LIVE: Integrating CLM Into Your Tech-Stack - Roderick Wade

Made with speech-to-text software, so a few words may be off.

0:00You're listening to the Contract Heroes Podcast, your one-stop shop for all things contract management. And now, here are your hosts, Marc and Pepe. Hello, everyone, and welcome back to another episode of Contract Heroes. Today on the show, joining us from Med Impact, the vice president of contract management and procurement, Rod Wade. Rod is a returning guest, and this episode also takes place live at the World CC event in Phoenix. So without further ado, let's get into the episode. Well, Rod, thanks for joining us again. I know it's, it's, uh, been about a year, right? Since the last- That's right... time we were having this conversation. Uh, I think a lot has changed since that last call, but, um, you know, I think what we wanted to, to kinda kick things off and, and talk about was, you know, how have things maybe either gone back to normal or, or have things not gone back to normal since the pandemic when it comes to either contract management or supply chain?

1:00Um, w- what does that kinda look like right now for you? Yeah. Well, thank you, Marc, and thank you, Pepe. I, it's, it's continuing, a continuing dynamic, right? So I think one of the big things since we last talked was, uh, starting to implement this kind of back to work approach, and how are we going to do that? And the desire to be flexible with our workforce in order to really hear what would work for them and what wouldn't, right? So, um, I'll use my experience as an example. So fortunately, my boss, our CFO, gave his leads the opportunity to really manage that themselves for their teams. So with my four teams, I have a sales side contract, a buy side and pharmacy contract, procurement and vendor relations, right? So with those, I really posed it to those leaders of those teams, what will work for your team? Talk to your teams, see what works. And so we've got a multiple approach, right? So, um, my, my, uh, buy side team, um, contracts and pharmacy contracts, they come in on a Tuesday to the office. We all live locally with the exception of one person in the San Diego area.

2:01Then my procurement and vendor relations team, they wanted to come in and work together with our AP group. They're very close to, you know, processing purchase orders and purchase recs. So they chose Wednesday. And then my sales side cli- client contract team, they decided we don't wanna come back. We're good enough being remote, and- Right... we prefer to keep it that way. So we implemented this, you know, different multifaceted approach to return to office, and it seems to work. So we're pretty pleased with that since we last spoke, that we haven't had much turnover. I did lose one person, a, a key person in my client side team, but they really left for something we're also seeing, which is a, a greater opportunity in terms of compensation with maybe a little less work than what they might be doing with us. There's a lot of competition for good- Yeah... uh, skill set out there today, so we're seeing that as well in the last year, really accelerating retention. And then because of that, this method of making people feel as though the way they wanna work is being heard and responded to, so critical to help keep those teams together. Right.

3:01And I remember a lot, uh, from our previous conversation, like how we're, is your team leveraging technology, right? It's becoming more digital. Now you're trying to get rid of all of the paper. I, I really love how, like, how, how you connect all the different systems, and then when you have, like, like the contracts in the middle, right? Because if you're, like, in procurement, you have, like, um, uh, ERPs, and then you have the CRMs on the, on the sales side. And this is like an ongoing improvement because may- I mean, maybe at the phase one, you know, like, you need some automations there, some digitis- digitization. But now that it's not over the pandemic, but what are, like, that some of the things that have been still improving and, uh, and, and, and what's your team working on? Yeah. It's, it's great because that's exactly right, Pepe, right? So we start at the, let's stay on the sales side CRM. So our CRM tool containing the data that's needed to do those sales side contracts. Our clients are set up in there. They come to us. We gotta make sure that data is consistent. We wanna pull that data straight into the contract tool to manage that.

