solutions like Conga, Ariba, SAP, and Icertis, our experts perform a robust assessment, developing a data mapping and standardization strategy while leveraging best-in-class technologies to validate data accuracy and perform extensive testing for quality assurance.
• Customization and Scalability: Understanding that one size doesn’t fit all, Cimplifi customizes CLM solutions for specific business needs and ensures they scale with your organization. We work closely with clients to customize solutions that cater to specific business needs. Furthermore, as your business grows, Cimplifi ensures that your CLM system can scale accordingly, supporting an increasing number of contracts and more complex contractual relationships without compromising performance or efficiency.
• Focused Training and Adoption: A common reason for the failure of new systems is the lack of user adoption. By providing comprehensive training and designing user adoption strategies, Cimplifi ensures all stakeholders are proficient and comfortable with new systems, maximizing the value of their CLM and contract analytics investments.
• Ongoing Support and Evolution: Recognizing the continuous nature of CLM, Cimplifi offers steadfast support and updates to keep systems compliant, functional, and at the cutting-edge. Through ongoing support and maintenance services, we can help you address any issues and evolving needs of the business that may arise post-implementation.
• Data-Driven Insights: Leveraging AI-driven CLMs, Cimplifi enables organizations to make informed decisions, identify and mitigate risk, and identify opportunities for further return on investment through optimization and savings. This data-driven approach enables better decision-making, risk management, and strategic planning.

By partnering with Cimplifi, organizations can navigate the pitfalls of CLM implementation through a blend of expert guidance, technical prowess, and a deep understanding of the legal and contractual landscapes. This comprehensive approach not only mitigates the risk of failure but also positions CLM systems for ongoing success and relevance, aligning closely with evolving business and client needs.

If you missed the other blogs in this series, we explored how extracting data from contracts, organizations can gain valuable insights into their legal and financial obligations, opportunities for negotiation, and areas of risk, thereby making informed decisions that align with their strategic goals. Then, we discussed how CLM revolutionizes business operations, orchestrating lifecycles and empowering innovation through contract data insights and automation. You can catch up on these blogs here.