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Throughout the Gatekeeper Blog, we’ve written a range of articles to help you understand and implement a Contract Management System (CMS) in your business.

In this related article, we discussed the high-level steps involved in getting prepared for the implementation of automated and manual contract management practices in your organisation.

Here, we move down a level in detail to highlight what you need to do to prepare a clear set of requirements for your CMS.

This means determining what you do now, how it's done, who does it, what's wrong with it. This gives you a baseline.

Then you work out how you want to do it better, who needs to be involved, and what level of automation you want. This gives you your target future state, and a roadmap for measuring your progress from where you are now to where you want to be.

You'll end up with a set of specifications you can use to test the suitability of any particular CMS for your needs, as well as guide the configuration and set up of the chosen CMS.

Documenting your requirements

To be effective in specifying all your requirements, you'll need to be very organised, disciplined and thorough in your approach.

To help you with this process, we’ve created an Excel Contract Management System Requirements Template, which you can download and use as-is or modify as necessary to match your needs.

Download Your CMS Requirements Excel Templates >>

It will help you to capture the relevant information for each of the eight steps we outline in this article.

You’ll establish a baseline for where you are today, the targets you'd like to reach and be able to track your progress towards them.

Key steps

The key steps involved in specifying your CMS requirements are:

  1. Identify your stakeholders
  2. Describe your issues
  3. Document your processes
  4. Determine the scope
  5. Research the market
  6. Propose initial requirements
  7. Validate initial requirements
  8. Restate final requirements

1. Who are your stakeholders?

When you consider all the activities that might be performed in managing contracts, it may be something of a surprise to discover how many people can be involved in some fashion.

The IACCM have estimated that the cost of the average contract, based on the time spent by multiple parties within the business in preparing and agreeing it, is at least $6,900.

Apart from any dedicated contract management staff, the parties involved might include:

  • Any part of the business that needs to specify, acquire and use products and services from third parties
  • Procurement
  • Legal
  • IT
  • People with spend approval rights
  • People with contract signing rights

To ensure your requirements document meets the needs of all the relevant parties, you need to identify them all and invite them to provide their input.

2. What issues are driving your need for a CMS?

For this part you need to be completely objective and dispassionate about the issues you’re experiencing and the problems you’re trying to solve. There are many common contract management pains that businesses share, but you have to establish the answers to hard questions like:

  • Do you have too many contracts to manage manually without enough staff to do it?
  • Are you using Excel to manage contracts?
  • Does it take too long to get contracts approved and then signed?
  • Do you miss important contract dates?
  • Do you lack robust processes, or do people ignore them?
  • Would you like to use or link to information held in other systems you're using?
  • What specifically is causing you problems with your contracts?

To help you really understand the issues and the root causes, you might want to use the “Five Whys” methodology to drill into each question.

By examining your issues in detail, you’ll get an initial insight into whether the introduction of a CMS can provide the required solutions, either directly via its capabilities or indirectly via supporting processes.

A contributing factor in many issues could be your maturity level in respect of contract management practices. An honest self-appraisal based on Contract Lifecycle Management Maturity Levels will establish your baseline maturity level.

3. What contract management processes do you have?

Because implementation of a CMS can provide the opportunity to re-engineer existing processes, it's necessary to document any relevant processes currently in place, covering but not limited to:

  • The process flow
  • The people / roles involved
  • The scope and availability of appropriate documentation
  • The level of compliance with the process, especially when usage is mandated
  • The nature of any SLAs or performance measures in place in the process and reported
  • Any other problems associated with, caused by or affecting the process

We’ve outlined the importance of this in more detail in this related article.

This documentation provides another baseline measurement. It can not only be used to validate your assessed contract management maturity level, it will also be useful down the track for a CMS supplier to understand how its solution might be implemented for your organisation.

4. What is the scope of contract management practices you require?

Our free ebook - The Complete Guide to Contract Lifecycle Management (CLM) - describes a wide variety of activities that might be performed in the practice of CLM.

While many activities would generally be considered as core, every organisation should decide for itself which activities they feel they need to undertake now and in the future to meet their specific contract management needs.

The template lists a wide range of these typical CLM activities, allowing you to indicate:

  • Activities undertaken now and how important they are. This provides your final baseline measurement
  • Activities to be undertaken in the future and how important they are. This will provide a roadmap for resolving your issues as well as increasing your contract management maturity level.

The template can be expanded to include activities specific to your organisation, industry, country, contract types used or any other criteria required.

It is critical that your scope is realistic, sufficient and achievable in terms of resources, time and money.

5. What CMS capabilities are available in the market?

Having identified the nature of the issues you're having with contract management and the scope of practices you need to adopt, you can take a preliminary look at what's available in the market to help deal with those issues.

Research the market and select a few candidate CMS providers. Study their product literature and view any online demonstrations that are available.

