We often hear horror stories about how contract management systems have failed to deliver the value originally expected. About how some companies abandoned a system shortly after it was implemented. This is not what we want to happen after spending thousands of dollars implementing a new system. Let’s look at some of the reasons for contract management system failures and how we at ABiz can help.
Processes – Many companies have processes on how contracts are managed. Some don’t. Those that do range from having theoretical processes which don’t work in reality, to having inefficient and inadequate processes. In any of those circumstances, your contract management system will not help you avoid having processes. What it should do is force you to look at your processes. Prior to determining the system that will work for you, the processes should be reviewed, created or enhanced. The appropriate system should be selected based on the requirements described in your processes and then implemented as a tool to streamline those processes.
Unrealistic Expectations – I have heard so many times that having a contract management system will solve all of contract management problems. We just have to put the contract in the system and all of our questions are answered. Only partially true. This depends on how it was implemented and what questions you want answered. There are certainly many benefits to implementing a system, but expectations should be centered around those benefits. There are many ways to “configure” a system. This involves creating the workflow a contract takes from creation to repository to archiving. It involves the fields extracted for repository management, the reports and search criteria, the development of clause libraries and intake forms. On and on. Done correctly, your system will deliver value for years into the future.
Inadequate Staffing – This is in alignment with unrealistic expectations, above. Many companies think that a system will eliminate the need for people since manual labor is reduced. While certain roles may be reduced or eliminated with a contract management system, other roles will be necessary to make sure the system is effectively operating. If there are questions, system issues, requests for new users or management of existing users, who handles those requests? Is data extraction required to get a contract into the system or validate what has been automatically extracted? Staffing requirements should be re-evaluated to determine the types and number of personnel required to manage the system and the data effectively, as well as create and manage the contract.
Training – Training is a key component in every system implementation. You must learn how to operate within the system in order to use it effectively. In addition to live instruction, other tools such as user-based quick reference guides and training manuals will facilitate the learning process.
Communication – Change is difficult for most people. Moving from a manual process to a new system will definitely be a big change. Communication and inclusion of those most affected by the system is essential for system adoption. Helping them to be comfortable with the system, the changes that will be experienced when using the system, the system benefits and “what’s in it for me” will facilitate adoption of the system when it is ready to be used.
Our leadership consists of contract management practitioners with numerous years of experience across a wide range of industries. Our consultants and associates have a deep knowledge of all aspects of the contract lifecycle and contracting best practices with expertise based on actual experience combined with theory. This allows us to bring integrity, collaboration, and experience in our approach to delivery innovation and superior results – every time! What are you waiting for then?
by Nancy Nelson