A How-to Guide to Integrating CLMs, CRMs, CPQs, and ERPs for Real-Time Risk and Revenue Management

Your contracts are the foundation of your business relationships—but after a contract is signed, other systems take over. 

Your customer relationship management system (CRM) manages your customer accounts and prospecting deal cycles. Your configure-price-quote tool (CPQ) configures pricing and packages once you’re ready to sign on the dotted line. And your enterprise resource planning software (ERP) manages your supplier relationships and spend. These enterprise-wide systems do most of the day-to-day heavy lifting for your sales, HR, and legal teams, yet they rarely talk to one another.

Because contracting fits into all of these end-to-end processes, it’s critical to connect these systems together. These important systems don’t always talk to one another, which is why we call an expert in to help strategize how to connect them without losing key functionality. When you need help with implementation, you call Kieran Daley, Director of Legal Ops at Ironclad partner Spaulding Ridge. Says Daley, “We are a cloud implementation partner with one of the largest technical legal ops practices globally to support integration implementations. There’s a lot of nuance to doing this right, but once you connect your systems together, it’s a total game-changer.”

There are three main phases to any implementation:

• Preparation: The strategy and preparation that makes an integration go smoothly.
• Implemention: Getting the job done.
• Performance: Scaling the technology as your organization grows.

In this post, we’ll discuss how to connect your CLM with systems like your CRM or ERP for real-time risk and revenue management.

Why connecting your CLM to enterprise systems matters

Most enterprise systems don’t naturally “talk” to one another. But failing to connect your contracts with the rest of your systems has real financial and legal consequences.

“One of the biggest challenges we see when we talk to clients about their processes is that what’s in their contract doesn’t always match what’s in their system of record,” Daley offers. “If what’s in the signed contract doesn’t match with what’s in your system, you may trigger incorrect billing and invoice processes, which impacts the rest of your downstream finances and data integrity.”

A CLM is required for nearly every function of the business:

• Sales: MSAs, order forms, pricing and quotes, and contracting agreements between customers and the business
• Procurement: Supplier onboarding, purchase requisitions, and POs
• HR: Employee contracts, benefits packages, promotions, and severance agreements

In sales, you may have a Salesforce opportunity with pricing and obligations that gets approved internally, but then when the contract is sent out, it disappears from the system. Then you lose control over the document as it’s negotiated and signed, unless someone manually records the contract in Salesforce. 

There are more time-consuming issues to consider. If you’re finalizing a quote for a customer in your CPQ tool, each product or pricing schedule is going to determine what contracts and clauses need to be included, especially if you’re selling a specialist product with a complicated package. If those systems aren’t connected, you’re stuck manually copying and pasting each line item and hoping you’ve got the governance correct. “There’s a risk that you’re putting together a quote and a contract that don’t actually match,” says Daley. “It really opens your business to risk if you’re not contractually covered for a specific product or service in the quote, especially if it comes down to an error from manual data entry.”

Those are just a few examples of the everyday risk (not to mention the manual, time-consuming work) that comes from disconnected, fragmented systems. “That’s why having a connected contract management system is so important, so you make sure that the data flows into the contract, but then after the signature, it flows back into the system of record so the full end-to-end journey is there,” adds Daley. “You never have to question exactly what’s going on, so you’re not losing governance, control, and peace of mind.”

Below are his recommendations for each stage of an implementation so your systems get connected properly.

Preparation: Setting your integration up for success

Before you get started, you’ll need to determine your integration strategy, make an assessment of your data, and do due diligence around security and compliance.

Define your integration strategy

First determine which systems you want to connect to your CLM. That helps determine the how. 

You have several options for your connection depending on the system and your current tech stack:

1. Direct (also known as point-to-point): Custom connections between two platforms
2. Connectors (also known as APIs): Standardized, reusable interface between two platforms
3. Middleware or iPaaS platforms (like Zapier or MuleSoft): Third-party software that connects the two platforms

“Much of your choice depends on your existing platforms and what already exists that we can leverage,” explains Daley. “Existing middleware platforms work well for complex environments, while we might do a point-to-point for a simple use case. The first thing I’d do for a customer is to assess those capabilities and determine that integration strategy.”

Part of this choice depends on which systems you want to connect. Major CRM platforms like Salesforce and HubSpot have much simpler data models than a typical ERP, making point-to-point the way to go. CPQs are often structured similarly to a CRM, so point-to-point works there, too. But an ERP has so much complexity, middleware or connectors tend to work better. 

