Why Coupa?Watch Now
Coupa is a company of talkers, passionate about sharing tips, tricks and advice for improving finance and procurement and saving companies of all sizes time and money. But we’re not the only people with opinions and ideas. We’d love to hear from you so join the conversation!
- February 03, 2020
- Mat Calabro
Companies make enormous investments in CRM and enterprise systems. So, it’s only natural that they would look to stretch their investment by using those systems for as many functions as possible. The more you use it, the higher the ROI.
Salesforce CRM & Contract Lifecycle Management
For example, CRM system Salesforce is used by more than 100,000 companies for managing leads and contacts. It can be essential for administrators and marketing professionals. But despite its popularity and the fact that it’s often used for contract management, when you closely examine how the platform works and its intended purpose, it’s easy to see that it’s not ideal for contract lifecycle management.
Why Salesforce falls short
Contracts are not static documents. Most require management, as key provisions of the contracts need monitoring to ensure that both parties are adhering to their end of the agreement. Without a robust contract lifecycle management solution in place, it’s possible that key milestones will be missed, and the company could fall out of compliance.
Using Salesforce for some contract management capabilities may work for those companies that need only base-level contract management to support a straightforward and limited contract portfolio. If, however, you require robust contract lifecycle management functionalities (such as negotiation tools, complex data analysis and reporting, and total integration with existing ERP systems) or if you’re planning to scale your company, you’ll have to look beyond the Salesforce contracts management software. According to many companies we’ve spoken with, Salesforce often proves unable to address a high volume or complex contract needs.
Although Salesforce may be adequate for storing sales contracts, your contract portfolio contains a wide variety of other contracts that contain a wealth of sensitive information, which, you more likely do not want every salesperson to be able to access, especially given that a growing number of data breaches begin internally. Using Salesforce as your sales contract database often requires you to use another, more secure database for sensitive contracts in order to comply with certain client obligations, industry regulations and best practices regarding delicate material.
Unfortunately, dividing your contract management database by levels of access and security inevitably leads to oversights and complications, not the least of which is your inability to holistically track and analyze your contracts. In other words, conducting an analysis of your contracts to evaluate the level of risk in your portfolio and the value of your contracts becomes virtually impossible without spending a great deal of time compiling and massaging the data.
Increasing legal’s workload
Salesforce was designed to be a customer relationship manager. Contract management was added as an afterthought, but this creates a confusing and inconsistent space in which to do anything not related to CRM. Expecting Salesforce to offer robust contract management capabilities is unrealistic. Therefore, most attorneys don’t feel as comfortable as salespeople do working within the platform as a contract lifecycle management tool.
Considering that in many companies, contracting is viewed as “lawyer’s work,” it’s important to consider their needs and requirements when selecting a contract management solution and initially considering what Salesforce is used for. Lawyers like working with their preferred programs, whether that be Microsoft Word or some other application. Companies using Salesforce for contract management complain of poor adoption by attorneys, who often continue to use their own tools regardless of company policy. Poor adoption leads to inconsistency, inadequate knowledge sharing and, potentially, rogue contracting, leaving you exposed to a multitude of unknown risks. Above all, inefficient processes create delays and bottlenecks in the contract request process since your attorneys are effectively “reinventing the wheel” every time a contract needs to be drafted.
The other option for companies using Salesforce for contract management is integrated apps. Some CM providers, such as SpringCM and Apttus, bring improved contract management capabilities to Salesforce. However, these solutions are built directly into Salesforce.com, thus requiring users to pay for Salesforce licenses, which are both expensive and limiting. The top tier Salesforce plan costs $3,600 per year per user – a price tag that can easily get close to seven figures in a large organization.
Even without a top-tier subscription to Salesforce, though, using the platform for contract management can still be expensive – and complex. Salesforce currently offers more than 1700 different applications on the platform for managing everything from IT and finance to human resources. Ostensibly Salesforce can do it all, but with 1,700 different applications, how can a company determine which ones to use – and ensure everyone is using the same ones? The potential for confusion, not to mention noncompliance, missing information, and a host of other issues is high.
Finally, not only is the cost of Salesforce’s contracts management tool prohibitive to many companies, the very idea of being inextricably tied to Salesforce in this way can turn into a major problem down the road when Salesforce contracts management capabilities prove unable to scale alongside your company.
Indeed, although their contract management capabilities have improved somewhat in recent years, Salesforce is far from state-of-the-art. The platform lacks meaningfully robust workflow, reporting, and search functionalities, not to mention the ability to assess risk and help your teams make better decisions. And in the event that you want to grow your business during an IPO, merger and acquisition, or new partnership, gathering the necessary contracts for review is going to be a less organized process that takes more time than it should.
So what should companies that use Salesforce do?
The best solution for many companies is to keep the salespeople where they want to be (Salesforce) and the lawyers where they want to be (a dedicated, lawyer-centric CLM system). With Coupa, sales can work in Salesforce while legal can keep using Word (or whatever program they’re comfortable with) to draft and negotiate contracts.
Coupa allows documents to be stored in the cloud or on-premises and integrates fully with Salesforce without requiring users to subscribe, improving security and saving money. We offer a more robust permission protection system so that access to your sensitive documents remains restricted. A solution with advanced contract lifecycle management capabilities is the only option for companies with ever-growing and highly complex contract portfolios, and ours is second to none.
To learn more about how Coupa may just be the best solution for your CLM needs, contact us today.
Mat Calabro is a Product Marketing Manager at Coupa, specializing in Coupa's CLM and S2C solutions. Mat lives in the Greater Boston area with his wife and son.