Three Unexpected Topics That Should Make You Think of Contract Management
Last week I attended the IACCM/Exari webinar on ‘Converting Your CEO into a Contract Management Champion in 3 Simple Steps.’ I came away with three topics, but they weren’t the ones I was expecting to get. Rather than ways to sell the CEO on contract management, I was surprised by the broad range of connections back to contract management that were offered up by Exari’s Founder and Chief Product Officer Jamie Wodetzki.
Sure, we all know that data breaches and related security issues are a growing concern for corporations and that they can lead to severe brand or reputational damage - not to mention revenue loss and operational downtime. But Wodetzki also made the point that they are a contract management issue as well. In the face of such a breach, relevant contracts need to be looked at for the coverage or protection they should have provided or what concessions are now due to customers as a result of the breach.
When a company’s commercial model changes (think compensation triggers and revenue recognition standards) the contracts put in place to carry them out should change as well. Although this may seem blatantly obvious, it could be a significant source of disconnect between the executive team and investments in a contract management program. If they don’t see the connection between contract management and the revenue model, it will be a hard sell to win them over on contract management anywhere else.
As Wodetzki pointed out, getting the CEO to be a champion of your contract management program requires a ‘burning platform’, which requires them to act in pursuit of return or in avoidance of damages. That being said, not all fires are the same. It isn’t just a matter of articulating the associated pain point, but correctly identifying where that pain point will hurt the organization. Operations remains the primary focus for the executive team in most companies, so tying the contract pain point to operations – even if the same problem exists elsewhere in the organization – will elevate the problem and hopefully motivate the desired level of enthusiasm from your CEO.