End users often focus on the day-to-day benefits of software features, but successful change management requires understanding how a new tool will impact underlying business processes.
The move to digitization in business started with on-premise suites and ERPs, migrated to the cloud, and then went mobile. Global commerce has never moved faster or kicked off more actionable data. But these gains aren’t universal–many departments and processes were left behind in the software arms races of the past two decades. A classic example is contract management.
Contract management is in many ways the last El Dorado of enterprise software. 95% of firms globally have no contract management system in place. This is striking in light of the ubiquity of CRM, accounting software, and other tools that running a business are unfathomable without.
The problem is deeper than manual contracting because while Sales, Finance, Procurement, and others have tailored solutions, they remain siloed because contracts connect all relationships between them, as well as external partners. With no central platform handling this flow, a business is inherently fragmented.
How could this happen?
This gap can be attributed to a history of market failure. Traditional contract management systems were mainly repositories, which helped with contract organization but couldn’t handle the entire contract lifecycle. This led to poor ROI and systems bought mainly for tactical features, making them uninteresting to executives tasked with digitizing complex processes.
The contract management landscape started to change with the rise of the cloud, global acceptance of e-signature, and the dawn of the platform economy. This confluence has led to businesses being able to map contract management to revenue-generation. A side effect has been an increased focus on contract management in the c-suite.
This awareness hasn’t changed the typical search process though. Teams handling the physical flow of contracts feel the lack of a platform most acutely, so naturally, they’re the starting point in a search for technology to help.
But too often contract management initiatives fail because of a misconception from the beginning—a myopic interest in specific features at the expense of focusing on a company-wide digitized contacting process.
Business processes are greater than features
Features are key elements of any software; they encompass the time savers and meaty analytics engines end users love. However, it can often be a case of missing the forest for the trees.
Consider a parallel. A shipping and logistics company wouldn’t opt for a fleet of whizzy Fiats with built-in espresso machines over standard 18-wheelers. But this is the way much software is bought. Individual features seem so compelling because they solve an acute pain (lack of coffee), that the search fails to get upleveled to include the executive team and multiple departments. The immediate problem is seemingly addressed but at massive opportunity cost.
Contract management can change a business and become a signature initiative for executives and end users alike, but only if its scope is realized from the outset (or mapped in a phased rollout). Any foray into contract management should start by considering the implications on:
Speed: Online redlining and negotiation, collaborative editing, and version control with an audit trail mean companies with a contract management platform can go from emailing word documents—and saving reply-all email chains for approvals—to a streamlined process with guaranteed compliance. The impact on onboarding suppliers, signing new customers, and recruiting key employees is dramatic when contracts are an asset not a barrier.
Revenue gains: Built-in e-signature means instead of running all deals through a deal desk or external e-signature provider, every salesperson is empowered to close their deals faster and work off the latest templates and approval processes. Plus, Legal is kept in the loop during redlines as matter of course with no email needed. This will directly impact the number of deals won and get the deals done faster.
Efficient compliance: Legal and Operations can maintain visibility where needed but won’t be a bottleneck. This can underline a variety of major process changes and puts revenue generators in the driver’s seat while safeguarding compliance. Guaranteed approval and template compliance company-wide with a built-in audit trail allows review teams to focus on more than being a stopgap.
The exact gains will vary depending on use case, which is part of the benefit. Digitizing and streamlining the core of a business is the best way to future-proof against competition and uncap growth.
By starting with these core business gains and backing into the relevant features, buyers will drive bottom line metrics as well as enable themselves to go from reactive and tactical to strategic and business enabling.