4:04Now, we're still working on that piece because we haven't really fully leveraged our CLM tool, but we do have a fully leveraged CRM. So we've got the data there that we need. On the other side, where I've got my procurement side, we implemented during the pandemic the ERP system, right? So we have an ERP there. Now, that piece, relying on the contracts, we don't do the contracts until that that, that purchase has been approved. But once it is, we're really doing that in conjunction with our procurement group and the ERP system. So not really leveraging the CLM. The CLM has become more of a repository for us right now. So we're keeping some of that. And we're really leveraging it with our pharmacy contracts, right? 'Cause they don't kind of fit in either buy side or sell side. Yeah. That's the network we offer. But the key is the data, because a lot of what we work on and focusing on is the, the accuracy and the timeliness of the data in our CRM. 'Cause not only is it feeding our contracting on the sales side, it's feeding our ERP for billing our clients. So we have billing codes built into the CRM that need to translate to the ERP.

5:07So I might not be part of that, but I gotta make sure that my co- contract is consistent with those billing codes that feed the ERP. Otherwise, we get these discrepancies and issues of billing our clients. On the other side with procurement, same thing with suppliers, right? If that input is solely into ERP, that's great, and we've got it all there, and we're, we're managing that off of purchase recs and purchase orders. But what do the contracts with the suppliers say, and how is that captured? That's our next step in digitization, is making sure that we've got those contract terms aligned on the sales side to our CR- CRM, um, billing codes, and our contracts on the buy side are aligned to our ERP data points. And that part is going to be more of the, the trend that we work on over this next year, is aligning those digitally. I've gotta decide whether my CLM that I've got today is gonna really do that. And it, one of my challenges, Pepe, honestly, and Marc, is that- My client side, my contracting team kind of visualizes that CRM to, to contract to ERP differently than my procurement lead who wants to stay away from the CRM- ...

6:12and just work between the contract and the ERP system. So we gotta figure that out, but it's, uh, it's a good problem to have. But you're right, we are not doing anything on hard paper anymore. It's all digital documents, right? And, uh, so that's fantastic. And like I shared with you before, putting in a, a- an electronic signature back in late '18, early '19, thank goodness, 'cause I don't know where we would be if we were trying to sign things, you know, hard signatures through the pandemic. Would've been chaos. Right. And also they're, they're repository, right? So, so that's like the first basic thing that you, that you gotta do. But now that you're handling different systems. So the main thing when, when you're using like enterprise software, it's like you have like silo systems. Because it... You, you, you have to double work, right? And put the information in one and then the o- in the other one. There's a lot of human errors there. And what you wanna do is, like, everything flows, like, fluently, right?

7:09The information from the CRM then goes to the ERP, and also the information that you're going to be drafting on your contract. Like, can you give us like some ex- some examples of what kind of data, like, do you think you will be imported for procurement? Or what kind of data, like, the financial, uh, department will, would like to see that- Yeah... that it, it's there on the contract. Yeah. And I think this is exactly it, right? Is so you, you hit the nail on the head. Who is... If you're gonna make that CRM your source of truth, who is responsible for inputting that data into that CRM, right? Is every single salesperson gonna be creating their own opportunity or context with that? Is every single account executive for an existing client putting it in there? That's a big challenge. We really need to streamline that data entry point, to your point, Epe, so that we've got consistent approach to getting that data in there, and having it then be able to be QC'd and accurate. And then have that feed to our CLM into our ERP systems, right? That's critical, because if you do that, you're gonna have to touch other things.

8:12You're gonna have people taking stuff out to do the contract, and you're gonna have to take- people taking stuff out to import into your ERP. So we're focusing on that, that data importing to not touch it with human hands, right? Just take it from this entry point into CLM, into ERP. My controller likes that, right? Because then he can go back and say, "Well, I don't have to go through three different areas to find out where the error occurred if one did. I go straight back to that source of truth, and how is that coded and input and why... Yeah, it's, it's wrong there. It's wrong in the contract. It's wrong in ERP because it was wrong at the beginning," versus, "It was right in the beginning, it got translated wrong in the contract, got translated wrong in the ERP." All the permutations, something's wrong. I think he would've had a hand in putting me in the role where if anything goes wrong, we create a financial adjustment request. I have to review every single one for the organization. Yeah. And I'm looking at things from $10 to $2 million. And I, it's like, well, I've got a vested interest in making sure we get our hands off these systems and, uh, just let the data be clean.

