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Maximizing The ROI On Your CLM++ Journey: The What And The How
This article was originally published on Forbes.com on Aug 06, 2020.
In my previous article for the Forbes Technology Council, I wrote about the journey from CLM (contract lifecycle management) to the more advanced CLM++ as a critical ingredient for enterprise transformation. For years, technology lagged in this space. Now, as leading-edge technology leapfrogs this deficit, it is important to focus on how to maximize the ROI from this new technology, in a corporate environment.
New technologies, and the change that comes with them, can be intimidating and even threatening to the users that need to undertake this journey. Too often we see technology initiatives fail because the human component is mostly ignored. It is assumed that the employees affected by this change will somehow adapt. Without a carefully planned change management program imbedded in a technology initiative, chances are the ROI on the technology will be abysmal.
As we rethink the implementation approach to go beyond adoption to adaptation, the first order of business is to objectively assess the organization’s propensity for change and to plan and prioritize the change accordingly to ensure the maximum ROI in the shortest possible time. This is the “what.”
Simultaneously, we need to consider the “how.” By this I mean we need to consider how to bring the organization along as we transition to the new technology.
Let’s examine each of these two best practices in more detail.
The What: Elephants And Mice
In my previous article, I mentioned we cannot hunt the mice while the elephants run wild. Organizations can seldom absorb a large amount of change at the same time, and it is therefore important to phase the project in such a way to maximize ROI in the short term.
The initial focus should be on the small number of contracts that correspond to the majority of spend, or those that represent critical services to the organization (elephants) before focusing on much smaller contracts (mice). In short, it’s crucial to transform one piece at a time rather than try to do everything at the same time, or as my former boss used to say, “don’t do vast projects with half-vast planning.”
Distributing the team’s focus to cover more, smaller contracts not only diminishes ROI, it also affects the depth and long-term effectiveness of the implementation. Addressing too many contracts at once results in the project catering to the lowest common denominator (mice) monopolizing the effort, despite their lower value.
Moving to an “elephants-first” approach requires a deliberate mindset shift. The leadership team has to determine first the capacity for change, and second, the propensity for adapting and adopting the new way of doing things along the way. Once they have made the decision on the scope of the initial implementation, they can move onto the how.
The How: Deliberate And Measured Adaptation
It is critical for organizations to recognize that any technology implementation is a change activity and that the effectiveness of the implementation depends on the level of adaptation by the user community. ROI will improve when supported with the necessary change management framework, methodology and measurements.
Any significant technology implementation requires people to take ownership of the new way of working. They need to go from awareness, to understanding, to acceptance, to buy-in and ultimately to owning the new solution.
As a result, investments in adaptation must be made before, during and after implementation. More importantly, progress in this regard needs to be measured throughout implementation. Simply waiting until the implementation is complete and then measuring usage of the new tool is too little, too late. At that point it is very difficult to change the mindset of the impacted user community; the technology benefit will have been compromised, and the desired ROI will not be achieved.
A good change-management methodology contains four components: navigation, leadership, ownership and enablement. These are adapted to the propensity for change (landscape) of the organization with a strong underpinning of communications and measurement throughout and after the implementation.
What does measurement of adaptation mean? The most successful measurement in my experience is one that measures the progress of individuals and groups of individuals on the continuum from awareness to ownership of the solution as depicted in Figure 1 below.
The Human Change And Adaptation Journey
It is necessary to measure the level of adaptation throughout the implementation process, starting with a baseline capture at the announcement of the project. I recommend measuring again right after training, and then again about 60 days post-implementation. This will provide visibility into the level of organizational adaptation as well as how it trends over the course of the implementation.
Adaptation measurement is not the same as looking at whether people are skillful at using the tool. That is also important, but it can only take place after implementation and does not reflect mindset change in a timely manner during the implementation. Objectively measuring identifies critical opportunities for course correction during implementation.
These are just two of the many best practices my company has adopted over the years in projects designed to stop value leakage and increase efficiency in managing enterprise contracts with suppliers and customers. In future articles, I will share additional best practices that you can put into use to improve the next stage of your digital journey.
If you have questions about how your organization can maximize the ROI on its CLM++ journey, please reach out to me at [email protected].
If you found this article interesting, you should also check out SirionLabs’ latest whitepaper with Spend Matters titled Combining Organizational and Digital Maturity to Achieve Commercial Excellence. This paper provides a framework for organizations to assess their current contract management maturity level and describes the capabilities needed to move up the CLM maturity curve.
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