What are the best practices for integrating contract management with CRM and ERP systems?

If you take a step back and consider that an ERP can be viewed in many ways in a simplistic view of say a manufacture of product and ERP can be inclusive of many components including the CRM. Initially the ERP is a system that houses your resources, assets, financials, procurement and more depending on your business. An ERP allows you to optimize and standardize the workflows and processes associated to all and optimize based on this standardization. At some point to get more function and deeper standards CRMs and CLM are pulled out and the BPM/BRM need to come out at that point as the ERP becomes modularized. The concept of ERP remains at the top of the stack. At this point Modeling the business and workflows becomes critical.

In my opinion, the integration between the CLM tool and the CRM and/or ERP tool should not be done through an external automation tool, but through APIs from the integration points within each of the 3 tools, which will make the process more efficient and error-free.

A business ability to achieve the highest level of optimization and a level of excellence in service and delivery, is fully dependent on the level of workflow and automation deployed. The difference between excellence and average is the will, effort and functional knowledge put towards the modeling of the business and its processes and the definition and control of the rules applied in the processes. A business can achieve incremental benefits by implementing a fully integrated CRM/ERP incrementally. However, the first step should be in the creation of a full model of the business and its workflows. Even if no software is used initially this allows for an incremental migration to full automation. this creates a byproduct of modeled data.

A contract says how the work will be done and how the money for that work will be managed. At the end there are legal and binding clauses. From this perspective, think of a contract as a configuration table. The contract should tell the ERP system what to do financially, it should tell the Project Management tool how to do the work. A competent CLM tool can make a written contract speak this way and convey configuration information to the systems.

To integrate contract management with CRM and ERP systems: 1. Define clear roles for each team. 2. Use a centralized repository. 3. Establish a standard contract lifecycle. 4. Use an automated system. 5. Provide employee training. 6. Use standard template’s. 7. Monitor contract performance. 8. Regularly review and update processes for efficiency and effectiveness.

There are many integration tools built specifically for Contract Lifecyle management from paid to open source. If the steps have not been taken during your previous integration of CRM / ERP systems to fully model the busienss and workflows that should be strongly considered at this time. As well if the business is not utilizing a BPM/ BRM that should be strongly considered as without that the CLM will most likley begin to take on the characteristics of those functions. A CLM is not a BPM / BRM just as a CLM is not a CRM / ERP. Depending on the intent of deployment in that if you just want the contracts centrally stored and versioned then less is needed However if audit level contract use is sought, workflow and rules models are required.

Its important to decide to what degree and what functions you intend to take advantage of from a CLM. As indicated in previously identifying the types of contracts to be managed is important. examples would be Customer Contracts, both Resi and Commercial Construction Contracts, Installation contracts, Franchise agreements, Equipment provider contracts, Plant interconnection agreements, SB128 and GO95, Pole use agreements and many more. Adding attributes to the contracts such as Opex, Capex, some contracts may be specific to GL Entity, as well as associated to specific Geographic areas. by embedding the rules for use and workflow you build a path to excellence and data byproduct that drives efficiency.

Today, there is a technology that facilitates or strengthens the work of CLM tools in managing a contract and protecting the rights of the parties: Blockchain. Smart contracts on the blockchain are exactly what I described in my comments above as "contracts that configure operational systems". The CLM tool can leave a lot of triggering and condition execution to smart contracts. At the same time, blockchain technology offers the most reliable data storage technology.

However, in order for this wonderful duo (CLM + Smart Contract) to work together, all parties involved must have integrated blockchain infrastructure into their systems. The biggest challenge is actually not on the technology side, but on the technology adoption side.

Whether you believe in lean managment or just the concept of standardization is the path to optimization that when done correctly leads to excellence at the highest level. The reality is depending on the size and complexity of your business you will determine how you run your business starting at controled Kaos to peak optimization. Its the resources, assets, workflows, business rules, procurment, finance and ultimately the definition or UML model of the busienss and each workflow and rules applied within those workflows as they relate to the customer, product, service and delivery with data governance that allows for feedback loops to tweak and optimize every aspect. A CLM is a critical part of a true system.