You know your CLM initiative would be good for your company. It’s obvious to you, but you don’t hold the purse strings.
So how do you articulate what the business case and ROI is to management in order to help get this project funded?
Below, we help outline how we have helped some of our clients justify the expense to be able to fund the purchase and rollout of CLM software. The good news is, this is about the easiest business case you can make; when an entire department lacks any meaningful technology, the first technology in can make a huge impact on the organization.
Why Implement CLM Software?
Contract lifecycle management is key to the performance of a growing business. A good CLM software allows businesses to create, execute, analyze and monitor the entire contract process from end-to-end, to mitigate risks, save costs and time, create a contract repository, among many other benefits.
Large companies are adopting CLM software such as Akorda's, which also has integrations with CRMs to speed up their sales processes and legal procedures.
The main benefits of adopting CLM software are:
- Reduces costs and time around a contract workflow.
- Saves money and avoids litigation from contract non-compliance.
- Improves visibility, accessibility, and organization of the contract process.
- Enables automatic tracking and reporting.
- Optimizes the contract signing process, using integrations such as Adobe Sign or DocuSign.
4 Tips For Selling CLM Software to Your Stakeholders
Now that you are committed to seeking the approval of your team or stakeholders to adopt CLM software, we recommend that you follow the following tips to make your pitch as convincing as possible:
Think About Your Target: Who Cares?
Firstly, know your audience.
Are you talking to the CEO, the CFO, or maybe just your boss?
One thing they will all have in common is they will be asking themselves: why should I care about this? Will this change anything for the company? Will this change anything for me?
Therefore, the first step is to work out whom you’re speaking to and what answers will you give to these questions.
Do you present your case verbally or with quantitative evidence? What works for one type of person may not work as well for another.
If you are talking to the General Counsel of your organization, you will want to use a different approach than if you are pitching the CFO. The same goes for the CEO, the head of legal operations, or the head of sales.
That said, all these stakeholders and more are involved and benefit from implementing CLM. This is part of the reason CLM makes for such a strong business case.
In music, they call a catchy melody a hook. It’s what a songwriter will use to build an entire song around. So what’s your hook? What will make people sit up and listen to you? What will make them care?
A good hook in a pitch can be drawn from your audience's needs, from their pain points. If, for example, your company's contract processes are very extensive and generate a lot of costs, then this is where you can get the most obvious advantage.
Remember that a good pitch points to a problem and provides an undeniable solution.
The Use Cases
How well do you understand your business? How well do you understand the pain points in your contracting process? Are you dealing with high-volume deals negotiated on your paper? Or might you be looking for improved efficiency on 3rd party paper review as this is the bulk of your business? Or perhaps you want to understand how you negotiate, so you can operationalize your legal decision-making?
Knowing what use cases are important to your business ensures you are aligned both internally with all the constituents involved, and externally, as you seek to find the right solution for your company.
Below are some very common and powerful use cases we often see for CLM:
- Increase efficiencies across the entire company
- Reduce legal and business risk in the contracting process
- Accelerate deals to get revenue in the door faster
Breaking these down further, increasing efficiencies can be demonstrated in numerous ways, including tracking and managing contract versions in one place, to providing historical negotiation data to allow for faster decision-making on exception handling.
Reducing legal and business risk in the contracting process can be seen in the use of analytics to highlight “custom” language (e.g., unlimited liability), as well as ensuring the business is aware of upcoming renewals.
Finally, deal acceleration includes the ability for sales to self-serve and the automation of the signature process for finalized agreements.
Summing up, the adoption of CLM software helps the company on both the offense and defense. On offense, it automates all the key phases of the contracting process. This in turn has the downstream effect of drastically reducing contract cycle time, while at the same time leading to significant improvements in cost savings and efficiency by allowing the legal team to do more with fewer resources.
On the defense side, understanding and automating CLM software can play a pivotal role in limiting an organization’s exposure to risk by reducing missed obligations and increasing compliance with contractual requirements, as well as preparing the company for investor and M&A transactions.
By understanding your use case requirements, adapting your approach to match your audience, and working out what they really care about, you will increase your chances of making a successful business case for your CLM software.