Many executives report a high degree of anxiety when purchasing technology. Nowhere is this more prevalent than when they select their core 'system of record'. It makes sense: these platforms (e.g. ERP, CMS, HROS, or CMS) manage their function’s core information assets, and hence, are high impact/low frequency decisions that will 'echo in eternity’.
Here are the top 10 mistakes we see executives make when buying a contract management system:
1. Confusing 'Contract Storage' with 'Contract Management'
Any database can store a contract, and many 'contract management systems' do little more than just that. However, these storage systems atrophy over time, primarily because they rely on people going out of their way to manually store their contracts.
Contract Management Systems should manage the contract’s full lifecycle. From contract automation and negotiation, through to workflow, approvals, and eSigning, plus retrieval, management and analytics.
This 'end-to-end' workflow helps you get contracts done efficiently and with less risk. As a bi-product, they 'sugar coat' getting the contract into the system.
Our advice: Buy a solution with integrated workflows (e.g. Contract Approval & Signing). It will boost productivity while delivering a well-structured System of Record.
2. Indexing on ‘too old’ (or ‘too new’)
Many enterprises index on solutions that are 'big brands', believing these are the safe options. However, oftentimes these solutions are only well known because they’ve been around forever.
It’s unlikely you’d buy a car that was designed 20 years ago, nor should you buy 'soviet era software'.
On the other end of the spectrum is 'bleeding edge’ technology. New vendors are often innovative (and will have beautiful user interfaces), however they often haven't been tested sufficiently in the market.
When it comes to maturity, you should apply the goldilocks principle: 'not too old, not too new'. Our advice: Buy a modern, cloud-first platform with an excellent client list.
3. Buying the past, not the future
Linked to the above, most buyers compare software based on 'past feature development' not 'future feature development". The issue here is obvious: you’re using the solution of the future, not the past. Smart executives evaluate both the current product as well as the future roadmap (which good vendors will supply upon request).
Our advice: Try to get a measure of product velocity from your vendors. How many features did they ship each year in the past three? Are they increasing investment in the product, or is it trending to obsolescence?
Read more: Buy the future, not the past
4. Failing to assess the 'machine that makes the machine'
Ultimately you’re not buying code, you’re buying a group of people who are claiming they will make you more successful. Many executives get distracted by the features of the product and miss that the key is the people.
Our advice: Ask how support works. Ask about the vendor's Customer Success program. Who will own the relationship, and what are the associated SLAs?
5. Limiting licencing structures
Most software is still sold on a seat licence basis. This is convenient for the vendor and inherently limiting for the client.
Most employees touch contracts in some form, however seat-based licences can prevent these people from accessing the value of the CMS. Worse, this means Lawyers become contract admins.
It is like a bank buying an ATM that requires a teller to operate.
Our advice: Find a vendor that provides an enterprise-wide licence at a reasonable cost.
6. Missing requirements
It’s difficult to envisage all of the critical requirements prior to buying a Contract Management System, particularly if you haven’t bought one before. As such, many executives miss materially important requirements.
Our advice: Use our RFP template to ensure you’re not missing important requirements.
7. Business case failure
Many executives anchor their business case on their function’s needs, instead of the businesses outcomes.
Our advice: To create a successful business case, work back from the company’s key strategic priorities. Learn more about building a CFO-friendly business case for Contract Management Software.
8. Going DIY
Naturally, when an executive wants to embrace technology they reach out to the IT function.
However, well-intentioned IT business partners often come to the discussion with two significant biases:
They have a directive from the CIO to reduce support costs by limiting the introduction of new technology.
They would love to build something. Corporate IT folks feel they spend their days doing boring stuff like support, security, and integration; while their friends in startups are building cool stuff every day.
As a result, the legal function then spends 9 months trying to take a square peg (like SharePoint) and make it fit a round hole. Then they find that no-one will use it, and the IT function won’t support it.
Our advice: License a fit-for-purpose SaaS product off the shelf at a fraction of the cost.
9. Under-focus on adoption
A large proportion of the success of your project will be defined by how quickly you can get to value. The reasons for project delays and failure are not a mystery, and most can be mitigated if understood.
Read more about the pitfalls of technology implementation and adoption in The Legal Technology Adoption Doom Loop.
10. Isolated adoption
We’ve seen some executives buy DocuSign, then a contract management system, then a matter management system and then get super frustrated when they don’t work because people have to manually move information from one system to another.
Or they have to spend more than the systems themselves to get them to integrate, only to have an upgrade break the integrations.
Our advice: Buy an integrated, modular platform that allows you to grow and expand over time.