“Does your contract management solution offer a repository?”
“Does your contract management solution enable Microsoft Word® authoring?”
“Does your contract management solution support workflows?”
These simple questions—and about 100 more like them—constitute the typical checklist-style request for proposal (RFP) template used by most companies seeking a contract management solution. But, straightforward though it may be, this approach to selecting a contract management software solution is grossly inadequate.
There are three primary reasons why companies should steer clear of the simple yes/no feature list when seeking a contract management solution:
Rather than looking at features, companies should instead focus their search for a contract management solution on their own business requirements. In other words, the search for a contract management solution should begin with a clear understanding of the specific needs for contract management by all stakeholders across the entire lifecycle of contracts.
Buy-in for any software purchase that can impact the entire enterprise is critical, and with contract management, even more so. Why? A greater number of individuals than one might think are involved with creating, approving, executing, or consulting contracts that impact relationships with customers, suppliers, partners, and employees. A comprehensive contract management needs-analysis will help identify these individuals or groups so that no requirements are inadvertently ignored.
Contract management needs should be delineated in a business requirements document—and the report should be completed before an RFP is issued. In fact, this report should serve as the very foundation for the contract management RFP. Only by asking vendors to match their features to the problems and issues you want your contract management solution to address, can vendors target their responses. And, only by evaluating these targeted responses can you begin to see differentiation between solution offerings and so start to narrow the field of respondents to a short list of finalists.
Vendors may claim broad differentiation, but in one area they all are pretty much the same: when asked if they can do something, they almost always say “yes,” even if the reality is otherwise. To successfully wend your way through this minefield, begin by creating a weighted value matrix for each need delineated in the requirements document. Microsoft Word-based authoring, for instance may be critical for 20 percent of stakeholders, important for 75 percent of them, and of no value whatsoever for five percent. And so on.
Next, establish a contract management solution review team comprised of representatives from each stakeholder group. These individuals should be given detailed scorecards that prompt them to look beyond the feature being touted by the respondent in a proposal or at a demo of the product. Instead, the focus should be on how that feature specifically addresses a matching need. Team members should be advised about the importance of this process and should be coached to take it seriously, assigning scores only after they are completely certain they understand vendor inputs.
It is true that individual team members may have a bias toward certain features or to the importance of one need over another. But, when all scores for all team members are combined with the initial value weighting matrix, you’ll have an accurate and unbiased overview of how well any given solution will meet overall business requirements.
A needs-based RFP and scoring process can also be invaluable in streamlining solution implementation. The reason is that if the requirements document is not available at the outset, then one will be required when the system is installed. Otherwise, there will be no way of knowing what process gaps need to be addressed, and what features need to be turned on to address those gaps.
The problem here is that if the professional services team implementing the solution is required to create this document, time to implementation will be delayed. Furthermore, allowing a solution vendor to create a requirements list is a little like putting the proverbial fox in the hen house; final results are likely to be skewed to leverage the features of the solution.
What it comes down to is this: there are as many ways to interpret contract management solution features as there are features. But business requirements are something else entirely. They’re specific and pressing, and unless a contract management solution vendor is prepared to tell you exactly how their solution can address those requirements, you should look elsewhere.
Interested in hearing more about choosing the right contract lifecycle management solution for your organization?
Selectica develops innovative software that the world’s most successful companies rely on to improve the effectiveness of their sales and contracting processes. Our guided selling, sales configuration, and contract lifecycle management solutions support the Global 2000 and growing mid-size firms in closing billions of dollars’ worth of business each year. Our patented technology, delivered through the cloud, makes it easy for customers in industries like high-tech, telecommunications, manufacturing, healthcare, financial services, and government contracting to overcome product and channel complexity, increase deal value, and accelerate time to revenue. For more information, visit www.selectica.com or call 1-877-712-9560.<< Back to resources