9:15But my request is that we control that input at the front end, right? And not have a lot of people putting a lot of stuff, garbage in, garbage out. I wanna really control that. So I've got a vested interest in making sure that happens so that I reduce how many things I've gotta look at as to why did that go wrong. Yeah. And you're right. Keep as many hands off as you can. Right. And I, I think that's why it's so important that these, these different parts of the organization stay using the tools that they're used to using and, and don't have to be in different systems. And in that way, I mean, I, I think best practice is somebody in each one of these departments, wherever the information is starting, that needs to, there needs to be somebody in each of those departments that's reviewing that information before it gets pushed to the other systems. A- and obviously when, you know, you're, you're looking at these tools, whether it's really any type of application, you need to make sure that they can integrate with other things in your ecosystem. Um, because if not, sometimes you're back at square one a- and you have to reevaluate, you know, whether it be a CLM, an ERP, or, or, uh, a CRM.

10:11You know, you could have issues with any of those down the road if you don't, you know, look into the future, which is something that we always talk about. I think the beauty of that, Marc, is that I'm in a good position because our CRM and our ERP are, are, you know, key... These are known names, right? Right. So they, they are solid systems. So with all of the people we're seeing here at the conference, all of the vendors in the CLM space, they all do a great job of integrating with those systems, right? So, so I have that kind of the pick of the choice, right? Of, of what will work best for us. It's really defining what our need will be on the CLM side. Right. And then I think integration and scalability are the two keys. Um, so you're right. We've got a great relationship. Just last week, my, uh, my lead for our client contract team, myself, and the lead for our CRM, um, programming and implementation, worked together on the phone with our consultant we use for that CRM to talk about these codes I was talking about. How we're making sure we're mapping correctly, and that we've got a correlation of one to one from the contract term sheet to the billing codes so that we've got them there.

11:14And I really want to ultimately end up where you compartmentalize these into bits of data that basically link straight up, because then you can get to a smart contract- Yep... where it, it immediately feeds from your CRM to each component of that term sheet, fills it in. That's the part where nobody's filling it in by keying it in. It's being implemented from the digital set that comes out of the CRM. That's the goal. That's- That's the vision we wanna get to. Yeah. And, and I think there's a lot of organizations out there that are, are either trying to do that or are doing that. And I, I think that finally the CLM tools are at a place where you can do that. Um, you know, the, the technology has evolved and it's maturing and, and the integrations are, are working a lot better than they did three or four years ago. Um, so yeah, I mean, you know, like you said, there's, there's a ton of great solutions here that, that definitely could handle that. Yeah. And there's, and, and, and also it's not just because you wanna have, like, the control of the data, but also when you think about it in the commercial way, right?

12:07You don't want to have legal all the time n- n- negotiating every kind of contract. And that's like, like a trend. When you can have people in procurement, people in sales, that they can have like some kind of playbooks, and they have all the data there- Right? What can happen, I mean, of course, if, if, if it's a couple million dollars, of course, you wanna have a second eyes to look at the agreement and, and, and, and i- see if there's no legal risk there. But you want them to have all the tools so they can negotiate the terms. They can focus on the commercial terms, right? And then, uh, try to use that information and improve the processes. And the other way, just to have in a system there, because if you keep things doing manually, I mean, it's just like checking paper again, right? No, you're right. I... You know, the vision I have is, you know, in our, in our sell side contracts, our customer have- customers have, like, three to four main points of, uh, cost and revenue associated with it, and then we have 60 plus add-on programs, right? I don't want my sales team bogged down with those others. I want them focused on those- Right... top four. They work with an underwriter, they submit it electronically, right?

