Should You Use Your CRM For Contract Management?


We’re sometimes asked by in-house teams whether they should use their CRM for contract management. We’ll use Salesforce as the focal point for this article because it is generally recognised as a leading CRM. Salesforce does have an in-built contract module which delivers basic functionality. For some companies, this might be enough.

Let’s consider, however, some examples where more sophisticated functionality may be required:
– There is a legislative change requiring a review of all your HR contracts
– Your company is affected by an event such as a pandemic, requiring you to examine all your force majeure clauses
– You’re faced with M&A activity requiring an understanding of change of control clauses

Those are just three out of dozens of possible examples. From a legal and risk perspective, a CRM’s in-built contract management will often not be able to perform these types of tasks.

Another common legal function that may require more sophisticated functionality is contract drafting. As any lawyer would appreciate, drafting a contract is more nuanced than simply opening up an editor and typing clauses. One of the important functions of the contract is to appropriately allocate risk between the parties. Suppose you’re negotiating an IT contract and your counterparty asks for a limitation of liability carveout for a particular event. It would be helpful to be able to instantly search for limitation of liability clauses in similar IT contracts to benchmark market practice for the purposes of negotiation. A CRM’s in-built contract management system will often have limited capabilities in this regard.

Your legal and procurement teams shouldn’t be in Salesforce

Salesforce became a leading CRM in part by providing a lot of functionality to support a wide variety of use cases. There are, however, some drawbacks, and one of them is complexity. Salesforce implementations are not trivial, which is why many companies purchase the licence and then separately purchase professional services for implementation. I’ve worked as both a software engineer and a lawyer, and I still have difficulties with some of the nuances of Salesforce. For legal and procurement teams, these challenges would likely be magnified which ultimately risks leading to frustration and wasted time.

Conversely, your sales team doesn’t want to be in a contracting platform designed for legal and procurement teams. That is why your contracting platform should, ideally, offer a seamless integration with Salesforce. If it takes more than a click or two from Salesforce to generate a contract, there’s likely too much friction in the process which could be a barrier to adoption.

Where Does Configure, Price, Quote (CPQ) fit in?

Configure, Price, Quote is becoming an important part of the sales cycle. CPQ allows companies to speed up their quoting process as products become more complicated. The Salesforce CPQ is highly regarded, but as with many things in the Salesforce ecosystem, it’s a customer-centric tool designed to optimise the quote-to-cash process.

As is suggested in its name, however, Configure, Price Quote is distinct from the other critical part of the contracting process: source-to-pay. What if, for example, you need to collect security certifications such as ISO 27001 from your IT vendors? Or suppose you require suppliers to submit anti-bribery, or modern anti-slavery documentation? How about the basic use case of setting a reminder for when an insurance policy is due on a contract? These are not tasks where CPQ systems generally assist.

Salesforce itself recognises the distinction between Configure, Price, Quote and Contract Lifecycle Management (CLM):

Guide To Contract Lifecycle Management (CLM)

There is some potential overlap in functionality, but CPQ generally supports a discrete part of the sales process, whereas your contracting platform should be able to support the full contract lifecycle on both the buy side and the sell side.


In summary, a CRM’s in-built contract management functionality may be suitable if all you require is basic contracting functionality (such as storage) for your sales team. A CPQ system can bolster this with additional sales-related functions. But if you’re looking at buy-side functionality, or more sophisticated features such as the management of contractual obligations, you should perhaps consider a dedicated contracting platform with a seamless Salesforce integration. We’ve helped fast-growing sales teams at companies such as Instaclustr implement contracting side-by-side with their CRM. If you’re interested in learning more, we’d be happy to have a conversation with you.

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