Sometimes, the implementation of Contract Management tools , or CLM (Contract Lifecycle Management) fails. To try to understand why and, above all, how to avoid these failures, we had the chance to talk to Craig Conte, an expert in Contract Management for over 20 years.
Craig Conte is a partner at Deloitte, responsible for the legal contract management consulting team. His team focuses on optimising companies' end-to-end contract management processes. To achieve this, they focus on business outcomes, reducing the cost of contracts and increasing the speed and efficiency of each stage.
In this interview we refer to an article he wrote "Why CLM implementation fails".
We have also transcribed the interview in French.
Why contract management solutions sometimes fail: Interview with Craig Conte, partner at Deloitte
Hello Craig, thank you for accepting this interview! In this interview we will focus on the failures of contract management implementations in companies. You have written an article on this subject. What failures are you talking about in this article?
CLM (Contract Lifecycle Management) solutions are complex but relatively new technologies. We've been hearing about it for about 20 years, I would say. But in the last five years, it's grown and arrived in companies. I think people are trying to embrace it and thinking, 'Great, technology will solve everything'.
It's a bit like saying: I have this phone, it will solve my communications. Or: I have this car, it will solve my transport problem. But we forget that a phone in itself cannot solve anything. Neither can a car. So it seems to me that people sometimes think: contracts are complicated to manage, I need technology to help me. But they don't really think about what they are trying to solve.
And managing the life cycle of the contract is complex. There's contract generation, contract signing, contract management, contract termination... The question to ask is: "What is the problem you're trying to solve?"
There are different technologies that focus on different aspects of the problem. What do you need? Do you need to be more efficient? To close the deal more quickly? Is it because it makes you more money? Are you losing money?
2020 has highlighted the particular and essential role of technology, with the acceleration of the digitalisation of businesses and remote working. Technology seems to be an answer to the need for companies to continue doing business. But technology is not enough, as you explain in your article. Why can't it solve everything?
Indeed: 2020 was a complicated year, one that we will never forget. It forced us to adopt technology.
We have a multitude of tools at our disposal to call each other every day! Technology has solved this communication problem, it allows us to communicate with each other... But it has also created another problem. We almost connect too much! Suddenly, our days have been broken down into 30-minute phone slots. But if we put a framework in place, maybe we could be more effective. Maybe we could turn those meetings into 15 minutes and leave ourselves time to do other things!
This is also the case in the management of contracts. I used to be able to go and ask someone to look at my contract, or to sign it. Today, there are all kinds of electronic signature solutions, and they are being adopted more and more. People are also starting to realise that they don't need to go and talk to their lawyer or sales person. And you know what? I'd go even further and say that if you have enough information, you could even create the contract. Technology has forced us to adapt, because humans are good at change!
But we also need to take a step back, and realise that including too much technology in our daily lives, or including it on its own, does not give the results we want. We need to take a step back and say, "Am I trying to be more efficient by integrating a contract that goes on for pages and pages with the best technology in the world?"
If you are trying to digitise it, why not try to optimise it too? Make it easier to use?
Your team helps companies transform their contract and business management activities to become more efficient, create more value, and make the work of all teams involved in the contracting process easier. How can you measure this?
Contract management is a team sport! Lawyers are involved, but so are purchasing, commercial, financial and operational departments. All the teams touch the contracts, but no one owns them completely. So what we are trying to do, and what technology is trying to do, is to look at the existing contractual process within companies and find opportunities to optimise them.
So rather than just saying that a legal team or a procurement team needs to change, you look at the touch points and see what can be changed. What touch points can be eliminated? How can we do better?
Lawyers are great people, good people, intelligent people. But do we need them for everything? Do we need a lawyer to create an NDA? Do we need a lawyer for a simple agreement that has been made 100 times this month by the company?
Read also: Contract Lifecycle Management, what use is it for buyers?
Why is bond management so important today?
I always compare it to marriage. Picking a partner to work with for a while is the fun part. You go on dates, you drink wine... But once the dating is over, that's when the work starts, and you move in together. And if you don't do the work, the relationship falls apart!
I'll use a metaphor. I don't care how much you were in love before. If you don't put your mind to it, the relationship will fall apart. Money will be lost. The disappointments will be there. It's exactly the same with business contracts. If you don't understand your partner's obligations and expectations, and you don't fulfil them, there will be disappointment. And then eventually you will break up, which nobody wants in a contractual relationship!
You say in your article that companies should surround themselves with the right people to avoid legal technology implementation failures. What does the best team look like to you? Is it a company with an external consultant and an IT provider of CLM (Contract Lifecycle Management) solutions, for example?
I am naturally biased: I think consultants are great people (laughs)! But also, I think it's important to have a legal technology provider who will be upfront with you. Remember that they will be the best person to explain to you how the technology works.
Then you usually have to partner with someone, to help implement this technology in the company, where you have to have a team involved. In any case, the company has to involve you in this process because it's a change in the way you do business. Consultants or technology providers will not be there all the time.
So you need to have champions in-house who understand contract management technology, how it works, and who can exist on their own after implementation.
This is the most important part. Don't think of it as just an IT implementation of a technology. There are probably excellent technicians inside your company who may have done 50 or more ERP implementations. But contracts are different, they're more complicated. And that's because it involves lawyers, finance, purchasing.
I have yet to meet an IT professional who understands all this perfectly.
Read also: ECLM and technology, the winning duo for your contract management
What are the differences between the Anglo-Saxon and European markets in contract management?
Perhaps the US and UK are slightly ahead. But France takes the subject of contract management seriously. There are contract management schools for example, which means that the development of these skills and the development of this structure within organisations is valued.
There have been a lot of companies like yours in the last few years. And it's wonderful to see these startups getting investment. I think the slight delay will be caught up very quickly!
Read also: Contract Managers, practices and future prospects
How do you think the market for contract management tools will evolve in the next few years?
It will continue to grow. There are about two hundred and fifty legal technology tools today, which is a lot of different options. I think companies now realise that they can't just work with pen and paper.
In the 1900s people were trying to figure out how to make horses faster. Now we've established that the solution is the car, if you're going to work, and you need it, are you going to try to build it yourself?
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