12 Questions to Ask Before Buying Vendor and Contract Lifecycle Management Software

Choosing the right Vendor and Contract Lifecycle Management (VCLM) software is crucial if your organisation seeks to enhance the visibility, control, and compliance of its contracts and vendor relationships.

To assist you in making the correct investment that aligns with your business needs, we’ve created a comprehensive list of buying questions to use as you go to market.

This guide outlines the key considerations and critical questions you should ask during the selection process, ensuring you choose a VCLM solution that meets your immediate requirements and supports your business’s long-term strategic goals.

What is a Vendor and Contract Lifecycle Management Platform?

A VCLM platform integrates Contract Lifecycle Management (CLM), Vendor Lifecycle Management (VLM), and Third Party Risk Management (TPRM).

It helps your business to transition from the inefficiencies of manual spreadsheets, emails, and disparate systems by centralising and automating contract and vendor management processes.

VCLM enhances visibility, control, and compliance by minimising manual data entry and eliminating fragmented communication. It allows your business to operate more efficiently and respond proactively to changes and risks.

What should you ask a vendor and contract management software provider?

Choosing the right vendor and contract management software is a critical decision that can significantly impact your organisation's efficiency, compliance, and overall success.

Asking the right questions helps ensure that the solution aligns with your specific needs, integrates seamlessly with existing systems, and provides the necessary features to manage vendors and contracts effectively.

By carefully evaluating potential providers, you can avoid costly mistakes, ensure smooth implementation and adoption, and achieve better outcomes for your business. Below are some essential questions to ask providers. 

1. How does the platform integrate CLM and VLM capabilities?

A unified VCLM solution should seamlessly integrate CLM and VLM functionalities, providing a holistic approach to managing both vendors and contracts.

This integration allows for better coordination, as contract performance directly impacts vendor relationships—especially when it comes to renewals and renegotiating terms.

The software should facilitate smooth transitions between contract stages and vendor lifecycle phases, improving overall management efficiency.

2. How does the software enhance visibility across contracts and vendor relationships?

Visibility is crucial in VCLM as it enables your business to track every stage of the contract and vendor lifecycle.

A robust VCLM solution should offer a secure, centralised repository, comprehensive dashboards, and real-time updates.

This creates a single source of truth for all vendor and contract information, giving you the visibility needed to make informed, early decisions and proactively mitigate risks.

3. What level of control does the software provide over vendor and contract data?

Control over data is essential for maintaining accuracy and integrity in VCLM processes.

This helps to safeguard sensitive information and ensure accountability. The solution should offer robust access controls, audit trails, and data management features that allow your organisation to manage who can input, view, edit, and approve vendor and contract requests.

These controls should facilitate compliance with internal policies and external regulations, enforcing standards and maintaining governance across all data interactions.

4. Can the software automate workflows for vendor and contract management?

Automation is a key feature that enhances control and efficiency. Automated workflows reduce manual errors, speed up processes, and ensure that all tasks are completed in accordance with predefined rules and timelines.

The VCLM solution should offer automation for contract approvals, vendor onboarding, compliance checks, vendor performance monitoring, and third-party risk mitigation.

If your organisation’s current workflows require some work, also ask the VCLM provider if they offer best-practice templates to help you get up and running.

5. How does the software facilitate vendor onboarding and offboarding?

Vendor onboarding and offboarding are critical stages that require careful management to ensure compliance and control.

Ask VCLM software providers whether they offer a branded vendor portal, along with automated due diligence questionnaires and onboarding workflows. These tools ensure a consistent and standardised approach, reducing the risk of errors and enhancing overall efficiency.

By automating these workflows, your business can manage vendor relationships more effectively.

6. How does the software support risk management for vendors and contracts?

Risk management is critical in both contract and vendor management. Look for automated capabilities that eliminate the stress of staying on top of regulatory, clause, or personnel changes.

The VCLM software should offer risk assessment tools, such as vendor risk scoring, contract risk analysis, and automated risk alerts.

By identifying and mitigating risks early, your organisation can avoid penalties, fines, and reputational damage by maintaining a strong compliance posture.

7. How does the VCLM software help businesses to manage third-party risk?

Managing third-party risk is essential for protecting the integrity and security of business operations. A robust VCLM software with advanced capabilities offers comprehensive tools to monitor and manage third-party risks effectively.

Look for real-time insights, including financial and cyber health assessments, adverse media alerts, and updates on changes in vendor status.

With automated vendor risk assessments and continuous monitoring, your business can identify and mitigate potential risks early.

8. Is the solution scalable to accommodate future growth and complexity?

As your business grows, your VCLM needs will evolve. Be mindful of changing regulations and the flexibility required to adapt to them.

The solution should be scalable to handle increasing volumes of contracts, more complex vendor relationships, and additional users without compromising performance.

Ensure that the platform can adapt to changing business needs without requiring significant reconfiguration or additional costs.

9. What security features does the software offer to protect sensitive contract and vendor data?

Security is paramount when managing contracts and vendors, as both processes involve handling sensitive information.

Your business should look for a provider that demonstrates a strong commitment to security through adherence to industry standards and certifications such as GDPR, SOC 2, and ISO 27001.

Also, ask where your data will be hosted, as they will be acting as a data processor on your behalf, and you need to know that they are acting compliantly too.

10. What does the onboarding process look like for your business?

Beyond simply migrating your data into the system, it's essential to evaluate what additional support is being offered to help you get fully operational.

Consider your success criteria for implementing the VCLM system: have these goals been accurately identified and documented during the initial discussions, and are they integrated into the onboarding process? Does their timeline match your expectations?

Look for a provider that prioritises your desired outcomes, with a clear, detailed plan for achieving them. Key aspects to inquire about include end-user training programs to ensure high adoption rates, integration capabilities with your existing systems, and ongoing support to address any challenges that may arise.

11. What kind of training and support is provided?

Successful adoption of VCLM software depends heavily on the support and training offered by your chosen providers.

Look for solutions that offer comprehensive onboarding, ongoing training resources, and responsive customer support. Prioritise providers who have in-house teams as opposed to outsourcing support to third parties.

Access to learning management systems, knowledge bases, and regular updates can also enhance your team’s ability to use the platform’s capabilities fully.

12. What is the total cost of ownership, including implementation, training, and ongoing fees?

Understanding the full cost of ownership is essential when choosing a VCLM solution.

Beyond the initial purchase price, consider costs related to implementation, customisation, training, and any additional fees for features or integrations.

Ensure that the solution provides clear value that justifies the investment and aligns with your budget and strategic goals.

Wrap Up

The questions outlined in this article serve as a guide to help you navigate the evaluation process, focusing on key VCLM and implementation areas such as security, integration, user adoption, and risk management.

By asking these questions to multiple providers and comparing the results, you’ll be able to make the most informed decision for your business.

Remember, the right VCLM software should not only meet your current requirements but also support your future growth and evolving needs. Taking the time to ask these critical questions will ensure that you select a solution that truly enhances your vendor and contract management processes, driving value and efficiency across your organisation.

If you want to know more about Gatekeeper specifically, get in touch today.