Getting CLM-ready: a 7-step Guide

In today's fast-paced legal industry, technology has revolutionised the way contracts are managed. Contract Lifecycle Management (CLM) systems have emerged as a powerful tool to streamline processes, mitigate risks, and enhance productivity. However, adopting the right CLM solution requires a well-planned approach. In this blog post, we will guide you through the essential steps of conducting a business requirements gathering and prioritisation exercise before investing in a CLM system. By following these guidelines, you can optimise your approach and make informed decisions aligned with your organisation's needs.

Step 1: Understand Your Business Objectives

Begin by defining your organisation's business objectives and goals related to contract management. Whether you aim to create a central database for all your agreements, increase contract compliance, reduce cycle times, improve visibility, or enhance collaboration, aligning your CLM strategy with these objectives is crucial for success. By clearly articulating your goals, you can focus on finding a CLM solution that meets your specific needs.

Step 2: Assemble a Cross-Functional Team

To ensure comprehensive requirements gathering, create a cross-functional team comprising members from legal, procurement, IT, finance, and other departments who will either use or benefit from the tool. This diverse group of stakeholders will bring different perspectives and valuable insights to the process. Collaboratively working with this team will help identify a broader range of requirements and ensure buy-in from all key stakeholders.

Step 3: Conduct a Current State Analysis

Evaluate your current contract management processes, systems, and challenges. Identify pain points, inefficiencies, and areas that need improvement. Engage with end-users and stakeholders through interviews, surveys, and workshops to gather feedback. Analyse existing contracts, workflows, and approval processes. This analysis will provide valuable insights and a baseline for defining your CLM requirements.

Step 4: Define Key Functional Requirements

Based on the current state analysis, identify the key functional requirements for your CLM system. A functional requirement is a specific statement that describes what a system or software application must do to fulfil a particular business need or objective. Functional requirements focus on the "what" rather than the "how" of the system. In the case of CLM, these may include contract drafting and creation, automated approval workflows, contract repository and search capabilities, contract analytics, and integrations with other systems.

Step 5: Consider Non-Functional Requirements

In addition to functional requirements, consider non-functional aspects when evaluating CLM solutions. These may include data security, ease of use and support and training options. Assess the system's ability to handle your organisation's current and future needs, and prioritise these factors accordingly.

Prioritise these requirements based on their importance to your business objectives and the anticipated value they offer.

Step 6: Prioritise your Requirements

Prioritising requirements is a critical step in any project, ensuring that the most essential features and functionalities are addressed first. One common approach is to categorise requirements into three main groups: must-have, should-have, and nice-to-have.

Must-have requirements are considered essential and non-negotiable for the system's core functionality. These requirements directly align with the project's objectives and are critical for achieving success.

Should-have requirements are important but not as critical as must-haves. They contribute to the system's overall value but can be deferred to subsequent phases if necessary.

Nice-to-have requirements are desirable but not essential for immediate implementation. They are considered enhancements or additional features that can be addressed after the core requirements are met.

By prioritising requirements based on these categories, stakeholders can ensure that critical needs are met while maintaining flexibility for future enhancements and refinements.

Step 7: Evaluate Vendor Offerings  

Research and evaluate CLM vendors that align with your requirements and priorities. Compare features, functionalities, and vendor credibility. Seek demos, trial periods, or proof-of-concepts to assess the systems' usability and compatibility with your existing infrastructure. Review customer testimonials and case studies to gauge customer satisfaction and successful implementations.

Step 8: Prioritise and Validate Requirements

Once you have identified and evaluated different CLM options, revisit your prioritised requirements. Validate them with your cross-functional team and key stakeholders. Consider their feedback, assess the potential impact on your business objectives, and refine the prioritisation if necessary. This collaborative approach ensures that the selected CLM system will address the most critical needs of your organisation.

Conclusion

By approaching the business requirements gathering and prioritisation exercise for CLM procurement systematically, organisations can make well-informed decisions when selecting the most suitable solution. Aligning your CLM strategy with business objectives, involving a cross-functional team, conducting a thorough analysis, defining functional and non-functional requirements, evaluating vendor offerings, and validating priorities will pave the way for successful CLM implementation.