The shift to contract management software is a worthy transition that the business and industry-leaders of today are making. To increase the likelihood of a smooth and well-informed transition for your business, it is necessary to understand potential pitfalls you might encounter in the implementation stage of adopting contract management software.
Challenge 1: Taking the Implementation Stage Too Fast
New challenges will be presented to your business and employees when learning a new contract management software system. By setting the intent of having all divisions of your company on the same page with your new software, it can create an easy, efficient transition for everyone.
Due to the nature of contracts, there will be varied needs and approval requirements across different sectors of your business. When designing your system based on your contract management software, be sure to make appropriate changes that are conducive to the various divisions within your business. An employee in licensing will approach the contract workflow differently than an employee in marketing or sales, for example (Thomson Reuters).
When presenting the software to each of your company’s teams, take the time to receive feedback team-by-team. We also recommend that you ensure that the business objectives by implementing the software are correctly comprehended by employees. With proper expectations set within each division of your company, it will set each team up to successfully begin using the software. When working with each division, it is necessary for the implementation specialist(s) to understand the dynamics of company culture to establish trust.
Challenge 2: Misunderstanding by the Business User of Modern-day Contract Management
Prior to adopting a digital contract management system, we recommend taking an assessment of how contract management has shifted and changed in the modern-day. By understanding the needs and deficits in your current system, you can gain a greater understanding of how new software can fill those needs.
Consider asking yourself the following questions regarding your current system and its areas for improvement:
- Is our current contract-creation process time-efficient?
- Are there disorganized or disjointed system faults that lead to time-consuming approval rates?
- Would our system benefit by adding or reducing a single step?
- Are there any bottlenecks in our current process?
- Does our system accurately track due dates in an orderly manner?
- Is there room for growth and improvement in our contract activities and templates?
- Where does automation fit best within our current contract management system/process?
- Do our current systems, filing procedures, spreadsheets, etc. work as effectively and efficiently as possible?
- Are there new tools that would benefit our contract management system?
- Are there tools we no longer need?
- In what ways will implementing contract management software be a catalyst to new practices that will improve our current system?
Challenge 3: Automating Individualized Contracts Rather than Repeatable, Formularized Contracts
Contract management software can benefit your business due to its efficiency, flexibility, and predictability. To reap these benefits, it is imperative to automate contracts that are used most.
When you initially add contract management software, you are given permissions to add rules that will manipulate different types of contracts in a specified manner. Items such as the type of contract, approvals required, origin, financials, and order of contract workflow will determine how the contract is managed within the system (Whittaker, 2018).
Contracts that should be designed on a case-by-case basis will include one or more of the following characteristics:
- Highly negotiable
- Contains impactful and significant corporate actions
- Saturated in legal language
- Requires multiple reviews prior to approval status
Challenge 4: Failure by the Implementation Specialist to Plan for Continued Help and Change Management
As a business user begins using the system and becoming familiar with its processes, it is the implementation specialist’s responsibility to plan for need for continued help, change management, and needs of the business user. Businesses select contract management systems to increase their contract management efficiency and productivity.
Implementation specialists should do two things: create two-way problem solving and offer extra support when requested. Business users have valuable feedback to provide implementation specialists that can offer the chance to improve system functionality (Agarwal, 2020).
If you adopt a contract management software system and encounter issues, you might find yourself either (a) scheduling a retraining session, or (b) calling IT. An experienced and solutions-focused implementation specialist or team will be a professional at following-through with your questions when you experience issues with the software. Implementation specialists should train certain company employees on the software so they that can take-on questions their co-workers might face on a typical workday. Implementation specialists can also provide a system support desk at a consistent time daily to aid business users on a same-day basis.
Challenge 5: Ineffective Communication Between the Implementation Specialist and the Business Owner
What leads to problems and breakdowns in communication between these two parties?
- Excluding the business user when employing contract management software creates deficits in the user’s understanding of day-to-day contract management processes
- Failure of the implementation specialist or contract manager to communicate the benefits of implementing a contract management system to the business user
- Misunderstanding of workflows and the stepwise process of managing contracts within a new, digital format
- Inaccessibility of standard contracts, contract language, and clauses during the contract-creation phase to ensure company security and quality contract-creation
Challenge 6: Failure to End the Refining Process of System Implementation
The best remedy to this issue is goal setting. Set a specific, time-bound goal of a calendar date to take the contract management software system live.
Contract management software systems ultimately fail at the implementation step because of continual refining and unrealistic expectations. We recommend you focus on the big picture of system performance, rather than automating an exceptional number of conditional contracts or lengthy approval processes. Unrealistic expectations of a demanding system that can handle all contract types presents several roadblocks to the implementation strategy.
Our recommendation is to implement contract management software in specific phases to ensure optimal functionality company-wide. This might look like automating a specific contract type or automating a contract management process based on individual business departments.
Keeping these six challenges in mind can prepare you in your implementation strategy of contract management software. Understanding these challenges can also help you know what to expect from the implementation specialist during this stage.
By having a solution-focused effort between the business user and the implementation specialist, you can ensure success when you undergo the transition to managing contracts in an electronic repository with your contract management software. The success of a contract management software system is dependent upon the efforts and strategy used in the implementation stage.
All in all, the end goal is to have a properly functioning system in place that provides ease and efficiency in your company’s contract management processes. Effective implementation ensures that all departments will have familiarity and an understanding of the software – providing them the ability to go to the appropriate resources for troubleshooting when needed. Contract management software serves to provide great value to any contract management team, especially when the switch to the software is a particularly smooth one.
Agarwal, M. (2020, January 8). Why do contract management tools fail? https://journal.iaccm.com/contracting-excellence-journal/why-do-contract-management-tools-fail.
Thomson Reuters. (n.d.). How to develop and implement a new contract management system. How to develop and implement a new contract management system | Thomson Reuters. https://legal.thomsonreuters.com/en/insights/articles/how-to-develop-and-implement-a-new-contract-management-system.
Whittaker, D. (2018, October 12). The Top 5 Mistakes Companies Make Implementing Contract Management Software. Corridor Company. https://www.corridorcompany.com/blog/the-top-5-mistakes-companies-make-implementing-contract-management-software.
Written by Lindsey Paulk
Lindsey Paulk is a Content Writer in Jacksonville, Florida that specializes in digitally communicating all-things contract management.