Implementing a Contract Lifecycle Management (CLM) system is a major investment, and it's one that holds the potential to transform how your organization handles contracts—from streamlining processes to enhancing compliance and boosting efficiency. But the stakes are high. A failed implementation can lead to wasted resources, disrupted workflows, and even legal risks due to mismanaged contracts.
For General Counsels, these risks are especially concerning. In today’s business world, GCs are expected to prove their value far beyond just being a cost center. A successful CLM implementation is a chance to shine—demonstrating how the legal department can drive strategic goals, increase efficiencies, mitigate risks, and add real value. On the other hand, a failed implementation wastes resources and makes it even harder for GCs to secure support for future projects.
In this article, we explore eleven of the most common reasons why CLM implementations fail, spanning pre-implementation, implementation, and post-implementation phases. By understanding these pitfalls, GCs and business leaders can address them proactively, ensuring their CLM initiatives succeed and spotlighting the legal team's vital role in driving business value.
Pre-implementation is all about setting a solid foundation for success. It involves the critical steps of planning, preparation, and aligning the new system with your existing processes. But without careful attention, it can easily become a stumbling block. For GCs, who are already managing high-stakes responsibilities, a poor start to a CLM initiative can lead to wasted resources, unmet expectations, and friction that’s hard to overcome later.
Embarking on a CLM journey without a thorough understanding of your existing contract processes is like setting sail without a map. Organizations often rush into implementation without analyzing current workflows, contract types, and approval processes. This lack of groundwork leads to misaligned solutions that don't address actual pain points or inefficiencies.
Moreover, without defining clear success metrics and key performance indicators (KPIs), it's impossible to measure progress or determine return on investment (ROI). Setting these benchmarks from the outset provides a roadmap for implementation and a yardstick for success.
CLM systems are robust tools, but they aren't magic wands. Expecting instant results or immediate ROI ignores the necessary learning curve and adaptation period. Implementations require time, resources, and patience. Underestimating the complexity of integrating a CLM system into existing operations can lead to frustration and project fatigue.
It's crucial to recognize that CLM implementation is a significant organizational change. Allocating adequate time, budget, and personnel ensures the project is equipped to handle challenges without cutting corners.
A CLM system should be more than just a new piece of software; it should be a strategic asset that supports your broader business objectives. When there's a disconnect between the CLM implementation and the organization's goals, the system's potential is diminished.
Failing to establish measurable goals that align with both company strategy and user needs can result in a tool that doesn't deliver meaningful benefits. Engaging stakeholders across departments helps ensure the CLM system enhances processes in a way that matters to everyone involved.
Implementing a CLM system in a silo is a recipe for resistance. Contracts touch multiple departments—legal, procurement, sales, compliance—and each has unique needs and challenges. Excluding these key stakeholders from the planning process can lead to a system that doesn't fit anyone's needs.
Early and ongoing communication with all involved parties fosters buy-in and collaboration. By understanding the specific contracting journeys of each department, you can tailor the CLM system to address critical pain points and improve overall efficiency
While your internal teams may be highly skilled, CLM implementation requires specialized expertise. Treating it like any other software purchase overlooks the nuances of contract management. Without experienced guidance, organizations might miss best practices, leading to a system that underperforms or fails to scale.
Engaging experts who understand the intricacies of CLM can help navigate challenges, streamline processes, and leverage industry insights that might otherwise be overlooked.
Implementation is where the rubber meets the road. It’s the phase that takes the best-laid plans and turns them into action. But even with solid preparation, challenges during implementation can derail the entire project if not carefully managed. For GCs, a bumpy implementation can lead to missed opportunities, frustrated stakeholders, and a CLM system that falls short of expectations.
Technology is a powerful enabler, but it's only part of the equation. Focusing solely on software features without considering the human element can hinder adoption. Users need to understand not just how the system works, but how it benefits them in their daily roles.
Neglecting change management—preparing staff for new processes and helping them navigate the transition—can result in resistance and low utilization rates. Remember, a CLM system is as much about transforming business processes as it is about technology.
A CLM system doesn't operate in a vacuum. Failing to integrate it with existing systems like CRM, ERP, or document management platforms creates data silos and duplication of effort. Without seamless integration, teams may find themselves entering the same data multiple times, leading to errors and inefficiencies.
Integration enhances visibility, ensuring that all relevant information is accessible when needed. It also streamlines workflows, reducing the administrative burden on your teams.
Even the most intuitive CLM system requires training. Offering a one-time training session isn't sufficient for long-term success. Users need ongoing support to fully leverage the system's capabilities and to adapt to updates or process changes.
Ignoring user feedback or failing to provide accessible help resources can lead to frustration and abandonment of the system. Investing in comprehensive, iterative training ensures that your team feels confident and supported.
Strong leadership is critical in driving CLM adoption. Without it, establishing consistent processes and governance structures becomes challenging. When departments operate in silos, the CLM system may be used inconsistently, undermining its effectiveness and potentially introducing compliance risks.
Leadership support fosters a culture of collaboration, encouraging departments to work together and align their processes. This unity not only enhances the CLM system's effectiveness but also promotes organizational cohesion.
Post-implementation is where the real test begins. Once the system is live, it's all about ensuring it delivers continuous value. However, without ongoing care, even the best CLM implementations can lose momentum. For GCs, a lack of attention during this phase can mean missed opportunities for optimization, unaddressed issues, and ultimately a system that fails to keep up with the organization's needs.
Implementation isn't the end of the CLM journey—it's the beginning. As we often tell our clients, “CLM isn't a sprint, it's a marathon.” Adopting a “set-it-and-forget-it” mentality ignores the need for ongoing optimization. Business needs evolve, and your CLM system should evolve with them.
Regularly monitoring performance against KPIs allows you to assess what's working and what isn't. By updating the system based on performance data and user feedback, you ensure it remains a valuable tool that continues to meet your organization's needs.
The value of a CLM system is only as good as the data it contains. For busy General Counsels (GCs) and legal departments juggling numerous responsibilities, keeping contract data up-to-date is a significant challenge. With constant contract negotiations, amendments, and renewals, information can quickly become outdated if not meticulously maintained. This isn't just an administrative inconvenience—it poses serious risks.
Outdated data can lead to missed deadlines, non-compliance with contractual obligations, and flawed strategic decisions based on inaccurate information. The legal team, often stretched thin, may struggle to allocate the necessary time for regular data updates and audits. This lack of bandwidth makes it difficult to ensure data integrity, undermining the CLM system's effectiveness.
Maintaining data integrity requires consistent effort and dedicated resources. Partnering with a managed service provider like Execo can alleviate this burden. Execo’s Contracts Catalyst offers ongoing, specialized support to keep your CLM system's data accurate and current, and even help with time-consuming tasks like drafting and redlining, allowing your legal team to focus on higher-value tasks.
A successful CLM implementation is not just about getting a system up and running—it's about transforming how your organization approaches contract management in a meaningful way. The journey is significant, but so are the rewards.
By anticipating and navigating potential challenges at every phase, from planning through ongoing improvement, you can unlock the true potential of your CLM system. Thoughtful preparation, active stakeholder engagement, and a commitment to continual optimization are what make the difference between just another software rollout and a strategic win for your business.
At Execo, we specialize in guiding organizations through every phase of CLM implementation. Our partnership with ContractPodAi combines deep industry expertise with cutting-edge technology solutions. We're here to ensure your CLM system doesn't just manage contracts—it becomes a dynamic tool that drives efficiency, enhances collaboration, and supports your strategic goals. Reach out to us today to learn how we can help make your CLM initiative a resounding success.