This month, Xakia CEO Jodie Baker muses on the state of contract management -- why so many contract management projects fail and what can be done to fix the challenges.
Is it true that the U.S. is littered with the graveyards of failed contract management projects? And if yes, why?
In-House legal teams come to Xakia to fix a myriad of pain points in their workflow. Contracts are one pain point, but they may also need to address their matter management system, spend management, legal intake and more.
When it comes to contract management, approximately half of the in-house legal teams who come to us have already tried ‘something’ to solve their contract workflow pain points. What we see is one or more of:
- An expensive system that has been implemented but not used.
- An expensive system that has been procured but is (many years after the procurement) still not live.
- An expensive system that has been implemented but addresses only a single pain point. Budget has been exhausted.
To be clear, the third of these is the best – at least something has been solved.
True story: A global team had serious problems with their contract management workflow. They spent a year and a truckload of money with a consultant working out how they could ‘simplify’ this process. They came back to us with a very impressive workflow diagram, a very long list of ‘must have’ requirements and a request to participate in their RFP. Hmmm. As far as we are aware, there is not a single system that addresses all of these ‘must have’ requirements.
[Side note: their budget for software was extremely tight… having spent it all on the consultant...]
What is going wrong?
- Eyes too big. You might want it all but change and digestion are hard. It’s easy to dream big and much harder to execute. Keep it simple, appropriate to your bandwidth and your budget.
- The (wrong) consultants. Did you select a consultant who aligns with your organization’s operational realities? A misstep here can be crucial in determining budget blow-out. Success often lies with those who simplify rather than overcomplicate the process and solution.
- ROI too hard to achieve. A software investment should give you a minimum 3x ROI. If you are over-paying for software + consultants, this gets hard to achieve.
Keep it smart AND simple to ensure you are not one of the failed contract management projects. Think of your project iteratively – one layer at a time. And remember that great solutions do not have to be expensive to be effective.
Start your contract management project strong. Click here to download our tips for solving your top 10 challenges.