While you're looking specifically for capabilities that deal with the issues you're facing, keep an open mind and don't ignore others that could prove beneficial for your future state.

It's also useful to take note of capabilities that you're just not likely to use, either just at this stage or ever.

Bear in mind that many CMSs are extendible, either by configuration, customisation by the user, or customisation by supplier programming changes.

So, a capability that at first glance might not seem to be provided in a CMS may be indirectly available by use of its extendibility features.

The template allows you to record any CMS capabilities of interest discovered during your research that have not been covered in the template.

6. What are your initial CMS requirements?

To save you having to independently think of everything you may desire from a CMS, the template lists a wide range of capabilities that a CMS might provide. Any capabilities you've discovered in your research can be easily added to the template if not already included.

There are typically four types of requirement:

  • Functional: operational capabilities, look-and-feel, number of users / contracts handled. Provided by contract management specialists, stakeholders
  • Technical: system architecture, database, delivery model, integrations with other systems. Provided by technical staff
  • Business: goals, objectives, regulations, licensing model. Provided by contract management specialists, stakeholders, business management
  • Process: policies, procedures, practices. Provided by contract management specialists, business management

The template allows you to indicate which CMS capabilities are of interest simply by selecting an importance rating. You should focus on:

  • The must-haves: capabilities critical for resolving your issues and allowing you to undertake contract management the way you want to
  • The should-haves: very useful capabilities, the lack of which might make things more difficult than they need to be
  • The nice-to-haves: useful capabilities that you can live without if necessary

Hint: don't try to 'boil the ocean' here. A huge wish-list of capabilities can make the already hard job of selecting the right CMS even harder.

As you start to see product demonstrations, you’ll likely see a range of features that you hadn’t considered previously. It’s important that you consider these in relation to your requirements and only opt to pay for them if they are genuinely solving your business problems.

Remember also that all your stakeholders need to be involved in this. They may have requirements particular to their role that aren't readily apparent to other people.

Failure to capture such requirements may have an adverse effect on the widespread adoption of the selected CMS and its future success.

7. Validate your initial CMS requirements

Usually, more than one person will be involved in selecting and ranking the initial CMS requirements. Different people often think in different ways, and have differing knowledge, perspectives and backgrounds that influence their choices.

It makes good sense to review the complete list of requirements and rankings from top to bottom, a sort of sanity / quality check on what has been proposed. This will check that everything hangs together properly, makes sense, is not overkill, and is justifiable.

One not-so-obvious but really important check concerns your organisational readiness to implement certain CMS functionality specified as a requirement. The preparatory work involved, cost and level of interruption to normal business in getting set up to use that functionality needs to be estimated.

Then a decision can be made about the likelihood of the functionality being used in the foreseeable future.

The history of software implementations is littered with examples of such 'shelfware', functionality that has been paid for – sometimes at huge cost – but either never implemented or implemented but never used.

It's best for your organisation, and potentially your career, that you don't fall into this trap and become part of that inglorious history.

Where issues are detected, commentary needs to be added to the relevant entries in the template, including any proposed changes, additions or deletions.

This commentary drives the next step.

The review should be conducted by a small team, with external assistance if required, to check things like:

  • Are the requirements supportive of business needs, technical essentials, internal resourcing realities, and so on?
  • Are the requirements realistic?
  • Are all the must-haves correctly ranked?
  • Are there too many nice-to-haves to be useful?
  • Are the requirements attainable?
  • Are there sufficient requirements to distinguish one CMS from another?
  • Are any requirements at odds with others?
  • Are any requirements duplicated but with different rankings?
  • Are any requirements overly prescriptive?
  • Do any requirements need to be explained or justified?
  • Has a need for any additional requirements been identified?

8. Restate your final CMS requirements

Any issues found in the review of the initial CMS requirements must be discussed with the stakeholders who proposed the requirements. Complete understanding of both the requirement and the issues is required.

Creativity may be required to reach a consensus on issue resolution, but where no agreement seems possible, delegation to a higher authority for a final decision may be needed.

If you really feel it's necessary, you might want to seek guidance or an objective opinion about the validity and suitability of your final CMS requirements from a thoroughly experienced third party.

The outcome of the validation process will be an approved final list of requirements in the template representing your position going forward. Update the template to show which requirements are designated as ‘final’.

What's next?

Well done! You now have a comprehensive, realistic and achievable list of what you need from a CMS.

Your next step will be to use the information contained in the CMS Requirements Template and our other contract management resources to shortlist your preferred suppliers and invite them to provide a tailored demonstration to you and your key stakeholders, showing how their solutions can fulfil your requirements.

To arrange a tailored demonstration of Gatekeeper, get in touch with us today

Rod Linsley
Rod Linsley

Rod is a seasoned Contracts Management and Procurement professional with a senior IT Management background, specialising in ICT contracts


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