In this exciting installment of Contract Heroes, we sat down with Alla Valente, the Senior Research Analyst at Forrester. Throughout our conversation, Alla dissected the common misconceptions surrounding Forrester Wave™ Reports and explained the best ways to use information from the reports to make informed decisions about CLM purchases. She also provided valuable insights that are sure to help folks at any stage of their CLM journey.
Q: What goes into the Forrester Wave™ Reports? How can people leverage them to help make decisions while on the hunt for CLM vendors?
According to Alla, it takes up to 4 to 5 months to complete a Forrester Wave™ Report. The methodology first involves having CLM vendors fill out a detailed questionnaire. This is often accompanied by an executive briefing and a product demo lasting a few hours. Then, they speak to customer references to validate the vendor’s strengths and help them understand how the products are being used. And lastly, they allow vendors to fact check their findings and provide any evidence they may have missed.
Alla stated that one of the most common misconceptions about their reports is the notion that the upper rightmost vendor on the graphic will always be the best in market solution for every company. This is not necessarily the case. You have to pay attention to your organization’s unique needs when selecting a CLM vendor.
It’s also important to note that they can only assess a certain number of CLM vendors. Alla explained that they restrict the sample pool because evaluating an excessive amount of vendors would make it difficult to dive into the data as deeply as they currently do.
Q: Can you elaborate on the evolving role of CLM in the digitization of commercial relationships?
“We know today that every company is a digital company because if they don’t move that way, they’re going to die,” Alla stated. She went on to explain how we saw that happen at the beginning of the pandemic. If businesses don’t move toward digitalization, they set themselves up for unnecessary disruptions when such unforeseen factors occur.
Alla also stressed that you have to digitize more than just the customer experience. You must digitize the experiences and processes on the inside as well: “In the world of CLM, contract professionals understand that in order to have the organization move as fast as its strategy dictates, they need to accelerate the transformation by digitizing contract management.”
Q: What were the specific factors that contributed to the recognition of leaders on the Forrester Wave™ Report? What sets them apart from other vendors?
Forrester evaluated 26 different criteria for every vendor. Examples of such criteria include how the vendor digitizes contracts, what their contract authoring process looked like, their integration capabilities with other technologies, partner strategies, and implementation roadmaps.
As far as factors that set certain vendors apart, Alla pointed to the following areas:
- Leveraging AI meaningfully.
- Ease of customization.
- Integration with technologies both upstream and downstream.
- Visualization of data, metrics, and KPIs.
Q: Have you noticed less of a gap between CLM vendors when it comes to incorporating AI technology?
Alla stated that, although many companies go into their CLM search specifically looking for AI, many of them do not actually end up using those AI capabilities. This is partially because a lot of vendors still feature AI as an add-on. Charging extra for AI services slows down the mass adoption of AI. Alla would love to see aspects of AI embedded in the baseline products of some vendors to give users a taste of what AI is and what it can do, especially since some people may still be nervous about using it.
She added that AI can easily be used for basic tasks like extracting or searching for information in contracts. However, we should strive to have AI support how we work instead of just presenting information for us. Try using AI to build workflows, help write better clauses, or find the most appropriate template. That’s when AI really starts to add exponential value to the CLM process.
Q: Can you highlight some of the most important considerations when choosing a CLM provider?
Alla emphasized that every organization will have its own set of unique considerations. Some are more or less important depending on industry, sector, region, and how you do contracts in general. However, she did give us a list of important features to think about to help you get started on your CLM journey:
- Building and customizing workflows. Find a tool that is tailored to how you work based on your industry or sector and has enough flexibility to make alterations that mirror bigger changes happening in the business.
- Visualization. Dashboards and reports help you tell a story around the data and advance it to the right places for improvements to be made in regard to both contracts and how the organization does business as a whole.
- Product security and insurance. Every technology has some sort of vulnerability. Think about how the vendor secures and protects your confidential information.
Make sure to check out The Forrester Wave™: Contract Lifecycle Management, Q2 2023 Report to see for yourself how each of the vendors analyzed by Alla and her team measured up in today’s ever-changing CLM market. And don’t forget to subscribe to the Contract Heroes Podcast to keep up with the latest developments in all things legal tech!