The 4 Cornerstones of Effective Contract Operations

In contract operations, achieving excellence requires an approach that integrates tools, processes, and—most importantly—people and expertise. While technology solutions like Contract Lifecycle Management (CLM) software play a critical role in streamlining contract operations, they are not sufficient on their own. The foundation of effective contract operations is built on four key cornerstones: Negotiation Playbooks, Document & Data Management, Change Management, and CLM Administration. Here, we explore these cornerstones and gain an understanding of why a human-in-the-loop with contract expertise is absolutely necessary for successful contract operations. 

Negotiation Playbooks

Negotiation playbooks are essential for successful contract operations. They provide a structured approach to negotiations, ensuring consistency and clarity. However, creating and maintaining these playbooks requires expertise. It involves understanding legal and business nuances, capturing institutional knowledge, and regularly updating the playbooks to reflect changes in laws, regulations, and business practices. While AI can assist in executing negotiations, it cannot replace the human judgment and experience needed to create comprehensive playbooks that align with the business guidance.

Document & Data Management

Effective document and data management is another cornerstone of contract operations. Trustworthy data is the backbone of informed decision-making, risk management, and compliance. Achieving this ideal state requires skilled individuals who can meticulously manage and curate the data. They must understand the context of each document, ensure accuracy, and maintain data integrity. Software can facilitate data management, but without human oversight, the quality and reliability of the data cannot be guaranteed.

Change Management

Change management is critical to the successful implementation and adoption of new processes and technologies within contract operations. Effective change management involves strategic planning, clear communication, and ongoing support to ensure that all stakeholders are on board. This process is inherently human-centric. People are needed to identify potential resistance, address concerns, provide training, and foster a culture of continuous improvement. Software tools can support change management efforts, but they cannot replace the human element required to manage and drive change.

CLM Administration

CLM administration is a foundational element of contract operations. It involves configuring and maintaining the CLM system to align with the organization’s needs. This includes managing user access, setting up workflows, and ensuring that the system is continuously updated to reflect changes in organizational structure and processes. Skilled administrators are essential for tailoring the CLM system to the specific requirements of the business, addressing issues, and optimizing performance. While CLM software provides the tools necessary for administration, the expertise of human administrators is crucial for effective implementation and ongoing management.

There is no denying that software solutions are a big part of modern contract operations; however, they are not a total fix. The four cornerstones of effective contract operations—Negotiation Playbooks, Document & Data Management, Change Management, and CLM Administration—each require the involvement of people and their expertise to realize their full potential. Organizations must invest in skilled professionals - whether internal or through a managed service like LegalSifter’s Contract Control Program -  who can leverage these tools, provide critical insights, and ensure that the contract operations framework is robust, reliable, and adaptable to change. Only through this synergy of technology, people and expertise can businesses achieve excellence in contract operations.