Building the Business Case for a CLM Solution: A Guide for In-House Legal Teams

When it comes to implementing a new Contract Lifecycle Management (CLM) solution, one of the biggest challenges in-house legal teams face is securing buy-in from leadership. While the benefits of CLM are clear to those managing contracts daily, convincing decision-makers to invest in a new system requires a well-crafted business case.

At IRIS, we’ve partnered with many legal teams to help them articulate the value of a Contract Lifecycle Management solution, translating operational benefits into strategic advantages that resonate with executives. Here’s a guide on how to build a compelling business case for adopting a CLM solution within your organization.

Before you can advocate for a CLM solution, you need to clearly identify the challenges your team is facing with your current contract management process. These might include inefficiencies, compliance risks, or lack of visibility into contract performance. It’s important to quantify these pain points wherever possible. For example, how much time is your team spending on manual contract processes? How often are compliance issues arising due to missed deadlines or lost documents?

We’ve seen that the most compelling business cases start with a clear understanding of the current state. By documenting the inefficiencies and risks in your existing process, you create a baseline that highlights the need for improvement. This sets the stage for demonstrating how a CLM solution can address these specific issues, making the case more relatable and urgent to decision-makers.

Not all CLM solutions are created equal, and it’s important to find the one that best fits your organization’s needs. Start by researching different CLM tools, focusing on features that address your identified pain points. Consider factors such as integration capabilities, user-friendliness, scalability, and security. Reach out to vendors for demos and trial periods to see how the software works in practice.

When helping clients evaluate CLM solutions, we recommend creating a feature checklist based on your team’s specific needs. This helps in comparing different tools side-by-side and ensures that the selected solution aligns with your organization’s goals. Additionally, gathering feedback from other departments, such as IT and finance, can help in assessing the solution’s broader impact and feasibility.

A successful CLM implementation doesn’t just benefit the legal team—it can streamline processes across the organization. To build a strong business case, it’s important to engage stakeholders from other departments early in the process. This includes finance, procurement, sales, and IT. By gathering their input and addressing their concerns, you can build a case that highlights the cross-functional benefits of a CLM solution.

In our experience, involving stakeholders early in the process helps build broad-based support for the project. When other departments see how a CLM solution can simplify their workflows—whether it’s faster contract approvals for sales or better compliance tracking for finance—they’re more likely to back the initiative. This collaborative approach also helps in identifying potential roadblocks and ensures that the solution chosen meets the needs of all users.

One of the most critical components of your business case is the cost-benefit analysis. This involves comparing the costs of implementing a CLM solution—including software licensing, training, and integration—with the potential benefits, such as time savings, reduced compliance risks, and improved contract performance. Be sure to factor in both direct and indirect benefits, and try to quantify them as much as possible.

When helping legal teams build their business cases, we often use real-world scenarios to project potential ROI. For example, if your team currently spends 10 hours per week on manual contract tracking, calculate the time savings from automating this task and translate that into financial terms. Additionally, consider the cost of compliance failures, such as missed deadlines or penalties, and how a CLM solution can mitigate these risks. A clear, data-driven ROI projection can make a powerful argument for the investment.

With your research, stakeholder input, and cost-benefit analysis in hand, it’s time to present your business case. Tailor your presentation to your audience, focusing on the strategic benefits that matter most to them. For executives, this might be the ROI and how a CLM solution supports broader business goals. For IT, it might be about integration and security features. Make sure to address any potential objections and provide clear, actionable recommendations.

We’ve found that the most effective presentations are those that tell a story. Start with the challenges your team is facing, move on to how a CLM solution can solve these issues, and end with the benefits—both operational and strategic—that the solution will bring. Use visuals like charts and graphs to make your points clear and compelling. And don’t forget to leave room for questions and discussions; this not only shows your preparedness but also engages your audience in the decision-making process.

Building a business case for a CLM solution is about more than just highlighting the features of a tool—it’s about demonstrating how the solution aligns with your organization’s strategic goals and delivers measurable value. By identifying your pain points, researching solutions, engaging stakeholders, and presenting a clear ROI, you can make a compelling argument that resonates with decision-makers.

At IRIS, we’re here to support you every step of the way. We’ve helped numerous legal teams successfully advocate for and implement CLM solutions that have transformed their operations. If you’re ready to take the next step in your contract management journey, let’s talk about how we can help you build a strong business case for a CLM solution.