Competition is fiercer than ever before. An efficient and effective contract lifecycle management (CLM) system isn’t just a nice-to-have—it’s a crucial differentiator that transforms how your organization handles its most important business relationships. The problem? Finding the right CLM platform can be highly complex and challenging. Make the wrong choice and you risk paying additional costs and suffering implementation delays, only to receive a system that fails to deliver what you need.
With so many CLM vendors making similar promises, how do you know you’re making the right choice for your business? Keep reading to discover the key mistakes many buyers make when comparing CLM solutions and the practical ways to avoid these pitfalls. By approaching your CLM selection strategically, you set the foundation for a successful implementation that maximizes the return on your investment.
1. Focusing Only on Features, Not Business Needs
It’s easy to fall into “feature frenzy.” Fancy demos showcase an impressive array of capabilities, but do all these features truly translate to better results for your business? Don’t fall into the trap of choosing the solution that appears to offer the most functionality. When you prioritize features over actual business needs, you risk investing in a system that’s overbuilt for your requirements. This can lead to unnecessary complexity, higher costs, and functionality that your team will never use. Even worse, the system might excel in areas that aren’t critical to your operations while falling short in the areas that matter most.
The Solution:
Before you begin evaluating tools and vendors, take the time to assess your organization’s current contract management challenges and objectives. Ask the following questions:
- What specific pain points are we trying to address?
- Which contract processes are currently the most inefficient?
- What are our must-have capabilities versus nice-to-have features?
- What measurable outcomes do we expect from our CLM implementation?
By starting with a well-defined understanding of your business needs, you can evaluate CLM solutions based on how well they suit your unique challenges, rather than being swayed by potentially unnecessary functions.
2. Neglecting User Experience and Adoption
No matter the feature-set, your CLM implementation will fail if your team doesn’t use it. Unfortunately, many organizations select a CLM solution without adequately considering the user experience and the likely adoption rates. Technical capabilities are essential, but for a tool to have a measurable impact on business goals, it must also be intuitive and user-friendly. Everyday users need to be able to easily incorporate your CLM platform into their processes. Complex interfaces, confusing workflows, and cumbersome processes can lead to resistance, workarounds, and ultimately, poor adoption. When employees revert to old methods or create shadow processes, the expected benefits of your CLM investment quickly evaporate.
The Solution:
Make user experience a priority in your selection criteria. The best CLM solution balances powerful functionality with ease of use. During the evaluation process:
- Include actual end-users in the selection committee, not just IT and legal stakeholders
- Arrange hands-on testing sessions with potential users across different departments
- Ask vendors for access to trial environments where your team can complete typical tasks
- Evaluate how the system handles common workflows
- Consider customization options that can make the interface more intuitive for your users
Different user groups will interact with the CLM system in various ways. Sales teams may focus on contract creation and approvals, legal needs robust review capabilities, and finance requires reporting functions. Ensure the solution you select addresses the needs of all stakeholder groups. Also consider the user onboarding experience. Ask vendors about their training resources, documentation, and support options.
3. Underestimating Integration Requirements
One of the most costly mistakes you can make when selecting a CLM system is failing to thoroughly assess the real integration requirements for your business. Contracts don’t exist in isolation—they’re connected to numerous business processes across your organization. A CLM solution that can’t integrate with your CRM, ERP, procurement, or document management systems creates data silos, leads to duplicate data entry, and undermines efficiency. Many companies discover integration limits only after they’ve committed to a CLM solution, resulting in extensive customization costs, or worse, a system that they can’t use.
The Solution:
Before selecting a CLM system, map out all the critical integrations required for your contract management processes. Find out which systems currently store contract data. Know your data requirements. Run an assessment to know which integration points are essential versus nice-to-haves. You should also evaluate whether or not you need real-time data synchronization or if periodic updates will suffice. When evaluating vendors, ask these detailed questions about their integration capabilities:
- Does the vendor offer pre-built connectors for your existing systems?
- What APIs and integration options are available?
- Are there any limitations on data volume or synchronization frequency?
- What is the vendor’s track record with similar integration scenarios?
- Will integration require custom development, and if so, who will be responsible?
Ask for references from customers who have integrated the CLM system with the same platforms you use. Speaking with these references can provide valuable insights into the complexity, cost, and timeline of integration projects like yours.
4. Overlooking Scalability and Future Growth
What works for your organization today may not be sufficient for tomorrow. Although it’s essential to understand your current business requirements, remember that these can change. As your organization grows, your contract volume and complexity will likely increase. New business lines may introduce different contract types, regulations may change, and your geographical footprint may expand. A CLM system that struggles to scale with these changes can quickly become a limitation rather than an asset, potentially forcing you to undergo another costly selection and implementation process in just a few years.
The Solution:
Evaluate CLM solutions not just on how well they meet your current needs, but also on their ability to grow and evolve with your organization. Consider:
- How the system handles increasing contract volumes and user counts
- Ability to add new contract types and templates
- Flexibility to adapt workflows as processes mature
- Options for expanding to new departments or business units
- Support for international operations and multiple languages
Also consider the vendor’s own growth trajectory and stability. A provider that’s investing in product development and expanding their customer base is more likely to offer a solution that will meet your needs both now and in the future.
5. Insufficient Vendor Evaluation
Vendor demonstrations are carefully orchestrated to showcase their system’s strengths while glossing over potential limitations. Relying too heavily on these curated presentations can lead to unpleasant surprises during implementation. Organizations often discover too late that their chosen CLM doesn’t perform as expected in real-world scenarios.
The Solution:
Implement a thorough, multi-dimensional vendor evaluation process:
- Request detailed product demonstrations based on your specific use cases and workflows
- Involve a diverse committee of stakeholders in the evaluation process
- Develop a structured scoring framework that aligns with your prioritized requirements
- Ask for proof-of-concept opportunities or sandbox environments to test the system
- Review documentation, training materials, and support resources
Research the vendor’s reputation and track record. Look for independent reviews, case studies, and analyst reports that provide unbiased perspectives on the vendor’s strengths and weaknesses. Consider the vendor’s experience in your specific industry and their understanding of your unique contract management challenges.
Find The Perfect CLM Solution For Your Business
Selecting the right CLM solution is a critical decision that impacts your organization’s contract management capabilities for years to come. By avoiding these common pitfalls during the selection process, you can significantly increase your chances of a successful implementation and positive ROI. Remember to emphasize your specific business needs rather than feature lists, prioritize user experience to drive adoption, and choose a solution that can scale with your growth.
To learn more about selecting the right CLM solution for your organization’s unique needs, contact Koho Consulting today. Our team of contract management experts can guide you through the selection process for a smoother, more successful CLM implementation.
