Seven Challenges of Contract Management Implementation Part 1

Part 1: The Scope of Creep

Too often, the contract management implementation is hampered before it even begins. While it is commonly known that scope creep can endanger project budgets and ultimately sabotage project success once it is underway, fewer recognize that scope creep often begins well before the customer sits down with its chosen vendor – at the Requirements Gathering stage. Putting together the system requirement for prospective contract management providers requires a strict definition of the company’s key business goals for the contract management system, an ability to prioritize those goals and a disciplined adherence to those priorities throughout the implementation process.

In larger organizations with multiple departments, each with its own requirements for a contract management solution, prioritizing business goals is a challenge. A breadth of requirements that simultaneously address the disparate requirements of every department can obscure the system’s core value proposition for the business. It is easy to end up with mammoth proposals from the providers, where the system is overly complicated and the implementation will take a year or more. The entire project will lose momentum as those things irrelevant to the key value propositions of the system take time away from those that matter. Paradoxically, this requirements gathering period is a stage at which companies could benefit tremendously by consulting with a contract management provider. Nonetheless, companies can go a long way toward avoiding scope creep at this beginning stage by developing a manageable, tangible list of key business goals for the system. He recommends reviewing each requirement on the RFP to determine how closely it matches your business goals, and then developing a solid list of “Phase 1‟ requirements – those that most directly impact your business goals and that will begin adding value in the relatively short term. Less critical requirements can be downgraded to a “Phase 2” or an even longer-term “Phase 3” timeline. Ask your prospective contract management software providers to help you set these priorities.

As advocates of this phased approach, we advise starting with the fundamentals. You should be asking, “Do I have a handle on all my dates – when my contracts expire, when they’re up for renewal? Do I know when certain regulatory filings are due? Do I know when I’m over budget, how many contracts I have and what their status is?” Get the system on line so people can start getting real value out of it. Only then should you start filling in the detail, such as data elements related to second-tier provisions. Those Phase 1 fundamentals may differ from company to company, but all successful businesses share a common characteristic: they are always changing. Business rules change; businesses grow; the way contracts are negotiated changes. Your contract management software must be flexible and scalable enough to handle that change. A contract management solution has got to be nimble, with an architecture that makes it easy to enhance it later, on the fly as you’re already in production. Your CM solution should always be evolving within your dynamic business environment.

Keep checking in, Part 2: Confusing Contracts with Contract management coming soon!