13:13But in my mind, the vision is yes, you have your laptop, you have your tablet, and you're sitting there with a prospective client or existing client, and you can say, "Yeah, if I've got all that data set, I punch it in, I can, I can email you an, a, a soft copy contract like that," right? Because the system translates it all through. Yeah, you'd have to have some gateways, and you have to note that, "Hey, this is not final until we sign." But the, the re- the, the vision of that approach, if you can put it into the hands of your salespeople, you can put it into the hands of your account teams that are managing an existing client base, and you can put it into your internal business owners who are owning the relationship with suppliers on the buy side, where they can sit down and put these things in and model them as they're going and negotiate by what they see, "Okay, if we change this, what impacts that on the, on the overall revenue or the cost on the buy side?" That's so powerful because you can speed up those times to sale, uh, to implementation of the supplier, and to revenue realization. I mean, that's what we're all about, right?

14:10Is getting that thing into place as quick as we can. And so those are all the real key pieces. I agree, Marc. Technology is there, and then I have to get the, the, the right people- Mm-hmm... in line to review that and consider it. And, uh, I, I also agree. The CLM providers have come a long way. And yeah, I'm, I don't think we've, any of us are really in that kind of looking for one size fits all anymore because we've got these other systems that we've built up, right? Uh, we're looking at what, for our business, what do we really need? What, where are we? And, uh, the great news is there's a lot of solutions out there that can address whatever your needs are as, as a potential CLM buyer. Yeah, right. There's, there's a lot of things that you gotta check out with the different providers. You, if... I mean, what, what I, what I really like about what we're talking about is, like, you have very clear, clear, clear what you need. Yeah. And that's, and that's the main thing because a lot of the companies make the mistake that they just jump directly to technology.

15:08But if you don't have all those processes, you don't know what kind of data do you wanna, uh, uh, you know, like, move between all the different, uh, systems. It's, it's not gonna work because at the end, I mean, the, the, the only person that knows what, what it's gonna be in the benefit of the company, the people inside the, the company. Implementers, they know how the software works, but you gotta tell them what to do with that kind of data, right? So I think, uh, that's, that's, that's very impressive, and I, and it's, and it's really cool that, that, that, that you have all that information. And what about, like, you said one, one, one good thing about, like, you, you can, uh, calculate, like, the costs for procurement, but any other, like, KPIs do you think that will be, like, interesting, uh, by using these systems? Yeah. So we, we do on, in our business, we have a portfolio of KPIs that have everything to do...

15:58'Cause we have contact centers, so we've got your typical, uh, speed of answer, um, abandonment rates, those types of things. We process claims, so we have claims processing time and its accuracy. We've got this, this 30 plus KPIs that we do, and most of them we put money behind, so they become performance guarantees, right? So we have that list, and we've got those very well documented, and we've got those systematized as well. Um, the, the, the one thing I wanted to share with you about that, that concept of CLM, because it follows from this is, you know, what do I and my specific business need? There's a lot of talk in the CLM space about AI, artificial intelligence, right? And that's great. I think I've come to a place, you asked about through the pandemic, of where that evolution of digitization has taken me, and I've said, "You know, I've got great, well-experienced contract managers take care of that kind of negotiation of the red lines back and forth, right? So do I really need a CLM that's managing that piece?

16:53What I really need is that data piece at the end that says, 'Here's the contract portfolio you have, that you've put in place, that you've negotiated,' especially on the client side, the sell side. Extensive negotiations. And then that tool takes those contracts and it tells me, 'Here are all the...'" You know, and I tell it what the risk parameters are. "Tell me what my indemnification, limitation, term and termination is, what kind of most negotiated terms are. Tell me what they look like." And then I map that up against, okay, what is our customer experience? So where we have good customer experience and we've got this set of, uh, of terms and conditions that we negotiated, let's start to move those terms and conditions back to the beginning to become now our template- Yep... terms and conditions, right? And so it tells me, based on your risk profile, these are good terms. You negotiate these pretty consistently among all your team. Here they are. And now I can start off with a contract at the outset that's adopted some of that, that the system has told me are good terms, manage risk, and I get to shorten that cycle time because now my customers will get through the red line of negotiation much quicker because we're starting from a better place.

