The Challenge
An energy company faced significant inefficiencies in managing its contracts, which spanned nearly 100 different systems and included thousands of agreements. The lack of a centralized contract management system resulted in:
- Delays, Compliance Risks, and Missed Renewals: Critical deadlines were often missed due to fragmented workflows and inadequate tracking.
- Inconsistent Vendor Selection: Different departments used ad-hoc processes, leading to inefficiencies and higher administrative overhead.
- Conflicting Stakeholder Priorities: Stakeholders focused on selecting a CLM platform with “shiny” features rather than addressing foundational business needs and risks.
- Fragmentation of Data: Contracts were scattered across multiple platforms, making it nearly impossible to gain visibility or standardize processes.
- Prior Failure to Implement: The legal team had previously led a vendor selection and attempted implementation but failed to see ROI. The project was eventually abandoned due to misalignment with business objectives and lack of cross-departmental buy-in.
With regulatory requirements tightening and vendor relationships at stake, the company needed a robust and scalable solution to streamline its contract management process while addressing the mistakes of the prior attempt.
The Approach
AI Advisory Group recognized the need to rebuild trust among stakeholders and prioritize alignment to ensure the new solution delivered measurable results. The strategy included:
Stakeholder Alignment: Conducted workshops and interviews with key stakeholders to identify pain points, reestablish trust, and refocus the conversation on addressing foundational business challenges rather than superficial platform features.
Vendor Assessment and Selection: Evaluated CLM platforms with a focus on scalability, ease of implementation, and ability to integrate with existing systems. Lessons learned from the failed project were integrated into the evaluation process to avoid repeating past mistakes.
Risk-Based Framework Development: Designed a standardized framework for contract management, incorporating risk analysis and lifecycle value to ensure consistency in vendor contracts.
Automation and Centralization: Implemented automated notifications for contract renewals and compliance workflows. Migrated contract data into a single system, ensuring better visibility and reduced redundancy.
The Solution
The selected CLM platform formed the foundation for a comprehensive contract management transformation. Key actions included:
- Centralized Contract Repository: Migrated thousands of contracts from nearly 100 systems into a unified platform, ensuring greater visibility and control.
- Automated Workflows: Implemented compliance checks, renewal notifications, and approval processes to reduce human error and improve efficiency.
- Stakeholder Buy-In: Delivered training and communication to address previous project concerns and align departments around measurable business outcomes.
- Streamlined Vendor Selection Process: Established consistent guidelines for evaluating vendors based on lifecycle value, risk, and alignment with company goals.
- Lessons Learned Application: Built on the failures of the prior project by involving cross-functional teams early, emphasizing practical business impact over theoretical ROI, and delivering tangible quick wins.
The Outcome
The results of the CLM transformation were significant:
- 60% Reduction in Contract Processing Time: Streamlined workflows and automation cut processing times, increasing operational efficiency.
- Improved Compliance Tracking: Centralized compliance workflows reduced regulatory risks and helped the company avoid costly fines.
- Enhanced Vendor Relationships: Transparent processes and standardized guidelines strengthened vendor partnerships and reduced miscommunications.
- Data Consolidation: Centralizing thousands of contracts into one system allowed leadership to make data-driven decisions and identify cost-saving opportunities.
- Turnaround of Failed Initiative: Successfully achieved ROI where the prior attempt had failed, restoring confidence in both the solution and leadership’s ability to deliver results.
Conclusion
This success story demonstrates the importance of focusing on people and processes during digital transformation efforts. By addressing root causes of resistance, aligning processes, and delivering tailored solutions, we not only ensured the success of the ERP implementation but also positioned the organization for future growth. The financial services company is now better equipped to navigate upcoming application changes with confidence and ensure long-term success.
