The good news is two-fold: 

(1) this means that there is an active market out there, and
(2) the market is likely to have offerings that will fit your needs.  

Categorizing Contract Management Systems

The best way to start to understand the contract management systems market is to define broad groups of systems, and then dig down further.  

Let’s start with the BIG picture.  Contract systems can be what we call Generic Systems or Industry Specific Systems.  

Generic Systems vs. Industry Specific Systems

Generic Systems are those that tend to useful across multiple industries and offer a wide selection of features that are common to many industries and may also offer some industry-specific features.  

The Industry Specific Systems have large portions of their systems with specific features dedicated to one industry—like real estate, insurance, hospitality or healthcare.  

It isn’t necessarily true that one type is “better” than another type of solution.  Some may offer specific solutions but are more expensive and/or less flexible than other systems.  Alternatively, a generic solution may offer features for an industry, but do not go deep enough.  

So, if you are looking for a solution that targets your industry, you might want to start with that focus, but remember that the generic systems may offer exactly what you need.  And, there are many more generic systems out there than industry specific solutions.  

Function Specific Systems vs. Hybrid Systems

Depending on your focus, your intended user base, you may be looking for a Function Specific solution or a Hybrid Solution.  

A Function Specific solution may be focused, for instance, on Sales, or Legal or Procurement.  Each have different needs and a different focus. We have seen many instances where Sales, or Legal or other groups are spearheading the process, and their priority has been to fix their own problems.  It may be quicker to decide this way rather than open the process up to multiple groups and the attendant meetings and committees and voting and resolving competing issues. Ownership and control issues are also very important.  

A Hybrid system is an interesting alternative.  With this type of system, the software is intended to support multiple needs—perhaps multiple departments, multiple functions.  Most of the “generic systems” will fit into this category. As generic products develop over time, clients may ask for specific features to be added that will help the users to manage contracts more efficiently.  Some of those features, invariably, take on the flavor of the industry that the user is in.  

Reality Check!

In some cases, the product acquisition strategy has been to solve problem #1, and then address other issues and departments.  This may—or may not—work. The good news is that you have organized and solved a problem, and the solution may be good for the next two years, or perhaps will become the base of a larger solution.  There is no one easy answer to this. At least you are better organized, you have thought through and lived through implementation issues, and you have some sense of what works and what doesn’t work.  I would chalk it up to a learning experience and consider it money well spent. And, at minimum, it can be considered to be a practical “proof of concept” test before an enterprise or multi-department rollout.

The reality is that one solution may not fit all circumstances.  So, if different divisions use different contract management solutions, that is OK, as long as you know why you made those decisions and what the impact will be, if any, to the organization.  There is a lot to be said, however, for the wisdom in standardizing on one particular platform when viewed from the top down.  

If any of you have been through an SAP or Oracle Financials implementation, you know that it is very costly, requires a lot of time, effort and coordination and then sort of takes on a life of its own with its own cost structure.  So, be aware that there is a real cost (and expected benefits) to the organization in implementing total enterprise systems.  

In other articles in this series, we will be looking into contract management system licensing, capabilities, tools and features.  

If you would like to see more, please visit Great Minds Software to learn more about Contract Management Systems. 

Author:  Alan Mazursky
February 2020

The post Selecting a Contract Management System, Part III Understanding How to Classify Contract Management Systems first appeared on Great Minds Software.

Where to Start?

If you found your way here, you are on the right track!  There are questions that need to be asked, though. Here are some issues to consider:

What do you want to get out of a contract management system?
It always helps to know what you want, right?

If you don’t know what you really need, you may wind up with a product that looks good but doesn’t do what you really need it to do. 

So, where do you start?

You may not know the full scope of what is available and what may be really help now or in the future.  I recommend a multi-pronged approach to getting up to speed fast:

Not all organizations need to be so formal, but this shows a thorough approach.  It is very much a cultural issue in the organization. But best business practices and best governance practices suggest that managing your organization’s contracts well is very important to its business health. 

We have seen large organizations opt for basic contract management tools, while others need the full cradle-to-grave approach.  Similarly, we have seen smaller organizations opt for a complete integrated contract management system, with workflows and digital signatures and financial transactions—while others are OK with the basics.  And some upsize and some downsize based on their needs.  

In other articles in this series, we will be looking into contract management system capabilities, tools and features.  

If you would like to see more, please visit Great Minds Software to learn more about Contract Management Systems. 

Author:  Alan Mazursky, CEO

The post Selecting a Contract Management System Where to Start? first appeared on Great Minds Software.