Involving Stakeholders in the Contract Management Lifecycle

In the immortal words of great thinkers from Sun Tzu to Michael Corleone, you should keep your friends close, and your enemies closer. In other words, as much as you’d like to know what your friends are up to, it’s even more important to keep tabs on your enemies so you can prepare to meet them in battle.

When it comes to the contract management lifecycle, we paraphrase that a little: keep your team close, and your stakeholders closer.

Now, don’t take that the wrong way. We are definitely not saying that your stakeholders are your enemies. (Though failing to sufficiently manage your organization’s contracts would sure be a fast way to make them feel like enemies.)

Let’s look at why keeping your stakeholders closer is key to success across the contract management lifecycle.

Contracts affect everyone in the organization

Contracts are the foundation on which businesses are built.

Across the organization, people are entering contracts to provide and receive goods and services. Everyone in the business needs to know what they’ve agreed to do so they can deliver, what others have promised to do so they can follow up if those promises aren’t met, when obligations are due, and when each contract is up for renewal.

The ubiquity of contracts has two implications:

• The performance of every business unit and division depends on how well it satisfies and enforces contracts, spanning the contracting lifecycle from creation through performance to renewal or termination.
• Contracts are — or should be — a collaborative effort involving every business unit and division.

As the legal team, the more intentionally you manage your organization’s active contracts, the more you can help everyone in the organization meet their obligations and collect what they’re owed.

That means working with everyone from HR and IT to finance and procurement — not to mention your sales teams and each of your business unit leaders — to understand what contracts they’ve entered and where they’re having trouble. It also means monitoring contract performance and managing the flow of information about key dates, non-standard terms and conditions, and performance milestones. When you do, you’ll realize the true power of the contract management lifecycle: the opportunity it represents.

The contract management lifecycle is a key opportunity for legal to act as a strategic business partner

In some organizations, legal has earned an oft-unwarranted reputation as nitpickers and worrywarts when all you are trying to do is help the organization avoid risk. The contract management lifecycle is an unlikely superhero, ready to transform that reputation and position your team as a strategic business partner in at least five ways.

First, when you streamline and simplify the processes your organization uses for reviewing, approving, and executing contracts, you’ll free up time — and reduce stress — for everyone involved in contracting.

Second, faster contracting processes enable your business units to move faster on opportunities and start work sooner, keeping you ahead of the competition.

Third, when you understand the contents of your contracts, you’ll see hazards approaching in time to circumvent them.

Fourth, you’ll have fewer hazards to circumvent as you standardize terms and clauses in your active contracts.

Fifth, you’ll be able to analyze your contracts, mining them for data that you can use to inform strategic business decisions and spot potential growth opportunities.

But you can’t do any of this — improving collaboration and communication, streamlining processes, or providing strategic input — unless you’ve first taken four steps:

• Compiled a full inventory of your organization’s active contracts
• Gained access to the final, executed version of each of those contracts
• Reviewed every contract and cataloged its terms
• Implemented an intuitive, integrated, yet straightforward platform for creating, reviewing, and executing contracts

Don’t panic. Yes, those sound like daunting tasks given that large organizations manage as many as 50,000 active contracts at a time, which tend to be dispersed into silos within each business unit. But contract lifecycle management (CLM) technology makes it possible — or even easy. 

Implementing CLM technology? Start with your stakeholders

When you decide to tackle the contract management lifecycle, start by talking with your stakeholders. Find out how they’re currently managing contracts, what’s working, and what isn’t. What pain points are they experiencing? Where do they most need help?

Keeping your stakeholders close throughout the contract management lifecycle sets you up to succeed quickly by keeping you focused on your stakeholders’ challenges. It also helps you pitch CLM technology as a solution, which makes it more likely that you’ll gain funding and buy-in for a comprehensive CLM platform.

Sign up for a free demo to learn about the LinkSquares Cloud, an integrated all-in-one platform that spans the contract management lifecycle, helping legal teams keep their stakeholders close.