In Part One of this two-part series, we explored the logistical complexity of deploying contract lifecycle management (CLM) worldwide. In Part Two, we lay out the requirements that a CLM solution will need to meet to be successful on the world stage.
A new incoming administration, Brexit, global power shifts…. The world is changing—are your contracts ready?
However the year shakes out, it will be critical to ensure that your contracts – and the relationships within them – reflect current (and shifting) commercial realities. From new or rescinded regulations to foreign currency fluctuations and new data protection rules, how you handle change depends on your flexibility in managing those contracts. In this regard, it is important to have some guidelines in understanding what a global CLM solution should provide.
To be successful, a global CLM solution should be feature-rich in the geographical regions where it’s deployed. This means a solution that enables contract optimization, contract compliance, and effective risk management across multiple languages, multiple countries, and multiple regulatory and business environments.
Additionally, a global solution should allow any authorized user throughout the enterprise to have a full view of repository data (and metadata) in any language, at any time, and from any location — without the need for any source code modifications. At the same time, the solution should be flexible enough to adjust to who needs to see data when, whether it’s based on security or the need to accommodate privacy / access laws related to legal jurisdictions.
1. A global CLM solution should handle global contract management challenges, including:
- Full support for legacy globalization, IT infrastructures, and replication solutions
- Global visibility and reporting across all contract metadata in all languages and currencies
- Controls for business practices, regulatory compliance and maverick spending
- Presentation of repository metadata in any language
- Language-specific end-user interfaces
- Full support for all currencies and time/date formats
- Fast and easy configuration of fields
- Seamless replication of data across multiple application instances and multiple databases
- Easily manage and adjust subsidiary, business unit and departmental-level administration
2. A global CLM solution should ensure that corporate standards are upheld.
In a global company, customer and supplier relationships often transcend borders, boundaries, and languages — and so do business practices and controls. In a number of areas, corporate standards can be more easily upheld in the contract process, including:
- Contract Authoring. Automated contract management on a global level should ensure that required fields are included in all contracts, regardless of where they are authored, while also giving authors the flexibility to adapt terms and conditions to local needs. At the same time, the solution should ensure that locally authored contracts reflect terms and conditions that exist in master contracts.
- Currency Reports. Rolling up data from multiple local sites, in multiple currencies, into consolidated, single-currency reports is an absolute requirement for any company working to minimize contract risks, ensure enterprise-wide compliance with internal controls and external regulations, and optimize management of global revenue and spend. Global organizations looking for automated contract management need a solution that can do this without introducing needless margin for error.
- Database Replication. To ensure that timely and accurate information can flow bidirectionally across all data centers in the global enterprise, an efficient global CLM solution should support standardized database replication solutions. This strategy is key to enabling disparate local contract practices to meet a unified global vision while adhering to local data requirements.
- “Tight/Loose” Controls. In global environments, “tight/loose” controls are essential, meaning that local offices need to adhere strictly to corporate mandates, while also respecting regional prerogatives. Employment contracts for all regional executives, for example, may include performance bonuses, but the levels might vary with local employment laws. A global CLM solution will be able to handle the complexity of these conditional variations from one system.
3. A global CLM solution should meet performance expectations.
CLM that is intended to handle global contract complexity ideally meets a number of performance expectations:
- Facilitating Tech Communication. The most efficient contract management systems eliminate keystroke latency and confusion on document authoring. This is done by relying on check-in/check-out architecture that enables end-users to easily create a lifecycle for attachments (documents), and allows check-in and check-out documents associated with contract requests and contract projects based on the user’s permissions and the stage the user is in within the workflow.
- Structuring Data. An efficient global solution will ensure optimized performance by mapping unstructured information into structured data, and leveraging industry-standard databases for repository functionality. As a result, no significant modifications are required in legacy IT infrastructures.
- Customizing Contracts. With an agile global solution, no source code modifications are required when changing contract structures. In fact, in just minutes, non-technical end-users can create the tailored fields they need for easily configuring contracts to the specific and complex requirements of global businesses.
4. A global CLM solution should benefit the entire enterprise.
A globally deployed CLM solution can deliver a wide range of benefits to an even wider range of end-users throughout the enterprise. Outside of legal, different departments have needs for meeting how they use the CLM system. Consider the following:
- Financial Departments. With the ability to rollup data across multiple global data centers, for example, a global CLM solution offers financial managers snapshot views of all contracts in negotiation. This information delivers an unprecedented ability to assess overall risks, and to drill down to the specific contracts that may be modified to adjust this risk profile. Financial departments can also rely on CLM for more accurate revenue forecasting than is possible with traditional tools, such as sales force automation systems.
- Procurement Departments. Procurement departments benefit through global visibility to master procurement agreements. Global companies using contract lifecycle management can ensure that all local contracts conform to the terms and specifications in these agreements. As a result, the true value of master contracts can be unlocked and costs controlled.
- Sales Departments. Sales organizations in global environments can benefit from the ability to calculate the aggregate optimized value of any given contract. A clear understanding of both the extrinsic and intrinsic values and risks associated with a specific contract can provide essential clues for how to tweak sales efforts and refine financial projections.
While these requirements only scratch the surface, they provide a modicum of knowledge of the challenges faced in deploying CLM globally.
Join Determine and IACCM for our webinar to learn what effects the coming year will have on your contracts. We’ll discuss how best-in-class companies use contract management to prepare for the increased volatility of an ever-changing global business environment.