Contract Lifecycle Management (CLM) solutions have emerged as an essential tool for managing contracts, reducing legal risks, and improving overall compliance. As organizations rush to implement CLM systems, many opt for a piecemeal approach — deploying the solution in fragments instead of phased releases. While this method may seem practical or cost-effective in the short term, the risks and inefficiencies that arise from a fragmented CLM deployment can lead to “CLM inertia” where organizations pause indefinitely in their CLM journey and get stuck with an uninspiring, low-value “electronic file cabinet” for contracts. In a recent survey by Forrester, nearly 50% of companies fail to reach full CLM maturity, potentially losing as much as an 8.2% drop to their bottom line.

The Appeal of a Fragmented Approach

A fragmented CLM deployment might appear to offer advantages:

1. Cost savings: Organizations with limited budgets may implement the system one contract type or workflow at a time, believing this approach will reduce initial costs.

2. Minimized disruption: A piecemeal implementation might seem like a way to avoid disrupting the entire organization at once, allowing business-as-usual to continue.

3. Quick wins: Companies may see incremental improvements in contracts management and aim to build on these small successes over time.

While these perceived benefits are understandable, they mask four key risks which can have long-term adverse consequences, reducing the ability to achieve the full benefits of implementing a CLM system.

Risk #1: Inconsistent Processes and Workflows

One of the core advantages of a CLM system is its ability to standardize contracts management across the organization. By centralizing contracts and automating workflows, CLMs can ensure that contracts are drafted, reviewed, and approved according to uniform guidelines. However, when a CLM is implemented piecemeal, different departments or regions may adopt different processes, leading to inconsistent workflows.

For example, if the procurement department uses a CLM system while the legal team still relies on manual processes, this lack of cohesion will result in lost time, miscommunication, and inefficiencies. Inconsistent processes across departments defeat the purpose of CLM’s core function — to create a single source of truth for contracts management.

Over time, these inconsistencies can cause confusion, and the organization may struggle to achieve the standardization needed for optimal performance. The longer this fragmented system persists, the harder it becomes to align everyone to the same processes.

Risk #2: Siloed Data and Lack of Visibility

CLM systems provide organizations with visibility into their contract lifecycle, from creation to execution and renewal. This insight is crucial for identifying opportunities to improve efficiency, track performance metrics, and stay compliant with regulations. When a CLM is deployed in a fragmented manner, data is often siloed in individual departments or divisions.

This lack of visibility prevents organizations from gaining a complete view of their contractual obligations. Siloed data also increases the likelihood of missed deadlines, overlooked contracts renewals, or regulatory non-compliance, as teams may not have access to crucial information. Fragmented CLM deployment undermines one of the primary goals of CLM: creating transparency and visibility across the entire contract lifecycle.

Risk #3: Fragmented User Adoption and Training

Implementing a CLM system successfully requires not just the right technology but also a comprehensive approach to user training and adoption. When deployment occurs piecemeal, training and change management efforts will also be disjointed. Early adopters may receive extensive training, while employees who come online later may not receive the same level of support.

As a result, user adoption becomes uneven, with some teams fully leveraging the CLM system’s capabilities while others remain stuck in outdated processes. Incomplete user adoption can lead to resistance across the organization, making it even more difficult to integrate the system fully in the future. If users are not aligned or adequately trained, the full benefits of CLM will never be realized.

Risk #4: Hidden Costs

One of the primary misperceptions of a fragmented deployment is that it is more cost-effective than a broader-scale implementation. While the initial investment might seem lower, the long-term costs associated with a fragmented deployment can quickly escalate.

For instance, organizations may need to invest in additional customizations, integrations, and training efforts as each department comes online, including multiple test cycles. The time spent resolving technical issues and addressing inconsistencies can also increase operational costs. Moreover, inefficiencies caused by incomplete adoption can hinder the organization’s ability to fully leverage the benefits of CLM, reducing the return on investment.

The Solution: A Comprehensive, Data-Driven CLM Deployment Strategy

To avoid the pitfalls of fragmented deployment, organizations should adopt a “plan big, start smaller” strategy that prioritizes integration, standardization, and user adoption from the outset.  The strategy needs to provide clear goals and metrics that will drive momentum through the entire CLM program. This requires the following:

1. Centralized planning: A clear, organization-wide roadmap that aligns all departments and regions on the CLM implementation process over time.

2. Cross-functional involvement: Engaging key stakeholders across the organization ensures that workflows, processes, and data are standardized.

3. Training and Change Management: A user adoption strategy is critical to ensuring that stakeholders across all departments are equipped to use the CLM system effectively.

4. Prioritizing data and integration: Ensuring that the CLM system contains reliable contracts metadata that integrates seamlessly with existing enterprise systems to avoid data silos and maintain operational efficiency.

5. Transparent and measurable KPIs: Program success can be determined when business objectives of each stakeholder group are understood, and progress is measured. Tracking contracts throughput, revenue growth, renewal rates, compliance, and overall process efficiency will help increase user adoption and maintain executive sponsorship throughout the process.

The long-term risks and inefficiencies of a fragmented approach far outweigh any immediate benefits. Inconsistent processes, siloed data, and technical challenges can severely limit the system’s potential and increase operational costs. By taking a comprehensive approach to CLM deployment, organizations can realize the full value of their investment, achieving greater efficiency, compliance, and visibility across the entire contract lifecycle.

Learn more about Epiq’s CLM implementation and integration solutions.