Buying contract management software (CMS) is not like buying other office software. You need to find the right match for your existing contract management practices, and that is compatible with your existing software systems.
The right CMS for your organization will solve your current contract management pain points without creating new problems.
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Process Overview
If you want to make the best investment for your company, you need a thorough purchasing process. The process needs to strike the right balance between cursory and exhaustive. If you rush the process, you increase the chances of making a mistake. But, if you take too long, you increase the chances of your overworked contract management team making a critical mistake.
Choosing the right CMS for your business is a five-step process:
- Internal Research
- External Research
- Evaluation
- Finalists
- Purchase
Skipping any step will mean making a mission-critical purchasing decision without all of the right information. Each step in this process is broken down into smaller milestones to help you efficiently make the right choice.
Internal Research
Before spending time evaluating all of the different CMS products on the market, you need to understand what your needs are. During this step, you will develop the standards you will use to evaluate the different features of the various CMS products you will come across.
The internal research phase can be broken down into these steps:
• Evaluating your current contract management process
• Understanding your biggest pain points
• Choosing between open source or proprietary software
• Create a budget
• Create a checklist and a wishlist
What is Your Current Contract Management Process?
CMS is a tool to make your contract management process more efficient. While almost every product comes with a basic set of features, it’s impossible to decide what features you need until you understand your current contract management process.
If you are hoping to radically change your contract management process with the addition of CMS, you need to design the new process before making any purchasing decisions.
CMS is not a contract management department in a box. It is a powerful tool, but it is only as effective as the users wielding it. You will want a CMS that fits into your existing workflows as much as possible.
Understanding Your Biggest Pain Points
Once you understand what your contract management process is, you need to identify the areas that are causing you the most problems.
You need as much clarity as possible on what problems you are seeking to solve with software. By identifying your biggest pain points, you will make the external research much easier. You will be able to instantly identify software that claims to solve your issues.
Common pain points include outdated manual filing systems, difficulty finding contracts and supporting documents, inability to perform advanced analytics on your contract data.
Open Source vs. Proprietary Software
The CMS world is divided into two parts. There is open-source software and proprietary software. You will need to decide early on what type of software is best for your company.
Open-source software is usually free to license. It is completely customizable. However, you will have to invest money in hiring programmers to create customization. You will also need to devote IT resources to the security and maintenance of the open-source CMS. There is no customer support for open-source software.
Many companies find that an open-source CMS is more expensive over the lifetime of the product than proprietary CMS.
CMS software is sold as a software as a service (SaaS) business model. Every proprietary product has a different set of features. It is usually less flexible than open-source software, so it is important to choose a CMS that fits your needs out of the box.
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Most CMS is cloud-based and can be hosted on the provider’s server or on yours. Proprietary software usually includes regular maintenance, security updates, and customer support.
Another key difference is that proprietary software has an onboarding process to get your company set up and running. You have to run your own onboarding with open-source software.
Set a Budget
You need to know how much money you have to spend on CMS. CMS comes in a variety of different price points. Many CMS vendors also have several different plans that they offer.
Your budget will help you screen out products that are too expensive.
Create a Checklist and a Wish List
The last step in your internal research is to make two lists. You want a checklist of essential items that the CMS must-have. These are non-negotiables. The contents of this list will come from your review of your existing contract management process and your biggest pain points.
The other list you make will be a wishlist. This will include features you would like in your CMS, but that are not deal-breakers. Your budget, your checklist, and your wishlist will help you make the right CMS choice for your organization’s unique situation.
External Research
Once you have completed your internal research, it’s time to go out into the marketplace and perform your external research. One mistake many companies make at this stage is to collect as much information as they can about as many different products as possible. This leads to analysis paralysis.
There is too much information available to sift through it all. Instead, you want to use your lists and budget to guide you so that only research CMS that meets your minimum requirements.
During the external research phase, you want to examine:
• The content of the vendor
• Key features
• Pricing options
• Onboarding
• Support & Maintenance
• Security
While many vendors will want to encourage you to demo their products, your time is better spent in this phase evaluating the products based on their online marketing materials. Once you have a smaller set of possibilities, you will want to demo the products before selecting your finalists.
Content Review
CMS vendors want to make the purchasing process as easy as possible. This is great news for you. Your first step as you research different products and providers should be to review the content the companies produce.
This content may include blog posts, webinars, white papers, and free reports. This content will help you learn about the different focuses and philosophies of the different vendors.
You will find that the content from some vendors turns you off. You can eliminate these vendors from consideration right away. You will also find that some content “speaks” to you. This is an indication that this vendor is more closely aligned to your needs and business style than others in the marketplace.
You don’t need to review all of the content every company produces. You should spend your time reviewing the content that seems the most interesting and relevant to your business.
While you cannot make a purchasing decision based solely on content, you can learn a lot about your options and what types of companies are the best fit for your business.
Features
You will want to focus on the differences in features between the different CMS providers. You also want to see what the differences are in the most common features they offer.
A features list will be most helpful in eliminating vendors from contention. Use your checklist and do not waste time on any vendors that do not offer everything on your list.
Some common features you will want to take the time to learn more about include:
• Reporting & Analytics
• Cloud-Based
• Organizational Structure
You want to make sure that the reporting and analytics function is easy to use and that the reports you need most are among the reports supported by the software. You may need to send an email to get more details about the reporting and analytics features.