17:58The key there is convincing my counsel, general counsel and associate general counsel, to sign off on what the system tells me are the, the proper ones. I will be in much better place when I'm doing that instead of anecdotally from what we experience, when the system can tell me, "Here's what it is," and they're the ones who are telling me, "Here's where we've had disputes or issues." And we bump them up, and I say, "Okay, well, we have good relationships. These terms are the ones we should lead with now. Let's make that change." Attorneys who I love dearly, and I'm not one, but attorneys who I love dearly like to say to me, they'll say to me, my GC will say, "Bob, I always wanna start out with our standard clause," because some people will just take... That's great, but I can go and say 95% of people are not just taking a standard indemnification or limitation clause. You know, we need to think about adopting better clause. Our, our, our experience has shown us works just fine, and we've cut down those, those negotiation lines. So I'm looking at that, that ability for AI to drive information to me, and then also in reporting.

19:03So one thing we learned in the pandemic, and s- uh, um, Salim was just saying it in the, in the, uh, in the opening address, is everybody wanted to know what the force majeure said, you know, between March and May of 2020, right? And then they just said, "Forget it. It's not helping us anyway." Um, but yeah, when people need data out of there, I want that system to be able to quickly produce it, and be able to give anybody who asks, "Here's what we say about pricing terms," and some of those things that are important to the finance side of the house, um, to the operational people who need the KPIs, uh, to my technology people who are managing risk for my security, and what the, what the, what our clients are accessing in our systems. So all of that comes out of that reporting. So I'm looking forward to that. Yeah. And, and I think, I mean, AI means so many different things to so many different people, right? And, and when you ask a prospective customer what, what they want AI to do, uh, you know, 50% of the time they don't know, they just want AI.

19:56But, but other times, um, you know, they, they are, are looking to extract information from their legacy contracts, which I think is great, and I think that there are some tools out there that do a great job at that. But I do think that some of the other parts of those applications are still lacking. Um, but, but as far as, you know, your use case, I think it's a fantastic one, and I think a lot of the, the CLM tools that are leaders in the market are actually doing a pretty good job at, at being able to pull that information out of the contract and, and give you that information so that you can manage risk, and you can go to the legal team with hard data to show them that, "Hey, we're gonna be able to get these contracts done a lot faster if we just make our terms a little more agreeable to the other party." Because, like you said, what, 5% of people maybe, you know, aren't gonna redline some specific clauses, but everybody else is. And, and I think once they can actually see that hard data, then they might actually listen and, and wanna move forward with, with the changes that need to be made. I'm with you, Marc. That's, that's exactly right. And it also works on the buy side with your key suppliers, right?

20:52So I'm not looking to negotiate with kind of the, the, uh, software license guys or the big guys out there who kind of take it or leave it, as long as we've got a reasonable price negotiated. But key suppliers, where we downstream some of our services, they're gonna be held to terms of vision, audit rights, separate from the client side. I'm gonna need some of those things there. But again, show me what my risk is, and then I can adapt to it. And I would tell you, you, you both know this because, you know, I, I engage a lot through World CC and, uh, the work that Paul Branch has done on the technology side, to attend the webinars, to listen to what each of the, uh, CLM providers provide. And you're right, Marc, I love what I'm seeing in terms of their focus and adaptability to what they're hearing from both their customers and potential customers as to what these systems can do and what they're looking for. So yeah, I keep that running tally because my procurement person says, "When you're ready to come to me to CLM, that's great, Rod. Don't bring me 25, don't bring me 15, don't bring me 10. You know, bring me the top seven to eight and we can break that down." They're all here. Yeah. They're all here, and they are within that group because they get it, and they are really adapting to what their customers need. I- So it's, it's very possible, you know, developing the CLM space. And, uh, so I, I have plenty of choices.

