As part of the Legal Ops ACCELERATE webinar series, Wolters Kluwer’s ELM Solutions presented a session called Making the Business Case for a Contract Lifecycle Management Solution. During the webinar, Lee Matthews, New Ventures Strategy Director for ELM Solutions, and Lauryn Haake, President and Founder of Qualitas Consulting Group, covered the essential information needed to demonstrate the value of contract lifecycle management (CLM) to senior leadership and achieve buy-in for a solution.
What to include
A business case can be formal or informal, but it is very common for a business case of some kind to be required in order to invest in a new solution. The exercise of documenting a business case can help to demonstrate a department or team’s preparedness for the new solution, summarize the reasons why the solution is needed, and reveal any areas that still need more thought and planning.
A typical business case includes the following:
- Executive summary – Although it is presented first, this summary should be written last, after other sections are fleshed out.
- Problem statement – This should be a clear, concise statement of solvable problem. Be sure to keep any solutions out of this section.
- Possible solutions – Document all potential solutions to your problem, not only the one you are advocating for.
- Definition of project and charter – The charter formalizes the project and defines the purpose, objectives, and risks.
- Timeline and resources required – This is a critical piece that helps set expectations with your decision makers.
- Budget and financial considerations – Include the investment needed as well as expected ROI.
- Desired outcome and definition of success – It is important to keep everyone aligned on how success will be measured from the start of the project.
Embrace the problem
Lauryn advises clients to “embrace their problem” while preparing a business case. It is helpful to spend time researching and getting to know the details of the issue. Map out current process and ask stakeholders what is currently working well and what could be better. Ask which aspects of the status quo they absolutely need to maintain going forward, and which they cannot live with any longer. Perhaps there are team members who are not currently able to find all contracts when they need to. Or maybe they need a better way to manage risk. Listen with an open mind and think about the key differences between their must-haves and their nice-to-haves.
The knowledge you gain from this research will prepare you to write a specific narrative that describes the problem you are facing and fully evaluate all possible solutions to your problem. Don’t limit yourself by omitting any potential solutions from this process, even those that may seem ridiculous at first glance such as doing nothing. Evaluate the relative costs and benefits of buying vs. building a solution and identify the likely timeline for each, keeping the urgency of your need in mind.
If you decide to proceed with buying a solution (which is a more cost-effective approach for many organizations), your evaluation process should include both industry analyst reports and your own direct experience with solution providers. During those conversations, there are several questions you should be sure you ask all vendors under consideration. A few of the most critical include:
- How does your product support the contract lifecycle?
- How does your product help solve my specific problem?
- Who else have you helped with this problem and what was the outcome?
- How will your product support our growth over time?
Get reassurance that the vendor has seen some version of your problem before. There are likely to be issues specific to your company and circumstances, but an experienced vendor should have a track record of addressing similar problems to the satisfaction of their previous clients. You should also seek information from vendors about their roadmap planning, company health, and funding sources. All of these will speak to a vendor’s availability to you after the sale is made and how well they will be able to support you as your needs evolve.
Beyond what we have covered here, Lauryn and Lee provided insight on several additional topics, including the different types of resistance you might encounter while making your case and how best to respond, the ROI that a CLM tool can deliver at each stage of the contract lifecycle, and the various ways you may choose to define the success of the project. To learn more, watch the Making the Business Case for a Contract Lifecycle Management Solution recording.