Key components for a successful CLM Maturity Assessment

A Contracts Lifecycle Management (CLM) maturity assessment should answer this important question: Is the time right for this initiative? This assessment clarifies your company’s current state of maturity relative to operational dimensions of the Business Transformation model: Strategy, Process, People (Governance), Data, Functionality, and Enabling Technology. Ideally, a third party conducts this assessment to bring objectivity and fresh eyes, based on leading practices to existing processes and systems. The key outcomes of this exercise are senior executive sponsorship, including engagement and alignment from all business functions based on open and honest acknowledgement of improvement opportunities for managing contracts.

The CLM maturity assessment, also called a capabilities assessment, leads to a strong buy-in at the executive level. It sets the entire tone of the initiative and is directly tied to a successful implementation. An executive buy-in conveys the importance of the initiative and greenlights all resources needed for a successful outcome. It communicates the urgency to stakeholders to complete the required input. The commitment from the executive level team to improve processes also requires a significant investment, beyond new software license and implementation services. For instance, additional intrinsic consequences that come with automation and streamlining of processes can affect governance and could result in a reorganization and emphasis on different roles and skills. 

Active engagement across multiple business functions is needed to create a solid foundation for any enterprise CLM initiative. It is pertinent to identify and empower key stakeholders in Sales, Procurement, Finance, Legal and IT to participate in the CLM initiative. Motivated stakeholders that vocalize their appetite and concerns play a major part in the success of the assessment and future implementation. This process usually leads to a shared vision based on unsuspected commonalities for the good of the organization. This new desired future state shared across business functions will help catapult the organization to meet aggressive growth or profit optimization objectives while mitigating risk.

Honest and open communication without blame about the current operational state of contracts management processes and systems is an essential component of the CLM maturity assessment. It is important to be extremely sensitive and anticipate natural resistance to be fully transparent and expose hard truths. A third-party assessor can embolden stakeholders by praising and applauding their candor while sharing findings in aggregate that keeps comments anonymous.

Allocating time for research is a must for the success of the CLM maturity assessment. A third party can help facilitate a handful of one-on-one focused interviews with select team members and executives to better understand concerns, gaps and goals. These interviews provide context for a survey of pointed, relevant questions to a wider audience for determining the extent – in both breadth and depth – of the perceptions captured during the interviews.

A successful CLM maturity assessment will answer if a CLM initiative is the right time to move forward. It sheds light on the stakeholders’ sense of urgency and builds organizational momentum for action among possible conflicting initiatives and priorities. When the time is right, this assessment provides an effective starting-off point. It will serve as critical input in prioritizing business challenges and key functionality to assess during software selection.