22:04I just gotta get to that point where I'm ready to move into that piece. Let's get that CRM set up right so it's doing everything. The ERP's where it needs to be. Get that CRM piece done, we're going to really be ready to kind of link them together appropriately. And I don't know that my current CLM is going to be the one that does that. I... They will certainly be brought to the table as the incumbent to be part of that sourcing exercise. Maybe they will, maybe they'll surprise me. But, um, in the meantime, you know, I know that there are people out here that can get me what I need, so I'm looking forward to that. Right. And, and there's also a lot of importance with the consulting firm that you're working with, because, I mean, technology's there, but the thing is, like, understanding what you need, right? Those pain points, how, how can you bring the other stakeholders to the table and see, like, what kind of information does procurement need same their size, what the other information from the sale side wants. And also trying to be, uh, looking forward on, on the long term, because this is, like, kind of a, a, a marriage, right?

23:05Just like, the wedding is just like the go live, but then keep, can, just keep improving and improving. And, and, and maybe, like, I think this case that you brought about, uh, how to use AI in order to improve your templates so you can reduce the time of negotiation, that's incredible because, you know, like, that's the, that, the North Star. But to get there, one good way is, like, divide it in phases, right? You have maybe phase one is the repository. Okay, we got phase two. We, we want to have, like, like, the, uh, approval workflows. Ne- next three, phase three, I, I, I, I, I mean, yeah, it's going to integrate with the other software. So when, when you have all that in place, and then you can have all that information, then you can know when to start using the artificial intelligence in order to improve the, and simplify all your contract negotiations. I wanna hit on one thing you said, Pepe, which is that support, right? That, that consultancy that helps you- Definitely... get through these pieces, right? So one of the keys to me is that we didn't do that way.

24:07We've been our CRM for a long time. We didn't do that back when we were getting started. We had to work through that in German ourselves. Once the ERP, we brought in a consultant who worked with that tool and could help us work through. That's a great point. I would not, I would not venture forth into that CLM integration, integrating with these, implementing what I need, integrating with these tools, without having somebody there to help, help us I just think it's, it's such a good investment to have that kind of expertise with you who have worked with these, uh, these CLM tools before with the providers, and really map out what you need. So you bring them in before you go out to that sourcing exercise to help you with, uh, putting together that RFI, right? You know, or that RFX, to go out to the market. So bring them in, say, "I need you now to help me get there.

24:56And then when I get it, you know, I need you to be there to help me with the implementation," 'cause you're bringing together internal, uh, constituents from all across your organization on the, on the integration side. Uh, so no, you can't do it alone. I, I think it's a mistake sometimes to try to do it alone. Um, and, and I've, I've already in my mind said I need that, that resource 'cause I watched it on the ERP side. I said it was great having this third party in there who does this to help support our organization. And I know my procurement lead, 'cause she's just like one component of the ERP, right, the IP products. That was, uh... Yeah, I don't, I... She would not have been happy if I didn't have that support, right? So because she's already feeling like she's secondary to AR, AP, and accounting modules, right? That the controller's running and that we're kind of separate from... We're part of finance, but our piece is a piece add-on. So you're kinda like the stepchild in that.

25:51Um, it was important to have that consultant who kept it all together. And, uh, so yeah, very important part of what people should be looking for when they go into this is who else can I rely on for support? Can I bring someone in to help support me? Because I can't do it all myself, and I can't know everything I need to ask to, uh, get it up right. And you got work to do inside the company, right? This- Yeah, yeah. They got your day job, right? Yeah. That doesn't stop. That, that- That always is there. All right, Rod, so this has been great. I really appreciate it. Thank you. The second time we, we, we, we, we met in person. We, we know each other since a couple of years, so this has been great to have, uh, to be here in the World Commerce & Contract in Americas, and hope to hear fro- from you soon. Thank you both very much. Yeah. Thanks much. Appreciate it.