The Top 5 Mistakes Companies Make Implementing Contract Management Software

Implementing contract management software across your organization? What could go wrong? In a word: plenty!

That’s because the success of contract management software depends on how it is deployed and how it is used. Even a well-conceived implementation can encounter road bumps and detours; from our experience, here are five mistakes to avoid from the start.

Mistake 1: Failing to Involve Business Users in the Implementation

Most implementation planning comes from executive sponsors, IT staff, and a key person in legal or procurement. With company goals in mind, these project leaders value reporting contract data and accountability for contract status and performance. Often, they envision completed contract management software that will be presented to business users whose role will be to start using the news software as soon as it is live.

Yes, the business users will be trained. But will the processes and workflows of the automated contract management software reflect their lived reality of day-to-day contract management? Will their adoption of the new software be luke-warm or combative?

Implementation planning that fails to involve business users such as contract managers, purchasers, sales personnel, paralegals, and administrators creates problems and ignores opportunities for efficiencies. Here are three reasons:

  1. Access to Contracts and Contract Language. Business users know when they need access to contract terms in order to make decisions (purchasing decisions, for example). Contract managers and sales personnel, depending on their authority and role in the contract-making process, want access to standard contracts and clauses as they reach agreement with vendors and clients. The contract management software’s permissions and ease of access to contracts should help these users do their jobs, consistent with the company’s security goals, rather than impede them.

  2. Workflows Informed by Experience. Business users who shepherd a contract from draft to execution have seen it all. They know whose approvals depend on the input of previous deciders, and which departments need the flexibility to work on a contract collaboratively. In a hundred ways, contract managers and administrators use informed personal judgement to take a contract to its next step. Automated workflows designed without their input can be far too rigid and become essentially useless in practice, inviting workarounds. Input from business users can keep the workflows in line with actual practice, while still imposing discipline in the approval process.

  3. Two-Way Communication. Contract managers are often unsung heroes. They save the company money and keep the organization out of trouble by avoiding risk. The money they save on budgeted items and under contract terms can be incorporated into reports for executive consumption – but only if contract managers are brought into the planning process as the contract management software is implemented. By being part of the planning team, these business users can better understand how the new procedures required by the contract management software will benefit the organization, even where these require a change in user behavior. Communicating these benefits to their peers improves the adoption of the new software.

Mistake 2: Designing for the Exception, Not the Rule

Contract management software is built to be predictable but flexible. During an implementation, users create rules to handle different contracts appropriately. The contract type, its monetary commitments, its location of origin and jurisdiction, etc., will affect how the contract is handled: whose approvals are required and in what order they are sought.

Where implementations go wrong is in trying to automate contracts that are highly individual or present exceptional demands in the review process. These include:

  • Contracts with substantial individually crafted language by legal team

  • Contracts with highly negotiated terms

  • Contracts requiring repeated review before approval

  • Contracts that have company-wide implications (mergers, acquisitions, major changes in liability, unusual licensing agreements)

A well-meaning desire to do justice to the nuances of these kinds of contracts often leads to inordinate time and effort to create a complicated workflow with many conditions to handle such contracts. Save it for later. Implementation should start with high-volume contracts and processes that are predictable and repeatable. These are good candidates for automation.

Mistake 3: Aiming for a Comprehensive Software All at Once

Having a single electronic repository for an organization’s contracts is among the most common reasons that companies purchase contract management software. With this goal in mind, implementation teams often try to roll the software out for the entire organization on the first implementation. No one wants siloes of separate contract management software for sales, procurement, licensing … right? Set the software up, train everybody once, and move on.

Trying to implement software for everybody at once is a mistake. Here’s why: Different business functions have different requirements and approval processes. If you try to design a single software to meet all these demands, you will be overwhelmed. Alternatively, you will launch software with too many one-size-fits-all features, pleasing no one.

  • Working groups should not become unwieldy. Communicating with users and learning from their feedback is easier in a defined group where the main business goals of the implementation can be assumed. Here’s an example: a procurement team focused on domestic, indirect procurement has its own business goals and best practices that it will want contract management software to embody successfully. Getting the software right for that one group will teach the implementation team a lot as it moves on to other procurement groups, domestic and global, in the organization.

  • Cultures differ across divisions. Depending on the company, divisions can differ widely in function, processes, and above all leadership. Implementing contract management software will affect people across the business unit, so establishing trust and learning the divisions’ contract management practices requires attention from the implementation team. That attention will be hopelessly diluted if you are trying to implement across all divisions of a company at once.

Mistake 4: Unwillingness to Say “Pencils Down!”

Implementing software without taking into account the needs of different users, different functions, and different divisions is one mistake. But in our experience, so is refining the software indefinitely without a go-live date. By and large, implementation teams fail to launch the software for one of two reasons:

  • The Scope Is Too Ambitious. It may be that until the software can reliably handle all contract types across the organization – or even all contract types within a particular business function – the team is unwilling or unable to go live.

  • The Refinements Are Endless. In some cases, attempting to automate too many complicated approval processes or contracts with conditional clauses brings the implementation to a halt before any functionality hits the street.

To avoid these problems, we strongly recommend that companies implement contract management software in staged “business releases” where a defined business functionality is the goal of the release. Examples of “business releases” include:

  • automation of one or two contract types
  • automation of contract management process within a department
  • automation of simple contract requests by business users

The goal is to get working functionality into the hands of the business users by a certain date. By sticking to the recognizable goals of each business release, both IT and the business users know what’s coming. They look forward to releases that accomplish something of value to the contract management team. As more successful business releases follow, trust in the software builds.

Mistake 5: Failing to Plan for Ongoing Change Management

While “Solve the problem and move on” is sometimes good advice, it is an unwise approach to implementing contract management software. All too often, the implementation team launches the software with a week of training and no plan for ongoing help as business users employ the software. The problems can be two-fold:

  1. Re-Training and Support Is Limited. Companies know to offer major training when launching any software; they do not always handle the follow-up well. When business users run into problems, they sometimes have only two choices: a call to IT or a retraining scheduled for later, perhaps at an inconvenient time. A better approach is to identify and train key business users – ideally members of the implementation team – who can then handle questions that their colleagues encounter in daily use. Another approach is to make support available on a regular schedule that is frequent and convenient in the weeks following the initial roll out. A drop-in support desk available at midday can give users hope that their issues will be resolved the same day.

  2. Problem-Solving Is One-Way. If troubleshooting user issues is simply reactive, with IT retraining users on the software as it exists, companies miss out on the chance to improve the software. As the hands-on professionals who draft, approve, consult, and renew contracts, the business users can offer vital feedback to the implementation team. The team can then prioritize retraining in certain procedures or modify the way the software handles certain issues. When business users see their suggestions become part of the contract management software, their trust in the software grows.

Companies invest in contract management software for a reason: to make their handling of contracts more efficient and more effective. Learn from the experience of others – avoid the mistakes that keep the implementation of contract management software from succeeding.

Contracts 365 –the Leading Contract Management Software for the Microsoft Cloud

Contracts 365 is the leading contract management software for Microsoft customers. With usability, functionality, and security at the forefront of development, Contracts 365 addresses all aspects of the contract lifecycle through a modern, intuitive interface specific to your users. Customer First Cloud Architecture provides IT with the security of Microsoft 365 while powerful prebuilt integrations with Dynamics and Salesforce extend the platform to every part of your business. Please don’t hesitate to reach out to contact us or to request a demo.

Dermot Whittaker works with Contracts 365's technology and contract management partners to keep the company focused on current business needs.