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The journey to world class business practices doesn’t happen overnight. When implementing a digital CLM platform, you need to start the digital transformation by focusing on four fundamental elements for successful results:

 

  1. people
  2. processes
  3. data
  4. the CLM system

A CLM system is a tool that contains a workflow that supports the complete lifecycle of contract management. A CLM solution can begin with a RFX,1 then cycle through contract negotiation, approvals, and execution. It also may include key elements of managing contract change, contract templates or clause libraries. Post-contract maintenance ensures continued value for stakeholders by providing guidelines for governance, risk, and compliance to mitigate hidden risks, etc.  A CLM system is an enabler to a digital transformation. The current trend of digital transformation takes an organization from isolated processes and paper contracts and old technology into the world of integrated, artificial intelligent technology.  

None of the four elements mentioned above are new. Although, many companies understand the importance of addressing all four, why do some continue to make the same mistakes? The answer becomes increasingly clear when we examine each element in more detail.

Before you can be moderately effective in a digital transformation, you must break down and address each element. Addressing only one will lead to either a failed business transformation or significant gaps during implementation. No digital transformation is flawless. Every organization’s planning, directions and digital transformation process will differ from others.

People - The teams need to get comfortable at being uncomfortable. In a digital transformation, the whole world that people operate within is going to change. In a transformational environment you need progressive risk takers to embrace failure and adjust quickly.

The way that work is done today is not how it will be done in the future. Not only does the future hold different roles for people, it also requires a change in the mindset. Instead of working with process-driven, paper contract templates, leaders now focus on innovating growth mindsets that challenge the status quo and seek advanced flexible analytical solutions.

The workflow in the system drives the process, approvals, routing, negotiation, execution, and change management of agreements. Some of the qualities needed for business transformation include effective relationship management with strong communication capabilities. It takes understanding the business and trade-offs, being able to interpret system-driven analytics and communicating how the benefit of all this will impact the business.

If you are going through a transformation, both training and communication will increase exponentially, because both are key elements during a normal course of managing your business.  We tend to underestimate the importance of understanding and accepting a message we send to our team. Effectively hearing, accepting and consuming a message is more important than how many times we send emails explaining to our team an intended message.

Let’s say your message to your team is “change is coming, it’s going to benefit you and here is how.” The more excited the team is and the more they can see a CLM helping their day-to-day lives, the more likely they are to hear and accept the message.

Training is another facet of communication. It surrounds many aspects of the transformation like how the work is to be performed in the system; how it will benefit the team; and how the processes will change.

Processes, like clutter, accumulate over time and in some organizations arise from exceptions rather than general guidance of what to do. The typical question I get surrounding processes is: “Which comes first -- clean up the process and align it to the system to determine the solution or select the system first, then align the process to the system?”

This decision ultimately goes back to a culture or a question of who is driving the transformation -- the business or IT? Either way, the processes, in their end state, will need to be updated to reflect the future state of how the work will be performed or what the workflow will be.

If you lack the necessary process updates, you will deal with confusion, misalignment and gaps in the roles the team performs. The processes should also be completed before the solution is implemented, because the cleanup work after an implementation leads to potential compliance gaps with the requirements or at very least, more confusion around the team members’ role clarity.

I work to clean up the clutter first. Then, update any requirements involved. I continually ask my stakeholders and customers about the requirements they need or are dealing with. Is it a regulatory or legal requirement? Or is it just the way we’ve done it?

If the answer to the question, “is it a regulatory or legal requirement?” is “no”, then why do we need that requirement? Likewise, the answer “that’s the way we’ve always done it” does not mean it’s right or it’s how we should do it in the future.

It is a continuous challenge to pull the team out of how they do their work today and bring them into the future state of contracting. The processes plus the need to change and how that need is communicated circles back to the people element of a digital transformation.

Data

The age-old adage “garbage in garbage out” holds true when transitioning data from an old system into a new one. Every piece of data is important. Every piece of data needs to be evaluated to determine its necessity in the new system whether it is part of a contract, a duplicated purchase order generated from that contract or just a repositioning of commas and periods within the contract language. So, it’s important to double check the following:

  1. Ensure that your old and out-of-date data is removed.
  2. Make sure to do at least 2 to 3 mockup data loads before going live.
  3. Don’t underestimate the time you will need to cleanse the data.
  4. Remember the importance of keeping the data clean after you have taken all the initial cleansing actions.

These four steps may sound easy but they are not. Sifting through hundreds of thousands of contractual and supporting documents is intense. Finding answers to questions like, who “owns” the data may seem simple, but instead could complicate or prolong this part of your overall data management process.

System

Which comes first, defining the CLM solution, and adjusting your contracting processes to the system workflow or processes or reviewing the process updates and adjusting the system to fit the standard process flow?

If the system platform is intended to be “best in class,” with workflow based on industry standards, wouldn’t companies consider adjusting their processes to fit within the standard workflow of the system?

Regardless of the approach you choose, it is critical to make certain that the system meets your current and future needs. This requires a contracting strategy and vision that is enabled by a system. Is the system -- whether it is a CLM, supplier relationship management (SRM) or any other tool -- working to enable the team to perform their job efficiently. The system is only as good as all of the parts put together. These are the people, data and processes -- all of which must align with the vision of the business and a strategy that supports that vision.

No CLM or system implementation is flawless so expect the unexpected. No matter how much planning and preparation teams may do, no implementation is without some type of glitch or challenge. The key to minimizing possible mishaps is to fully address all elements of the transformation: people, processes, data and the system.

And, do not underestimate the complexity of these four fairly straight forward elements. Working effectively within each one requires a highly productive team consisting of your CLM provider, your IT organization, your development or implementation team and the end users to be engaged in every aspect from planning through troubleshooting for any defects once the system is live. Always hope for the best and plan for the worst!

Good luck!                   

ABOUT THE AUTHOR

Kim Miller is the Executive Director of Supply Chain Business Integration and Analytics leading the Enterprise Supply Chain digital transformation at The Boeing Company. In this role she leads a team responsible for transforming contracting and supply chain systems that affect people, processes, service delivery and integration methods for future operations. She has been leading this transformation since late 2017 as the digital strategy has been evolving. Throughout Kim’s career, at Boeing, she has held many positions in contracting, supply chain, compliance, and production support and production readiness.

END NOTE

  1. RFX is an acronym used in either the buy or sell side of contracting referring to Request for Proposal (RFP), Request for Information (RFI), Request for Quote (RFQ), and Request for Bid (RFB). Reference article titled What is RFX software (GEPSmart online).

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Kim Miller, Director, Supply Chain Business Integration & Analytics, The Boeing Company


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