If your organization has a Contract Lifecycle Management (CLM) platform, or is in the market for one, you may be aware of the tremendous ROI for a contract management system. A good CLM can provide overall ROI of 150-200% in one year.
But achieving that level of ROI is not as straightforward as simply installing a CLM platform. Contract management has many sources of value. The more completely your company can implement and deploy its contract management solution, the greater the benefits will be across the organization. In spite of this fact, many companies do not progress as far as they could in realizing the value of their CLM systems.
Forrester lays out the benefits of a contract management platform, as shown in this graphic.
The benefits are listed by the percentage of organizations that reach each progressive stage of implementation and are ranked in terms of maturity. This means that the higher the stage number, the more mature and well-developed a company’s contract management processes are.
This data shows that most companies do not realize the full ROI potential of their contract management platform. While nearly all reach the first stage (use the CLM as a contract repository), and a large majority reach the second stage (use the CLM as a method of reporting and analysis), only 56% of CLM users reach stage 3 (use their CLM for contract authoring and negotiation). The leap to stage 4 is even more dramatic, with most companies never bridging the gap: a mere 18% achieve integration of their CLM with external systems, and even fewer, only 11%, achieve integration with sibling applications (such as eSourcing and CPQ). The farther your company can progress through these stages, the greater the value realization it will have from its contract management solution.
In order to reach a stage 4 (and eventually 5) implementation and achieve the maximum ROI possible on your contract management investment, your company needs a solution that can integrate seamlessly with external systems and sibling applications. Finding a solution that is 100% configurable to meet your company’s needs is also a key feature to look for. A solution like Conga Novatus, for example, has integrations that include ERP, CRM, CPQ systems, using its API or Integration Hub.
For more information on effective CLM implementation to achieve maximum ROI, as well as a roadmap for how to get the decision-makers in your organization on board, download our eBook, Making the business case for contract management.