Historically, contract management services were offered by Legal Process Outsourcers (LPOs) but now much of the market (and advertising) for contract management or contract lifecyle management products is flooded with pure platform offerings without services. As the market has evolved, so too have the tools and techniques offered by not just technology companies and LPOs but increasingly by other BPO operations as well. I’d like to spend some time exploring the world of contract lifecycle management tools and take a closer look at some of the great innovations in recent years. Technology advancements in this area are terrific for the consumer and a clear indication that this market exists and continues to grow and evolve. There are niche products and tools which focus on particular aspects of the contract lifecycle. However, it is important to note that what may be great for one part of the lifecycle may not work for another. Other tools are pure utilities players and cover many of the bases well but none of them as a specialty.
I don’t want to advocate for one path or another or endorse specific tools over others. But I would like to at least pose a framework for thinking of tools so that companies can consider their needs. Regardless of the tool, I strongly believe that tools need a layer of service in order to reach their full potential. Tools and technology are a key part of the stack, but without the process and service layers the full value is missing.
· Procurement Tools that Do Contract Management
Given the necessity of contracts as part of the Procurement process, it is not unexpected that there would be some contract lifecycle management add-ons to the solution. Contract lifecycle management tools often do an excellent job of managing pre-signature contract creation and workflow. But where they are often a little weaker is on compliance management, change order management, invoice management and other post-signature aspects of the full contract management lifecycle. This is to be expected, as the primary focus of procurement is to bring a lot of vendors into the environment. For managing large, strategic contracts though these tools are not always the best choices.
· Service Reporting Tools with Contract Management Features
On the opposite end of the spectrum from Procurement tools are those that grew from operational needs such as SLA reporting, forecasting, performance reporting, etc. Where Procurement tools are not as strong, service reporting tools can do much of the commercial management needed in the full contract lifecycle management. But it should not be a surprise that they are not really great document repositories for searching contracts terms or creating clause libraries, nor do they have any workflow on pre-signature contract creation. This isn’t a negative, just a reality.
· Specialty Tools
There are some tools out there that focus on unique aspects of contract lifecycle management. These can be tools for grabbing data automatically across multiple platforms. For example, if you don’t know where your contracts are kept you may need a way to search all of your data and pull it all into one place. There are also tools which are pure analytics engines which do stellar jobs of reporting or dashboarding once the data is found and put in place. Niche tools are part of the contract management lifecycle but just as you can imagine, they do their specialty really well, but are not a preferred solution for end-to-end contract management.
There are a number of tools out there which are pure contract lifecycle management tools built just for that purpose. They don’t specialize in any one piece but usually hit each piece. These are good utility tools and often a good place to start if you don’t know where to start or don’t have an immediate and obvious glaring problem – other than they fact they you know you are losing money in the contract lifecycle.
The key to selecting the right contract lifecycle management tools is to look at the specific requirements of the organization and pick the right tool for the need. No longer is this a one size fits all market. It’s important to understand your needs before making the investment. At Capgemini, we find its best to look at the overall processes and do a gap analysis of the as-is state of the organization and desired outcomes. From there we can give good advice as to which tool is right for their needs.
Note: This is the personal view of the author and does not reflect the views of Capgemini or its affiliates. Check out the original post here.