76,000 euro spent without creating a single contract - Weagree

76,000 euro spent without creating a single contract

It happens ‘occasionally’ that we meet a customer where the money is apparently sloshing against the skirting boards (waar het geld tegen de plinten klotst). After spending a truckload of euros on licence fees and implementation efforts, many customers forget one thing.

It is somewhat shameful to tell (even for us), but we do encounter those customers where money seems to be a luxury good. At the end of this mail, I list a few use-cases of complete failures. Through the years, we have seen customers come and go after spending more than 120,000 euro:

  • without creating a single contract,
  • without using Weagree’s in-app DMS,
  • without registering a signed contract in the CLM,
  • bypassing the automated approval workflows.

Some customers sustain such a money-outflow several years. One customer left us with an unpaid invoice of 68,000 euro.

Customer onboarding

A customer onboarding track is roughly as follows:

  1. We agree. We agree on licence scope, implementation track, complete the IT security assessment: the incoming customer has their priorities set, enters into a licence (our terms and conditions are exceptionally reasonable, so usually contracting is a matter of minutes)
  2. We start. The customer enthusiastically starts their innovation track: (i) selecting the contracts for automation (often following our recommended selection criteria), (ii) upgrading the model contracts (drafting quality, adequacy, Q&A-parameters), (iii) we automate the contracts (create a questionnaire based on inline instructions, square brackets and other input).
  3. We integrate. While automating contracts, we would also set up integrations with the customer’s IT landscape. This is largely a parallel track that can be undertaken at any time. Usually, it is a straightforward exercise: single sign-on, DocuSign, and possibly other API-integrations (SharePoint, Salesforce, Dynamics, SAP, etc.). Since a week, it may include connecting to the customer’s instance of ChatGPT 4.0.
  4. We deliver. We deliver the automated contracts, may demo how it works, give instructions for testing (in case of complex templates), and follow up on the initial delivery to make sure all is fully functional. Upon a first round of feedback by the key involved legal counsel, the community of aimed-at end-users would provide their feedback and we incorporate this in the templates and questionnaires. This follow-up would overlap largely with the template-testing, which should create a natural flow into adopting contract automation.

The above onboarding track is of course tailored to the customer’s particularities. Also, integrating with IT applications can often be postponed (or accomplished much quicker). The delivery and the testing of templates are usually smoothly flowing into each other (additional contracts may be automated, in the spirit of automating all)…

…That is a good thing unless you forget the following.

LinkedIn 65000 motivating each other change management plan

Timing and throughput. Even a large implementation of automating some 30 model contracts may be completed in one or two months. Invariably, the implementation’s throughput time is heavily influenced by the customer:

  • handing over their (upgraded) model contracts, and
  • testing the automated contracts.

Roll-out to end-users is use-case dependent, and planned such that a maximum of effectiveness is achieved, but depending on type of contract, and nature or relevance of the business’ contracting processes.

The inhouse counsel does nothing

It is hard to believe, but many in-house legal counsel then feel that whenever a contract request comes in, there are a thousand of reasons to revert to their traditional course of dealing: pick last-week’s example, spend many hours on tailoring it for the particular context, and do anything old-school in the light of time-pressure or convenience.

It is quite a challenge to get a legal counsel to resist their emotional feelings of convenience, to prioritise automation over convenience, to show that much time is lost later in the contracting process. What might feel efficient may well be more time-consuming.

Licence years 2 and 3

After one year, the head of legal excuses him/herself: it has been a busy year. There were one or two projects that inadvertently required attention. Promise: let’s continue the licence and take the change management in the forthcoming year. Licence continued unchanged.

After the second licence year, there are probably also excuses: it has again been busy, only a few legal appear to have adopted (part of) contract automation in their daily practice. The others have their excuses for not automating their contracts. “Although they are very much willing to, of course.”

CLM implementation

Along with received feedback, we can implement CLM (CLM contract data sheets, defined on the basis of each underlying automated contract type). This configuration is a matter of (30-45) minutes, not days. Registering, uploading or migrating legacy signed contracts can start any time.

As ‘CLM’ is still largely considered to be ‘archiving’ (and contract management in its traditional setup as a dusty closet not considered a lively, day-to-day affair), it is also not anything of greatest priority.

It is a pity if the implementation of CLM is considered that old-way, because from the outset, it will never become possible to lifting contracts to the next level of contract lifecycle management, preventing revenue leakage or contract-portfolio management.

Where it fails

  • Lack of leadership
  • Lack of growth mindset
  • Focus on problems (not on the bright spots)
  • Lack of communication
  • No anchoring of automation into day-to-day processes
  • Prioritising urgency over importance (leadership fails to create time and protect team members against internal clients)
  • No anchoring of automation into weekly meetings
  • Failing to monitor adoption
  • Oversizing the initial implementation
  • Keeping the initial implementation too small
  • Not implementing end-to-end features

Leadership over an implementation and change management track is crucial for success. Leadership means prioritisation: that despite urgent day-to-day affairs, team members are freed (from daily affairs and complaints), implementation milestones are communicated, early ‘successes’ celebrated, and a clear vision on the destination of legal support is recognisably executed.

List of failures

The failures can be immense. (Like the successes can be surprising and game-changing.) We have seen the following:

Contract automation List of failures 2 change management plan

Needless to say, that we analyse these cases intensively, at least internally, but normally also with the customer. We have an abundance of experience with (extraordinarily) successful technical and functional implementations, and we don’t sheer away from our failures, but…

The reason for failure is almost invariably and entirely in the (absence or insufficiency of) change management efforts.

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