Contract management software solutions help organizations to manage all aspects of their contracting processes, providing a structured framework to standardize contract operations. CLM helps companies eliminate manual tasks, automate contract workflows, simplify redlines and edits, and measure and monitor success with sophisticated analytics.
Digitization has impacted virtually every business process, from supply chain management to human resources and from customer service to large-scale project management. Each of these domains is impacted by contracts as well. Contracts govern the terms and conditions under which businesses engage with trading partners, customers, contractors, and employees.
Contract lifecycle management (CLM) solutions forge a vital connection between those formal agreements and the digitized business processes that generate value. The best CLM software brings a new level of intelligence to contracting. That has a direct, measurable impact on business results.
What is a CLM solution?
CLM solutions help organizations manage all aspects of their contracting processes, from initiation through execution, performance, and renewal/expiry. With CLM software, contract managers can operate proactively, identifying key opportunities and risks to the business, automating routine high-volume processes to achieve greater efficiency, and accelerating revenue. CLM helps business leaders limit their risk exposure by identifying potentially missed obligations and improving compliance with legal and contractual requirements.
How do businesses benefit from CLM solutions?
CLM software helps organizations to quantify, measure, and monitor the value they derive from existing legal agreements, to extract maximum value from such relationships, and to better assess the potential of future relationships and proposed terms.
Perhaps most importantly, CLM helps organizations to manage their contracts at scale. As companies grow, the volume, variety, and complexity of their legal agreements tend to increase as well. High-volume customer agreements benefit greatly from automation – especially if terms and conditions are updated on a routine basis. For complex, high-stakes contracts, there are often more internal stakeholders involved than for early-stage growth companies. Overburdened contract management teams at growing companies may overlook important opportunities and risks associated with existing contracts, or they may miss critical renewal dates.
CLM software provides an “assist” for those professionals by organizing, analyzing, and digitizing the organization’s contracts, and by automating routine functions. Here are some of the specific ways that CLM solutions can benefit your business:
Standardize the process
Consistent, efficient processes are a fundamental ingredient for successful business operations. CLM solutions add structure and standardization to your organization’s contracting processes, yielding better results with less effort.
Contracting processes might vary considerably across different departments within an organization. Routine customer agreements, for example, tend to lend themselves to a highly structured and automated approach. A high-value construction project, in contrast, requires a great deal of scrutiny, with the involvement of multiple stakeholders.
In both cases, your organization can benefit from standardizing the contracting process by mapping each step and adding workflows and automation as appropriate. CLM software enables you to manage all of your contracting processes within a single application, which increases efficiency and accuracy.
Decrease in manual tasks
Traditionally, contracting has been a very hands-on process requiring meticulous attention. Without question, there are many stages of the contracting lifecycle that require concentrated effort from a knowledgeable professional, but many stages of the contracting process involve manual tasks that add little value.
Many customer contracts, for example, are standard contracts of adhesion that don’t allow for any negotiation or modification. In this case, the contracting process might simply involve sending an agreement to the customer for execution, verifying that it has been signed, then filing an electronic copy of the document. CLM software helps to automate these kinds of processes, freeing up staff to focus on higher value activities.
CLM software can create further efficiencies through advanced automation. Following on from our last example, the process of onboarding a new customer might also call for activating certain benefits, such as creating a user account in online systems, sending out a welcome packet, and so on. A good CLM solution offers these kinds of automated workflows, with integration capabilities that touch upon ERP, CRM, and other software systems that drive interactions with customers, vendors, and contractors.
Contracting processes often require approval workflows, which lend themselves to automation as well. Imagine, for example, that the sales department is authorized to allow certain changes to the standard language including customer contracts. If a client asks for a force majeure clause, for example, the company might institute a policy that requires approval from a sales manager.
Using an automated approval workflow, your company could configure your CLM software to route such contracts to the sales manager, or to a designated proxy in the event that he or she is out of the office for an extended period. The result is a cleaner, more efficient process that leads to closing business faster. Since
CLM software also provides for efficiency, even when customization is required. In many organizations, for example, inconsistent contract language is a frequent problem. That requires attorneys to spend more time reviewing contracts, both during the drafting process and further down the road, if issues or questions emerge.
Contract templates and clause libraries offer a standardized approach, which ultimately saves time and decreases risk. Managers can store and retrieve multiple drafts of a contract, and can easily tailor the language to suit different legal jurisdictions, or to accommodate different categories of customers, products, or other variables.
The net result is a more consistent and accurate approach to the contracting process, with significantly greater efficiency and lower costs.
CLM adds tremendous value through his ability to serve up information to key decision-makers throughout the organization. Contract analytics provides immediate access to important contract metrics, helping companies gain efficiency by streamlining the contracting processes even further. CLM helps organizations to measure and monitor the business value they are achieving through their contracts, as well as their risk exposure as unexpected events unfold.
Icertis Contract Intelligence (ICI) offers all of these fundamental benefits of CLM, plus a lot more. ICI’s artificial intelligence (AI) capabilities help companies to radically improve the value they derive from their contracts. To learn more about Icertis, contact us today.