The Lofty Promises of CLM
Contract Lifecycle Management (CLM) systems were introduced with grand ambitions: to eliminate friction, streamline processes, bring order to contractual chaos, and accelerate deal cycles. The promise was transformative—a future where contracts moved effortlessly from initiation to completion, compliance was automatic, and tedious tasks like data entry were a thing of the past. This vision captivated organizations eager to revolutionize their contract management processes, driving them to invest heavily in these systems with hopes of achieving unprecedented efficiency and value.
The Common Pitfalls of CLM
However, the reality of CLM often diverges significantly from these early promises. Despite the bold claims, many organizations encounter a range of challenges that hinder their ability to fully realize the benefits of CLM. Issues with data organization, compliance, reducing tedious work, speeding up processes, and unlocking contract value have proven to be more persistent than anticipated.
Rather than ushering in a new era of seamless contract management, CLM implementations can devolve into protracted and complex endeavors. Organizations frequently find themselves entangled in lengthy implementation cycles, struggling to achieve the streamlined operations they were promised. Moreover, misaligned incentives among consultants—who may prioritize their own financial gain over the client’s needs—can lead to the adoption of CLM products that aren’t a perfect fit, further complicating the situation.
Another common issue is the tendency for CLM systems to attempt to do too much, too quickly. By trying to integrate with every possible system and address every type of contract, these solutions often stretch their capabilities too thin, resulting in fragmented and inefficient implementations that fail to tackle the most pressing contract management challenges.
Read our latest blog “Implementation Challenges and Misaligned Incentives: Contract Lifecycle Management Pitfalls” to learn more about the CLM pitfalls.
The CLM Marketing Conundrum
A glance at CLM marketing messages reveals a striking uniformity in the promises across various platforms. Regardless of the vendor, the themes are the same: faster deal cycles, reduced manual work, organized contract management, and unlocked value. While these promises are enticing, they often paint an overly rosy picture that doesn’t align with the reality many organizations face.
For example, despite assurances of quick deployment and immediate return on investment, the actual time and effort required to implement a CLM system can be significant. The touted benefits of enhanced compliance and streamlined operations are frequently overshadowed by the challenges of navigating complex configurations and overcoming internal resistance to change.
In fact, according to Gartner, by 2024, 50% of CLM implementations are expected to fail to deliver the anticipated value. This statistic highlights the growing skepticism surrounding CLM systems and underscores the disconnect between marketing hype and real-world outcomes.
Bridging the Gap
The disparity between the promises of CLM and the actual experiences of organizations underscores the importance of a more measured and strategic approach to contract management. Companies must move away from the one-size-fits-all mentality and instead focus on defining specific, realistic goals, addressing core pain points, and implementing solutions incrementally.
While the allure of CLM remains strong, it is crucial for organizations to temper their expectations and be mindful of the practical challenges involved. The journey of implementing CLM offers valuable lessons for navigating the complex world of contract management. With a clear-eyed view of both the potential and the challenges, organizations can chart a path that truly enhances their contract processes and delivers on the promise of efficiency and value.
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