5 Steps to Building the Business Case for a Contract Management Solution

1. Establish the context and need

Begin your business case by outlining the pain points your legal department faces due to current contract management inefficiencies. Demonstrate how these challenges impede operational efficiency, risk mitigation, and compliance.

Emphasize the tangible impact of these challenges on your organization, using data and real-world examples to paint a clear picture of the need for a contract management solution.

For example, per World Commerce & Contracting, poor contract management practices and noncompliance cost businesses an average of 9% of their annual revenues. You should also compile metrics that show the time and effort expended on your existing contract management process, such as how much time is spent processing contracts from drafting to execution.

Remember, not everyone in your organization will understand the impact of contracts on the bottom line. Positioning contracts as a business asset will underscore their value and the importance of an investment in this area.

This initial step not only sets the stage for proposing a solution but also highlights the urgency and necessity of addressing these challenges head-on.

[Download our free business case template for more real-world examples and insights backed up with third-party data, and start building a compelling case for a contract management solution that addresses your specific needs.]

2. Engage and collaborate with stakeholders

The success of your business case hinges on engaging key stakeholders, from executive decision-makers to the end-users within the legal department. Tailor your communication to address the specific interests and concerns of each stakeholder group.

For decision-makers, focus on the return on investment, cost-benefit analysis, and risk mitigation. One example might be the improved ability to proactively renegotiate unprofitable terms before a contract renewal deadline passes.

For users, emphasize usability, efficiency gains, and how the solution addresses current pain points. An example here would be simplifying the process of identifying when a contract strays from your organization’s preferred language.

Building a coalition of support across the organization will go a long way toward securing buy-in.

3. Showcase the solution, vendor background, and organizational benefits

When presenting your chosen CMS, it’s essential to highlight how it addresses the legal department’s immediate needs and how the solution aligns with your organization’s goals, and also provide background on the vendor to reassure stakeholders of its long-term viability and scalability.

Specifically, you should illustrate how the solution meets your key requirements, focusing on how it delivers your “must-have” features, provides essential implementation support, ensures fast adoption, and achieves fast time to value.

To connect the dots between this strategic investment and its broader impact on the organization, you could detail how streamlining contract management tasks frees up legal team resources, boosting companywide efficiency. Stress that timely, favorable contract renewals can significantly reduce overall operational costs.

To emphasize the value of your chosen vendor, consider these key points:

• Vendor stability and market presence: Share insights into the vendor’s history, their market presence, and track record of success. Highlighting years of operation, a robust customer base, and industry recognition can underscore the vendor’s stability and reliability.
• Innovation and futureproofing: Discuss the vendor’s commitment to innovation, evident through a product development roadmap of regular updates, feature enhancements, and responsiveness to changing technology trends. This demonstrates their capability to keep your organization at the forefront of contract management efficiency.
• Scalability: Emphasize the CMS’s scalability, showcasing its ability to accommodate growing contract volumes and adapt to complex organizational changes. Mention any scalable infrastructure, such as cloud-based solutions, that can expand with your business needs.
• Customer success stories: Incorporate testimonials or case studies from the vendor’s current clients, focusing on long-term partnerships and how the CMS has scaled with their growth. This provides tangible evidence of the vendor’s ability to support clients over time.
• Support and partnership: Highlight the level of support and partnership the vendor offers, from implementation through to ongoing usage. A vendor that acts as a partner, offering robust training and customer service, ensures you’re not just purchasing a tool but gaining a resource that contributes to your success.

Incorporating this background information helps to build confidence in your chosen CMS and its vendor, assuring stakeholders that the investment will deliver value not just in the short term but as a long-term asset to the organization.

4. Present an implementation roadmap and financial plan

Detailing a clear, realistic implementation roadmap is critical for reassuring stakeholders about the feasibility and manageability of the transition to a new CMS. This includes timelines, milestones, resource requirements, and a plan for change management to ensure smooth adoption. Highlighting the support and partnership of the CMS provider throughout the implementation process can also alleviate concerns about potential disruptions.

Accompany this with a comprehensive financial analysis that covers the investment required, anticipated return on investment, and a cost-benefit analysis. This step reassures stakeholders of the project’s feasibility and strategic alignment with financial goals.

[Download Bloomberg Law’s business case template to effortlessly craft a compelling presentation. Use ready-made slides designed for clear and impactful communication of your contract management solution’s benefits.]

5. Come prepared to address common concerns

When presenting your business case, anticipate and prepare for common concerns that stakeholders may have. This proactive approach not only demonstrates thorough preparation but also builds confidence in your proposed solution. Here are some common concerns and how to effectively address them:

• Concern: Is this just adding an unnecessary cost?
  • How to address: Detail the long-term cost savings and ROI. Highlight how automating parts of the contract management process significantly reduces manual labor and errors, leading to cost reductions over time.
• Concern: Will implementation disrupt our current operations?
  • How to address: Introduce a phased implementation approach that minimizes disruption. Emphasize vendor support and training, sharing timelines from successful implementations for similar legal departments.
• Concern: Aren’t we using too many tools already?
  • How to address: Showcase how the CMS complements and simplifies the existing tech stack.
• Concern: Will training be too complex and time-consuming?
  • How to address: Stress the CMS’s user-friendly nature and the comprehensive training resources provided, ensuring a smooth learning curve for all users.
• Concern: Our current processes work fine; why change?
  • How to address: Illustrate current contract inefficiencies and how the CMS directly addresses these, offering improvements in workflow, compliance, and productivity.
• Concern: How secure is the new tool?
  • How to address: Outline the CMS’s robust security measures, including data encryption and compliance with industry standards, to reassure stakeholders of its safety and reliability.