Your business needs contract management software. The only problem? Not everyone sees the same writing on the wall as you do. The solution? Building a business case stronger than the loudest naysayer’s opinion.
Oh, what’s that Karen? The company can’t afford it? Check out this business case I built for contract management software. From where I’m sitting, the company can’t afford not to (truth bombs can hurt, can’t they Karen?).
Listen, every business relies (in one way or another) on contracts to function. And for every business that’s sick and tired of managing whatever archaic (and likely not secure) contract management system is currently in place, there’s a slew of reasons why dedicated software is the best solution.
And your best chance of getting decision-makers on board with the expense? Building a business case so rock solid that even the Hulk can’t punch holes in it. This means gathering data, insights, and analysis — and using it to tell a compelling story your stakeholders will be rooting for.
TL;DR: Key Takeaways
- Before building your business case, take stock of the reasons why the software is needed, gather compelling details to support those reasons, and identify different ways in which the software will benefit your company.
- When building your business case, position the software as an investment while emphasizing time savings, cost savings, security, and operational efficiencies.
So, what do you say? Are you ready to do this?
But First, Take Inventory
Your number one goal here is to get more yeas than nays. So, before actually building out your business case, take stock of the following:
- Reasons Why You Need Software: The main goal of the business case is to demonstrate why the software is needed. If you can’t show how an investment in contract management software will benefit the business, forget about it. Without clear-cut benefits, you’re setting yourself up for a resounding “No!”.
- Compelling Details to Support What You’re Asking For: This is where you lay it all on the line. The total cost of the investment, what results can be expected from it, and a detailed description of what the software will do. This isn’t the time for fluff. Be direct and to the point.
- Ways the Software Will Help: You know how it will help, but do they? If finding contracts is a pain point, hit on the importance of organization. If security is an issue, let them know how the software will solve for it.
5 Steps to Build a Business Case for Contract Management Software
You’ve got your why, what, and how. Now it’s time to build that business case! Here’s how to do it in five simple steps.
Step 1. Prove Time Savings
Time is money. And when your business case shows that a software investment would save employees a lot of time, well that means dollar signs for the bottom line. The only thing you have to do? Calculate how much time your team would save using the software versus current methods.
You can do this by summarizing all the current contracts your company is managing—including their total value—along with how much time it would take an employee to maintain them. We’re talking about tracking everything from contract obligations to compliance-related milestones, renewals, and more. Essentially, if it involves spending time on anything contract-related, include it! Then, compare these findings to the number of hours it would take the same amount of contracts to be handled via software.
This exercise might even get the wheels turning on how streamlining this process can benefit the company in other ways. For example, using contract management software can give your company the opportunity to collaborate on contracts with vendors and other third parties in real-time, regardless of their location, leading to even bigger time savings.
Now that’s something even Karen can get behind.
Step 2. Show Them the Money!
Or at least, show them how they can save it. Don’t assume time savings alone will compel company leaders to approve a software purchase. Just like time savings, a solid return-on-investment (ROI) will be one of the most important parts of your business case.
Poor contract management can lead to cost overruns. It’s important to understand—and be able to explain—how contract management software can help.
While you need to tailor your business case for the specific software you want buy-in on, good contract management software should be able to offer the following:
- Intuitive search and reporting to save on administrative costs
- Intelligent alerts so key contract dates aren’t missed and associated money isn’t lost
- Active security and data protection to keep your company protected against costly legal fees
- Fast and easy initial implementation to save time, money, and let’s be honest—a whole lot of headache
Small, medium, or large: whatever size your company is right now, contract management software can help free up your team’s time and financial resources. Taking the time to demonstrate both points in your business case will help justify the expense of the software and get your leadership team on board.
Step 3. Be Clear It's Secure
Contracts are legally binding. In other words, these documents are important. And keeping them safe is arguably the most important. In your business case, be sure to outline the security-related benefits that contract management software brings to the conference table.
For example, with a cloud-based contract management system, your company’s legal contracts will be maintained on off-site servers that are highly protected by expert-level security. If that isn’t enough, be sure to detail the benefits of a digital storage repository. Like how having full control over sharing and roles makes it easy to go back and see who accessed or edited a document at any time. Eliminating questions and back-and-forth investigations of who made a particular change to a contract and why.
Storing contracts in the cloud also eliminates the paper trail that results from physical contracts being passed around or mailed for review and approval. This helps ensure confidential contracts stay confidential.
Step 4. Bundle All the Business Benefits
Contract management software is a powerful tool. Cost savings, time savings, and security are three big benefits, but don’t shy away from including the not-so-big ones in your business case.
For starters, operational trends insights. Who is doing what, when are they doing it, and why are they doing it?
- Is organizing contracts and following up on aging accounts taking someone away from their main job? If it is and they are, include it in your business case along with how the software you’re advocating for can help.
- Are half of your contracts stored in a file cabinet somewhere and the other half on a computer drive? If they are, add it in! A messy trail of legal paperwork can lead to a whole lot of problems for your company—and we aren’t talking headaches.
- Does sharing contracts with your team and key players feel like a game of childhood telephone? If it does, point to the sharing simplicity good contract management software includes.
Bottom line? Wherever possible, help your company leaders see how green the grass (and money) is on the other side. Talk about a current issue, present the solution, and voila! You’ll have an even stronger business case and your company will be better for it.
Step 5. Give It to Them Straight
The same software that you know will benefit your company is also going to cost them. You know that going in, and you can bet the leadership team knows it even more.
To make sure your business case for contract management software isn’t just rock-solid, but Hulk-proof, be as clear-cut as possible about the cost. And while we’re on the subject, remember that word choice matters. Rather than outlining the “cost” of the software, position it as an “investment.”
Why? Because investments get money back. Yes, the software’s initial sticker price may be a shock, but outlining the many benefits and cost savings to the company will soften the blow while keeping minds open and receptive to your solution.
Don’t shy away from talking through the investment cost in your business case. Leaving it out can signal unnecessary red flags and questions you might not be ready or able to answer.
By incorporating all of these elements, your business case will be clear, thorough, and convincing. Be sure to take your time and if you can, have someone review it before presenting to the decision-makers at your company. Good luck!