5 reasons why DIY CLM builds are risky business for your organization

If you have a solid in-house IT team, it might be tempting to ask: “Why don’t we just build our own Contract Lifecycle Management (CLM) platform?” As CLM implementations become more commonplace, this mindset has also become more common among large enterprises as leaders are asked to accomplish the seemingly impossible — achieving more with less. 

Being able to custom-build your own contract management platform might seem like a great idea at first. Theroetically, it’s cost effective, flexible, and most importantly, built with the institutional knowledge of your internal team, ensuring the solution is perfectly tailored to your organization’s needs.

…Right? 

The reality is that DIY CLM builds are more complicated than they may seem at first blush, especially when it comes to scalability and security. In this article, we’ll talk about the critical differences between building and buying a solution, as well as why enterprise-ready CLM is not just a tool, but a strategic investment.  

The difference between a CLM tool and a CLM platform 

A basic CLM “tool” typically includes fundamental capabilities like a centralized, searchable contract repository with search functionality, electronic signature integration, basic task tracking and reminders, simple approval workflows, and rudimentary reporting. These features are the bare minimum for any CLM; while they address surface level needs, they fall short of true organizational transformation.

Meanwhile, a robust, sophisticated CLM platform might include configurable workflows that adapt to complex approval processes, comprehensive clause libraries that ensure consistency and compliance, and robust integration frameworks that seamlessly work with CRM, ERP, procurement, finance, and business intelligence software. Additionally, AI and machine learning capabilities that can extract important information while reporting sophisticated analytics provide leaders with strategic data that flows through role-based access controls, comprehensive audit trails, and compliance frameworks in a mature, enterprise-grade governance system. 

Building a CLM platform that possesses all these capabilities requires years of development, millions in investment, and deep expertise in contract management best practices across industries—exponentially more complex than most team anticipate. So what are some common pitfalls faced during the development process? 

5 outcomes that might make you reconsider building your own CLM

1. Time-to-value is significantly delayed 

While vendors promote rapid deployment timelines measured in weeks or quarters, internal development projects routinely stretch far beyond initial estimates. Teams need to juggle gathering requirements across departments, testing across different use cases, and oversee rollout to ensure adoption, all of which greatly extend deadlines. 

Sourcing the right internal talent also becomes an issue. Finding developers with domain expertise that spans software engineering, legal workflows, compliance frameworks, procurement processes, and contract management practices is a herculean effort — and often, their efforts are better used elsewhere. 

Lastly, shifting priorities and limited engineering bandwidth cause frequent delays or incomplete rollouts. It’s important to realize just how big the opportunity cost of delayed implementation can be. While your IT department’s CLM build gets deprioritized for the umpteenth time, your competitors are already realizing ROI from commercial CLM solutions implemented months (or years) earlier. 

2. Security and compliance gaps 

Organizations that build CLM systems internally often underestimate the comprehensive security requirements necessary for protecting sensitive contract data and maintaining regulatory compliance.

DIY solutions typically lack the robust security infrastructure that commercial platforms provide. For example, Agiloft maintains security certifications including SOC 1, SOC 2, ISO 27001, and ISO 27701, engages third-party security firms to perform annual penetration assessments annually, and utilizes both manual and automated techniques to identify vulnerabilities after updates. 

The consequences of security gaps extend beyond just technical vulnerabilities. The lack of access controls, audit trails to meet regulatory requirements, data residency options for global compliance, and regulatory compliance features carries enormous financial and reputational risk. 

3. Lack of specialized CLM knowledge

Contracting touches multiple departments within an enterprise, each with its unique needs, priorities, and workflows. Internal IT teams typically lack highly-specialized legal, procurement, and compliance expertise. Without the nuanced understanding of contract management processes that shapes effective CLM design, the solution will not address fundamental user needs, resulting in low adoption and poor business value. 

On the other hand, purpose-built CLM platforms reflect decades of experience accumulated across thousands of implementations. Combining technical expertise with best practices and workflows gets you the best of both worlds, enabling greater value stemming from better design. 

4. Scalability challenges and bottlenecks

Initial internal CLM implementations often serve a single department or region with relatively straightforward requirements. The system may function adequately at this limited scale, creating false confidence in the approach. However, as a business grows, contract complexity expands exponentially with it. 

DIY systems often struggle to handle multi-region, multi-language, or high-volume requirements. Sure, it worked for 50 users in one region, but will it work for 500 users across the globe? Technical debt from short-sighted design decisions constrains future development, bottlenecking performance with rigid workflows. 

A platform that is purpose-built to scale from departmental use to global, enterprise-wide deployments allows organizations to start small and expand confidently. Capabilities such as high-volume processing, multi-tenant configurations, and flexible workflows that adapt to diverse business requirements without custom code can easily scale up to global, enterprise-wide deployments. 

(Related: “How CDW went global with Agiloft’s modern contract system“)

5. Limited integration capabilities

Modern enterprises operate with complex technology ecosystems where data must flow seamlessly across platforms. Contract data can no longer remain static; it needs to stay moving through integrations with CRM, ERP, procurement, finance, and Business Intelligence (BI) tools. 

However, DIY systems rarely support seamless, scalable integrations across a tech stack this diverse. Because each integration requires custom development, testing, and ongoing maintenance as external systems evolve, API changes in integrated platforms break connections and require constant attention from development teams. This burden only grows as your organization adopts new tools or updates existing ones. 

Without robust integrations, organizations end up finding themselves back in silos, even with CLM in place. The promise of contract visibility and control evaporates when data doesn’t flow to where decisions are made. 

Agiloft connects with more than 1,000 enterprise systems out of the box, turning contracts into real-time business intelligence accessible across the organization. Pre-built integrations with major platforms like Salesforce, Microsoft Dynamics, SAP, Oracle, DocuSign, and dozens of others work reliably without custom development. 

To sum things up…

The allure of building your own CLM stems from a reasonable desire for cost control and customization. Despite being well-intentioned, this desire most often leads organizations into expensive detours that result in sunk cost fallacies sinking all the way to the bottom of the pitfall. 

Enterprise-ready, robust CLM platforms like Agiloft deliver capabilities that would take years and millions of dollars to replicate internally. The organizations winning with contract management aren’t those that built the most sophisticated internal tools; they’re the ones who implemented proven platforms quickly and focused their limited resources on differentiating their business rather than reinventing contract management. 

Ready to explore what purpose-built CLM can do for your organization? Contact Agiloft today to discuss your technical requirements and how we help enterprises transform contract management without the risks and costs of building internally.