Leading the Supply Chain through a Transformational Journey
The journey to “world class” takes time. When implementing a Contract Lifecycle Management (CLM), it does start by focusing on some fundamental elements including; people, processes, data and the system. Each one of these elements has to be broken down and fully addressed to be effective in a digital transformation. Addressing only one of these corner stones will lead to an incomplete transformation. No digital transformation is flawless even with the best planning and clearest of directions, there are just varied level of success. None of the elements listed above are new, many companies understand the importance of addressing all four, yet some continue to make the same mistakes.
People, the Teams need to get comfortable with being uncomfortable. In a transformation the whole world that people operated in is going to change. The Organizations need progressive risk takers who embrace failure and adjust quickly. The way that work is done today is not how it will be done in the future. Not only does the future hold different roles for the people it also requires a change in the mindset. Instead of process driven and paper contract templates, the future is focused on innovating, growth mindsets that challenge the status quo and seek advanced flexible analytical solutions. Some of the traits needed for business transformation include effective relationship management with strong communication capabilities, understanding of the business and trade-offs, the ability to interpret system driven analytics and communicate the business impact or benefit.
Training and communication are key elements during a normal course of managing your business; during a transformation the need for both increases exponentially. We underestimate the importance of consumption and acceptance of a message. The message is, “change is coming, it’s going to benefit them and here is how”. The more excited the team is, the more they can see a CLM helping their day to day lives, the more likely they are to hear and accept the messaging that change is coming.
Processes, like clutter, accumulate over time and in some organizations were born out of exceptions rather than general guidance. The typical question that I was asked around processes; “what comes first, the process clean up and alignment to determine the solution or the system selection then the alignment of the processes to the system?” This decision ultimately goes back to a culture or an organizational alignment question of who is driving the transformation; the business or IT. Either way, the processes, in their end state, will need to be updated to reflect the future state of how the work will be performed or the workflow. Without the necessary process updates there is confusion, mis-alignment and gaps in the roles performed by the team. Therefore, processes should also be completed before the solution is implemented, clean-up work after an implementation leads to potential compliance gaps or at a minimum, confusion around role clarity.
Data, the age old adage “Garbage in garbage out” is especially true when dealing with data. Ensuring that the data is accurate and in the right format going into the new system or application ensures the data can be consumed, ingested and recovered when the system is up and functioning. Every piece of data is important, whether it’s a complete contract, the duplicative purchase orders generated off of that contract, to the placement of commas and periods.
Don’t underestimate the time that it will take to cleanse the data and the importance of keeping it clean after the initial actions have been taken. It sounds easy, however sifting through hundreds of thousands of contract and supporting documents takes time.
System, what comes first, the commercial off the shelf CLM solution, and adjusting your contracting processes to the system workflow or the business process updates and configuring the system to fit your process flow? If the platform is intended to be “best in class,” with workflow based on industry standards, wouldn’t companies consider adjusting their processes to fit within the standard workflow of the system? Whichever approach you or your company decide to take it is critical to make certain that the system meets your business user’s current and future needs. This requires a contracting strategy and vision that is enabled by a system. The system, whether it be a CLM, SRM or any other platform, is the tool that enables the team to perform their job function effectively and efficiently. The system is only as good as the all of the parts that make it whole and fits within the business strategy.
No system implementation is flawless. Anticipate the unexpected. No matter how much planning and preparation teams may do, no implementation is without some type of glitch. The key to minimize possible mishaps is to fully address all elements of the transformation; people, processes, data and the system. Also, do not under estimate the complexity of these four fairly straight forward elements. To address these elements requires a highly productive team consisting of your CLM provider, IT organization, development/implementation team and the end-users to be engaged in every aspect from planning through troubleshooting of defects once the system is live.