Why don’t more providers offer digital contracting and #CLM as an outcome-based managed service?
In digital contracting and contract lifecycle management, companies often have to navigate a fragmented landscape.
A typical route involves selecting a CLM system from an overwhelming array of options and then engaging a separate systems integrator to implement it.
This approach complicates procurement and at the same time increases the likelihood of project failure.
Is there a better way?
Instead of shopping for technology and finding a partner to integrate it, you could define your contracting outcomes—e.g. contract cycle times, customer satisfaction, and compliance metrics—and engage a single provider to manage everything.
This provider would take responsibility for technology selection, procurement, implementation, adoption, ongoing support, and continuous development, all while being measured against predefined outcome metrics.
This approach—an outcome-based managed service—has the potential to radically simplify the CLM landscape.
So why isn’t it more prevalent?
Large Alternative Legal Service Providers (ALSPs) and Systems Integrators (SIs) manage hundreds of millions of dollars in CLM implementations and contract-related managed services each year.
These organizations have the scale, expertise, and resources to offer a full-spectrum solution. They understand the intricacies of legal operations, contract management, and technology implementation.
Yet, few are taking the leap to offer a holistic, outcome-based managed service model.
The problem lies in the associated complexity and risk.
An outcome-based model shifts the risk from the client to the provider. It requires technical proficiency and a deep understanding of the client’s business goals and contractual objectives.
Providers must align their capabilities to deliver on these outcomes consistently, which demands a level of maturity and integration that many are hesitant to embrace.
Despite these challenges, the potential benefits are significant. For clients, it means fewer points of failure, reduced administrative burden, and a single accountability partner.
For providers, it offers an opportunity to deepen client relationships, differentiate from the competition, and create a more sustainable revenue model.
As the market for digital contracting and CLM continues to grow, it’s time for more providers to consider the shift.
By embracing an outcome-based managed service approach, they can turn a complex, high-risk process into a seamless, value-driven experience for their clients.
Are we ready to rethink the way we approach CLM?