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Contract Lifecycle Management—A True Horizontal Activity

Blog: Capgemini CTO Blog

Contract Lifecycle Management is not legal process outsourcing or procurement, and it’s much more than vendor management. The gains are broader, the change management is deeper and the market for it is much wider.

I thought I’d take a moment to answer a few questions that often come up when I speak at events, client meetings or trade associations. Consider this my FAQ. Here are some examples of how they come to me:

The short answers are:

Underlying most of these questions are suppositions about where “contracts” sit in an organization and who needs services to help them create, maintain and optimize the contracting process end to end.

Very few, if any, organization’s have a Chief Contracting Officer or CCO, so what happens is that Legal owns part of the contract creation and perhaps regulatory compliance, but procurement owns the business case around supplier selection. Supply chain owns the vendor management, with the CIO organization owning the strategic suppliers, but with the COO or CFO owning the budget around this. But if it’s a sell-side contract, Sales wants to own it, and so on and so on.

This classic silo approach can lead to all sorts of inefficiencies (which I often write about) such as:

This is a bit like doing pushups with just your right arm. Sure, you’ll have a fantastically muscular right arm, but the rest of your upper body will still be weak, which means the value in the exercise is not completely gained.

So, yes, your ERP, SRM or B2B procurement tool has a “contract management module,” but as the main purpose of those tools isn’t realized, it’s a bit like the flashlight on your smartphone. It’s fine for giving a bit of light, but it makes a really bad lamp for your living room.

Or even worse—don’t get me started on non-disclosure agreements (NDA). If anyone has had a real litigation on an NDA, please email me and I’ll blog about it. NDAs are essentially vampire insurance—protection against something that will never happen, and if it did, will a piece of paper really protect you?

The long story short is: CLM is not legal process outsourcing (LPO), it’s not procurement and it’s more than vendor management. All of these skills and many of the activities fall into CLM. But CLM works across an organization. The gains to an organization are broader, the change management is deeper and the market for it is much wider. Indeed, what are business functions without written contracts?

Adam Smith saw this a long time ago, so let’s get with the program.

To learn more about how Capgemini can help you choose the right contract management tools for your business and diet through the buzzwords and hype in 2018, contact:

 Click here to learn more about how Capgemini’s Contract Compliance & Optimization (CCO) solution provides a broader and deeper solution to your compliance, cost reduction and spend protection goals, from an often-overlooked area – the written contract.

 About the author

Craig Conte helps organizations make the most of their contracting process by transforming the processes, technology and people performing these tasks across multiple towers. A lawyer by training, but a business process expert at heart, Craig and his team focus on business outcomes when it comes to legal, commercial and contracting activities.  Craig is on the board of Directors of the International Association of Contract and Commercial Management.

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