Don’t throw the whole textbook at a ten-year old on the first day of school

– In CLM, it’s OK to say no to flashy AI and blockchain for now –

A recent Gartner study estimates that 50% of all first-time contract lifecycle management (CLM) implementations will have failed by 2023. As COO of a CLM software provider with 20 plus years in business and technology, this finding doesn’t surprise me. And the main reason behind it, as Gartner points out, is unrealistically high technology expectations at the outset.

My early career was spent as a middle school teacher in the Finnish public school system. Obviously in a class of 10 year-olds, a 50% failure rate won’t fly, and I think the learnings from that time can still be applied. Classrooms, just like businesses, are made up of people, who can easily get overloaded by too many new features or concepts. And this is the main reason why so many digitalisation efforts fail to take hold.

As a teacher, my favourite subject was math, which doesn’t come easily to a lot of kids. Some of my class nerds could grasp abstract concepts effortlessly while others needed a more practical approach to understand. They also learnt at different speeds, meaning you can’t throw the whole textbook at the students on the first day. If it’s geometry you might lead with a simple right-angled triangle before bringing out the tetrahedron. The same logic applies to moving 1000 plus employees from paper contracts to sophisticated CLM solutions. People need time to be able to connect the dots.

So, if we get a call for tender asking for CLM applications that are driven by AI and the submitting organisation is still working with contracts on paper, an alarm bell will go off in my head. Even though Cloudia is well-positioned to supply a full-suite of software solutions, my concern is that there are just too many steps and processes in the journey from paper to AI to make it feasible.

Another concern is when potential clients send us wishlists. These have been first circulated among their many departments, where disparate people, including C-level managers, lawyers, procurement officers, sales professionals and outside consultants, have all added their favourite technologies and features. Sometimes as many as 20-25. It’s as if people can’t wait to start loading up their trolley with all these shiny new things. And I understand it because there are a lot of exciting, leading edge solutions out there. But the fact is, the more things on the table, the higher the percentage of failure during implementation.

So, taking heed of the Gartner study and the benefit of my own international experience in digital software, we advise our clients to start slowly and not to get caught up in all the AI, blockchain, and RPA mumbo jumbo straight away. Because too often these buzz technologies start blurring the big questions like: why are we doing this and how is it going to create value?

You have time to develop your technology edge. These technologies are still evolving. And if you start with small steps, software providers like Cloudia will stay on the journey with you, expanding into new iterations as you go along.

Cloudia has already supplied more than 450 successful CLM software contracts, including to very large organisations. We recently served a private sector client with around 15,000 employees in 20 countries. They elected to start slowly, leading with CLM and digitalisation of their paper documents, adding only three to four other main functions, while making sure that the whole organization was following along. Additional upgrades included standardising all their major contract templates and defining the right meta data for optimal search functionality. Next, they plan to automate their authorisation work flow as well as set up a milestone and obligation management function, which traces obligations and tasks related to each contract and assigns them. Our client’s approach was successful and they have been able to see immediate results. No one got overloaded and the process was smooth.

Thankfully, in this second career of mine, in software services, I’ve managed to avoid a repeat of my worst memory as a middle school teacher. At that time, I had to cover all curriculum subjects, even coaching the class at baseball. The playing levels of the children varied, including one boy who didn’t have a lot of talent for the game. I’ll call him Risto. One afternoon, Risto had obviously had enough learning for the day. It was a crucial point in the game when the ball flew straight to him. Risto fielded the ball and instead of tossing it to his screaming team mates, he turned his back and threw the ball away into the forest. The class collapsed into chaos. The bases were overloaded, and so was Risto.

My goal working in the grown up world is to avoid the CLM software equivalent of Risto’s baseball move, which might be an overloaded procurement manager standing up one day and just tossing his laptop out the office window.

Markku Jokiranta
COO, International operations
Phone: +358 400363810

Interested in digitalizing your contract management? Find out more from our one-stop guide to eContracting

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