Conduct a data assessment

Once you’ve made the technical choice on how you’ll connect the two systems, you’ll need to do an in-depth assessment of the data quality and location. “Our goal here is to understand how we need to map data from one system to another, and what the data models look like in each platform,” says Daley. “That way, we can support each platform and align them into a centralized place.”

Then, you’ll also need to decide how often the data is shared between the systems. You can set them up to be real-time (instantaneous connection) or batch (refreshes at a certain set time each day or week.)

Your data and goals determine which frequency to choose. A CRM is going to need real-time integration because the sales cycle moves so quickly. Procurement, on the other hand, tends to use batch integrations because it gives the systems time to become more accurate and aligned. Unlike customer lists, accounts lists don’t typically change week-to-week. 

“You need to decide when you need the information, but also what kind of load you want on your systems at any given time,” explains Daley. “Every time a system updates, it triggers one system or another to start the process of flowing the data, so you need a strong architecture to make sure it’s accurate, reliable, and that the data makes sense.”

Plan access controls for security and compliance

Finally, make sure you have a plan in place to implement security and compliance best practices around access controls. Says Daley, “Of all of the options for integrations, middleware is the most secure for authentication and data management. If you chose point-to-point, then you need to build in all of the extra security and authentication controls to manage the data sharing between the two systems, rather than using out-of-the-box functionality.”

One isn’t better than the other, but you do need to understand the scope of work required not just to connect the systems together, but to comply with all major data sharing and privacy regulations.

Implementation: How to make sure it goes smoothly

Much of the work during the implementation comes down to your engineering team or external partners like Spaulding Ridge. If you’ve done your preparation step right, this part should be relatively straightforward.

“The biggest thing during the actual development is to test and keep testing, to ensure that nothing goes wrong when it goes live,” says Daley. One of the key tests that his team will run is data modeling and mapping between the two systems. 

In Ironclad, for example, if a data point doesn’t exist or isn’t populated in the source system like an ERP, you’ll need to create a fallback so that the logic still works when the data flows into the CLM. “Part of the implementation is defining a very solid testing strategy for every possible scenario, so that the integration works no matter what,” he says.

Performance and maintenance: How to scale your systems as you grow

After you’ve connected your systems, it’s not just a one-and-done situation. “If you’re scaling a business, those processes and platforms have to scale with you,” Daley advises. “You can’t rely on something that was implemented even three years ago to continue your growth without making any changes. You’ll need them to continuously evolve as you do.”

That means if you change the structure of your data model in a CLM like Salesforce, it may impact the data flowing into a CLM like Ironclad. Your team should track performance metrics like:

• Data accuracy
• Error rates
• Failed integration or data mismatches
• Latency issues

Daley recommends auditing your integration on a regular basis. “Whenever we set up an implementation for our customers, we also set up a center of excellence for the management of the platform, which includes a change management process so that when one platform changes, you can understand the impact on the rest of the systems that rely on that platform.”

What this looks like in action: A CPQ example

What does an integration between major enterprise systems look like in practice? Let’s take CPQs and CLMs as an example.

CPQs generally offer basic document generation features, but there’s significant gap in the quote-to-cash cycle. The CPQ does all of the up front work as you’re discussing and negotiating the products and services, and can give you a solid contract to start with, but it’ll miss important elements or key clauses your legal team will want to include. “The more complex your services are, the more likely you’ll miss something important by not connecting these systems,” says Daley. “You might have ten different combinations of annexes and contracts that need to be combined based on the products and services you’re negotiating, and with approvals you end up losing visibility and governance along the way. Connecting to a CLM is so valuable because it gives you the right contract information embedded into the sales process.”

Daley recalls a recent client that the Spaulding Ridge team is migrating to Ironclad, with an integration in Salesforce. “They’ve had significant challenges aligning their data between Salesforce, their CPQ, and their legacy CLM,” he shared. “Because of this, they had to over-engineer the process in Salesforce, which created thousands of additional records in their Salesforce environment that made it difficult to use and hit their limits pretty quickly, so it got too costly from a time and budget perspective to continue. On top of that, they had no trust in the data because there were too many gaps between what was in their contracts and what they agreed and signed.”

With Ironclad, they’re getting a seamless, end-to-end connected contracting process so the data syncs properly between the contract in their CLM, the opportunity in Salesforce, and the CPQ. “Ironclad allows them to manage their sales contracts more effectively today and in the future, with stronger data analytics and reporting capabilities to analyze their business position, risk, and customers long-term with terminations, renewals, and amendments. Right now, all of that is manual, and they’re excited to see what Ironclad can do.” 

Learn more about integrating Ironclad with your CRM, ERP, or CPQ tools by requesting a demo today.

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Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney.