Opinions and discussion on content management and document management by two of the biggest guys in the business. *Measured by combined weight

Building a Custom Contract Life Cycle Management Solution on ECM

Follow Marko

Follow Lee

  • random thought-if you want more “data scientists”-don’t call them “scientists”-find a term thats not so stuffy. like wrangler or pirate 6 days ago

Disclaimer

The opinions shared here represent those of the contributor themselves and not those of their employers nor that of Big Men On Content as a whole.

I’ve been researching the Contract Life Cycle Management (CLM) ecosystem which has started to overlap the Enterprise Content Management (ECM) ecosystem.  In yesterday’s post, I grouped the CLM vendors into three categories based on the level of their out of the box functionality.  But I really can’t give a perspective on CLM without addressing a custom CLM solution built on an ECM platform.

So what does a custom CLM solution on an ECM platform look like?  ECM platforms, especially those that include compound document support, can easily support everything from contract drafting to obligation tracking.  Here are the additional features that would be in the CLM solution you could build on an ECM platform.

 Support for electronic, paper, and faxes.  Yes, faxes.

While an organization may want to “go paperless,” its suppliers or customers may not be ready.  Unless your organization is big enough, you will need to be able to support your trading partners’ processes.  This means supporting electronic contracts, mailed paper contracts and faxed contracts.  If push came to shove, you can probably treat fax contracts as paper contracts.

For electronic formats, MS Word is still king, but with other formats out there you need to be able to make sure that your documents will open in those as well.  The layout needs to be consistent in each of these transformations.  Phone conversations about contracts usually sound like, “On page 15 line number 23, I have a question ….”  If both parties don’t see the same thing, then questions may arise.  This is why PDF is usually a good common format for negotiation.

Contracts can have related documents that will live separate lives

All of the documents related to a contract need to be available in a contract record view.  Some of the related documents may be needed in other business processes that don’t need access to the underlying contract.  The CLM system needs to know what supporting documents are needed for each contract type and make them available to other departments.  This needs to be addressed by both security and by integration to other business processes.

For example, a vendor contract related to food will probably require health inspections for the vendor’s facilities that produce the food.  That inspection may require annual renewals, which means it may expire more often than the contract.  Usually the Food Safety Team, and not corporate legal, will be monitoring these health inspections.  The Food Safety Team may need to see that document associated to its records on the vendor.

The loading dock may also need to know that this inspection is current to take delivery of the goods.  The loading dock does not need to see the contract.  The loading dock will need to see the inspection in relation to in incoming shipment.

Graphical Workflow and Advanced Tasks

How any two organizations approve or negotiate contracts can be very different.  As corporations move from paper to electronic contract processes will change.  This means workflow processes need to be easy to understand and able to changed quickly.  Graphical workflow tools make workflow tasks easy to navigate as they show both parallel, serial, and rejection paths.

A majority of any standard workflow tasks should be completed using configuration only in the graphical tool.  Mature ECM platforms do not require coding for basic workflow tasks.  Basic tasks like creating documents, changing keywords, comparing keyword values, adding attachments, moving documents, and changing security should all be completed by a power user without coding.  Some ECM platforms support over 150 configurable tasks.

A CLM solution’s workflow also needs to support standard business processes like load balancing of work queue, out of office delegation, and voting logic.   All of the workflow tasks need to be logged not only for audit purposes, but also to be used as metrics for process enhancements.

Retention and Document Storage

It surprised me to see how few CLM vendors see records retention as a requirement, especially with retention often being one of corporate legal’s responsibilities.  A CLM solution needs to ensure that contracts and related documents are maintained for a predetermined retention period.  Contracts drive business and if any legal question emerges, then those contracts will be needed.  A CLM solution needs to tie into a corporate records solution or include record support of its own.  That not only means tracking the retention of documents, but also ensuring documents are kept that are on legal hold.

Along with the retention of contracts, storage is an issue.  Because of retention, a CLM solution will need to store contracts and related documents for every customer it has going several years back.  Depending on the number of trading partners, this could be a significant collection of documents especially depending on the years of retention needed.  The solution needs to be able to manage the collection efficiently and be able to back it up easily.

The CLM solution also needs to handle this collection during upgrades over the years.  If upgrades require migrations to new instances, this will not only be costly in larger collections, but it introduces unnecessary risk.   ECM platforms already address these storage issues by supported multiple storage devices and technologies.  ECM platforms support real upgrades where data and content stay in place.

All That and Keep Up

Technology doesn’t stand still.  New features will be needed.  Users will want to be able to review a red line in a contract on a mobile device.  They will need to be able to support contracts in multiple languages. Capability wise, ECM vendors can meet or exceed the challenges of CLM.

The problem with building a custom solution is that once the developers leave, the responsibility falls back on the customer to maintain and improve the solution.  Here is where CLM vendors show their value over ECM platforms.

Summary

Since corporate counsel, along side accounting and human resources, is a major component of every large organization, then contract management is a challenge in every organization.  So why is it that the ECM platform vendors mostly ignore this foundational enterprise user group?

Tagged as: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: