Enterprise CLM Software: 5 Key Attributes
Google contract lifecycle management (CLM) software and you’ll quickly come across the term “enterprise,” which vendors use to denote solutions suitable for larger organizations.
However, vendors often use this term loosely without defining what enterprise class truly means.
Despite the ambiguity of the language, prospective buyers looking for an asset to help their organization achieve multiple goals need to understand the concept of enterprise-class.
Let’s explore this below:
What is enterprise CLM software?
Enterprise-class software delivers secure, scalable, reliable, and cost-effective solution capabilities for organizations with more than $1 billion in revenue and/or 1000 employees.
An enterprise contract management solution suitable for an organization this size will have these five key attributes:
1. Purpose-built to support multiple groups
The opposite of enterprise is departmental. These solutions best suit single teams and support a single project or initiative. And with a departmental solution, the buyer doesn’t have to get any other department’s agreement, support, or budget.
For example, the legal department may need a solution to support a recurring quarter-end hockey stick of contract approvals for the sales team. Or the procurement department might need a CLM tool to help manage a handful of major outsourcing agreements.
While these initiatives are critical to a business, the best solutions (and initiatives!) support the needs of an entire organization. Organizations with multiple redundant solutions eventually downsize to the most capable one(s) – and departmental solutions are often the first that the CIO cuts.
Here’s how to determine if a solution can serve multiple groups within an organization:
- Review Analytics Capabilities – If the solution comes packaged with reports and data for the project or initiative owner and no one else, it’s not enterprise. For example, with procurement and outsourcing agreements, the solution must also provide analytics to finance, the legal team, and suppliers – not just procurement.
- Determine Capacity To Handle Different Contract Types – Each contract type may have fully differentiated workflows, template libraries, and user privileges without implementing the software again. For example, a sales cycle contract initiative must support NDAs and real estate agreements in the same instance.
2. Can scale to support a higher volume of contracts
The most common complaint I heard as an analyst covering CLM solutions was that the solution deployed did not scale up to support the volume and size of contracts for the client.
To evaluate scale, consider these aspects:
- Contract Size – Contracts that are 100 pages long and have 6 attached schedules or addendums take up much more cloud storage than 2-page non-disclosure agreements. So, one company’s 500 contracts might need much more space than another’s. Some organizations that underestimate can pivot quickly and buy more storage depending on the CLM provider. More often than not, they have to start over with a different solution.
- Contract Volume – I worked with a healthcare insurance company that had 900,000 agreements. They implemented and then ripped out multiple solutions because their high contract slowed solution response time. Search can also be an issue when you have thousands of contracts to manage. Enterprise CLM software provides plenty of filters so users can quickly locate the agreement they need.
3. Supports logical privacy and security needs out-of-the-box
Because they form the legal basis for the most important agreements in the enterprise, contracts commonly contain highly confidential data such as your pricing, special concessions you have made for key customers, and details about critical outsourced design work.
Losing this data can be catastrophic to the enterprise and against legal regulations such as GDPR.
Therefore, an enterprise-class solution must offer out-of-the-box capabilities to protect the enterprise’s information, customer identities, and proactively prevent data loss. This might include encrypting data at rest and in transit, enterprise control over where data is stored, and admin capabilities to limit who can access contracts.
You also want features that deter cyber hacking, such as logging and monitoring services.
Capabilities and approaches to protect security and privacy are very rapidly evolving. It’s essential to consult your chief security officer or CIO to determine what protections must be in your enterprise CLM software.
4. Includes implementation and configuration resources
Enterprise software comes with enough customer support and resources to support large teams.
A clever member of your staff could manage a small CLM implementation on their own, but an enterprise implementation is a heavy lift for a single individual.
An enterprise software vendor should provide substantial resources for successfully configuring and deploying its software. These resources can include implementation partners (systems integrators), training programs, and/or an in-house implementation team.
Check for enterprise-level support by querying references on what they used and how it went.
5. Connects with other enterprise systems
Some of the strongest opportunities for enterprise process improvement lay in connecting applications that use the same data.
For example, CLM solutions store contract price schedules, but the finance team of the same organization uses completely different systems – financial suites – to pay invoices that conform to the contract price schedules.
Without a systematic connection, there is a natural opportunity for significant contract compliance issues.
Just as an enterprise CLM solution can support multiple departments, it should easily integrate with other enterprise systems. Your prospective solution should have built-in APIs suitable for various use cases backed by a list of reference customers with successful cross-application integrations.
Implementing Enterprise Contract Lifecycle Management Software
So, let’s summarize. CLM software designed to stand alone for a single project or contract type is unlikely to be anything more than a departmental solution.
Ensure you’re giving setting your business up for success by putting a CLM tool in place that truly is enterprise-class.
Debbie Wilson has delivered market-driven insights, strategic vision, and expert guidance to leading enterprises around the world for more than three decades. As Gartner’s lead analyst covering procurement and CLM technologies, and later as group leader for procurement, finance, and ERP, Debbie became widely recognized as one of the industry’s most respected thought leaders in procurement technology innovation, adoption best practices, vendor selection, and automation strategy. Her mission is to share her knowledge, passion, and experience to help enterprises identify and deploy the right CLM solutions to transform their contracting.