Cloud-based can mean several different things. You want to know if the software is hosted on the vendor’s server or if it can also be hosted on your own servers. You will want to know about server downtime and the speed of the cloud server.
You want to make sure that the CMS you purchase will have the right organizational structure for your company. One of the most valuable features is the ability to assign searchable tags to contracts and documents. This will allow you to find contracts by company name, region, execution date, expiration date, or any criteria that are critical to your business.
Pricing Options
You can’t overlook the price. You will want to understand early on how much the CMS will cost. You want to understand what is included in the price, how the price is structured, and if there are different pricing plans.
Some pricing questions you will want to ask include:
• Is there a seat license?
• Is there a charge for additional support?
• Can you cancel at any time?
• What is the billing process?
Onboarding
CMS has a learning curve. You want to make sure that any software has a thorough onboarding process. Some onboarding questions you will need to have answered include:
• How does the onboarding process work?
• Do they provide technical help uploading the existing contracts to the CMS?
• Is additional training available?
• How long does onboarding typically take?
Support & Maintenance
If you are dealing with a proprietary CMS, you want to understand what their maintenance and support practices are. If you are looking at an open-source CMS, you will need to design your own maintenance and support system.
Most proprietary CMS vendors do not charge for maintenance, and they automatically update the software.
One of the major differentiators will be supported. You want to know if you will have access to quick solutions when you have a problem.
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Security
Every company, regardless of size, is now a potential target for hackers. If you are using open-source software, you face additional security risks. You will need to develop a plan to keep your data safe.
If you are going to purchase a proprietary CMS, you need to know how they plan on keeping your data safe. Security should include encryption and a reliable username and password system. You will also want to know if you can set different levels of permissions in the software so that users can only access data they have authorization for.
Evaluation
The next step in the process is to evaluate your favorite CMS vendors. Now is the time to collect as much information as possible about a handful of vendors.
When evaluating your options, you will want to:
• Demo the product
• Review your checklist
• Review your wishlist
• Evaluate your budget
Demo
There is no substation for actually using the software. When you are evaluating different CMS, you will want to pay attention to how easy the software is to use, how visually appealing it is, and how fast the software is.
You will also want to be evaluating the provider. Is the salesperson knowledgeable? Do they listen to your questions and concerns? Did the demo start on time? Problems with the way the demo is conducted could be red flags. You aren’t just buying the software. You are buying a relationship.
Review Checklist
At this point, you should only be looking at CMS that ticks off every box on your checklist. Now, you want to evaluate which products do the best job with each item on your checklist. Don’t settle. You want the CMS that is the best fit for your business.
Review Wish List
One way to differentiate the products is by which ones not only meet all the items on your checklist but also meet all the items on your wishlist. You want to choose CMS that thrills you, not one that just barely does the job.
Budget Evaluation
You will need to make sure you have the budget for the CMS you like the best. It’s important to make sure you fully understand all of the different pricing options. When performing the budget evaluation, you need to consider:
• Initial Costs
• Ongoing Costs
• Cost of Doing Nothing
The initial cost of open source software is often thought of as zero. But, while the license will be free, you will have to pay to have the software customized to your needs, or you will need to spend internal IT resources on the project. The initial cost for proprietary software will vary depending on the vendor and your needs.
With open-source software, the ongoing costs are usually significantly more than with proprietary software, once you price in security and maintenance. Proprietary software has predictable ongoing costs that include support, security, and maintenance.
You also need to understand what the cost of doing nothing is. You may not find the perfect CMS. But, one that is almost perfect may be far superior to your existing system when you factor in the cost of doing nothing.
Finalists
After evaluating your options, you need to select a few finalists. The finalists will go through more vetting, and you will then present the finalists to the decision-maker or to the contract management group. The purpose of this part of the process is to get some additional feedback.
The number of finalists you choose is up to you, but you most companies get the best results with two or three finalists. This makes it easier to drill down into the minutiae of each product. It also allows you to compare and contrast the products and vendors.
An essential part of the process is presenting your findings. Even if you are the decision-maker for this purchase, you should still present the finalists a few people who will need to use the software.
Making a presentation has a way of focusing your thinking. Getting feedback from other people may reveal problems with your finalists that you missed.
After the presentation you should ask yourself:
• How easy was it for you to make the case for each one?
• Which software vendor made it easiest for you to present?
• Imagine how each option being chosen would make you feel
Answering these questions will help you make a final decision or recommendation.
Purchase
The final step in the process is making the actual purchase. However, there is more to this step than just handing over the company credit card. In addition to purchasing your chosen CMS, you will also need to:
• Schedule Onboarding
• Ask All of Your Questions
• Notify Others
You want to get the onboarding process started as soon as possible. Make sure you get the first part of the onboarding scheduled as soon after the initial commitment as possible.
The moment when you are ready to hand over money is also a great time to make sure you have asked all of your questions. You will have the full attention of the sales team. Now is the best time to make sure you have resolved all of your doubts.
During the selection process, you probably were in contact with several salespeople, and you may have subscribed to numerous mailing lists. Let other vendors that you have been in close contact with know you have made a selection.
This keeps them from wasting your time, and the salespeople will also appreciate you respecting their time.
You should also unsubscribe to any CMS mailing lists that are no longer relevant.
Once you have selected the perfect CMS for your business, it’s time to enjoy the fruits of your labor. The right CMS will transform the way you think about what’s possible with contract management.
