Contract Lifecycle Management (CLM) delivers measurable benefits by transforming contracts and contracting processes, turning static documents into strategic assets. For companies considering a CLM solution, it pays to think in big-picture terms.
To build long-term competitive advantage, business leaders must consider both short-term realities and long-term aspirations of the business. As a result, the decisions your company makes today will ultimately determine how much value your organization realizes from its CLM investments.
Contract intelligence expands on the concept of CLM, structuring and connect diting critical contract information that defines how an organization runs. Today, the world’s most iconic brands and disruptive innovators are turning to contract intelligence to move faster, reduce costs, and drive compliance.
In this article, we’ll address the compelling case for CLM and contract intelligence. We’ll also discuss key attributes to look for in a contract intelligence solution and the foundational elements of a successful CLM rollout.
Why Enterprises Need CLM
Contracts are the foundation of virtually all commerce. Attending to your company’s commitments - and to the commitments made to you by customers, vendors, employees, and partners - is essential to maintaining effective and profitable relationships.
CLM solutions provide a structured framework for managing those obligations - from an initial request or proposal through to contract renewals, extensions, terminations, and analytics. Ultimately, CLM is about managing contracts more efficiently, reducing risk, and building agility in your organization.
With a CLM solution in place, enterprises enjoy a range of benefits, including:
- Shorter sales cycles and more valuable deals: World Commerce & Contracting (WCC) reports that contract cycles may be reduced by as much as 80% among industry leaders using strategic CLM solutions. That translates to more revenue, higher stakeholder satisfaction, and increased profits.
- Streamlined and agile vendor onboarding: CLM enables structured processes, starting with a request for x (RFx), negotiations, and approvals. That means faster time to value and a powerful tool for managing supply chain risk.
- Improved efficiency and reduced risk in enterprise operations: Once a contract has been executed, CLM helps companies manage execution, compliance, and eventual disposition. This translates into measurable financial benefits. For example, Microsoft’s Enterprise Volume Licensing department reduced contract administration costs by 50% using the Icertis Contract Intelligence platform.
- Richer and more compliant employee engagements: Like any other contract, employment agreements require meticulous attention to detail. CLM offers an intelligent, structured approach to managing engagements with employees and contractors - from initial NDA to renewals and terminations.
Remain Ambitious with Contract Lifecycle Management
While traditional CLM promises and delivers a wide range of benefits, enterprises must adopt an ambitious vision for digital transformation. That includes a long-term view of CLM and how it can grow and evolve.
As CLM technology advances rapidly, companies should look for a solution that not only meets their immediate contract management needs but is also adaptable to grow into for years to come. High-growth companies are especially susceptible to technology obsolescence if current solutions are not agile enough to handle the increased complexity of rapid expansion. If this happens, you could end up back at the drawing board in a year or two as you realize the need for more advanced features. It pays to think big.
To gain strategic value from CLM investment, business leaders should look to contract intelligence. Contract intelligence is advanced digital contract management that links the entitlements and obligations in any kind of contract to critical business processes, ensuring:
- All agreements are in compliance
- Commitments are upheld
- Changing conditions dynamically trigger appropriate actions
- High-value insights are available in real-time
- New information makes the whole system increasingly smarter and faster
Contract intelligence allows you to analyze contracts dynamically in the context of your systems and processes. That expands your understanding of how they drive all aspects of your business and ensures the intent of every contract is fully realized.
Contract intelligence improves CLM by offering new capabilities and unimagined insights to help businesses operate more effectively.
Think Big, Start Smart
For the maximum value, you must think big and have a long-term vision; but for a successful CLM rollout, starting smart means starting small. By focusing initially on quick wins, you build organizational buy-in and confidence in the solution. That will prove invaluable in expanding your efforts to address more complex contracting challenges.
A Smart Case Study
A $6 billion company in the software technology sector started smart, beginning with an initiative to streamline its NDA process. As it experienced rapid growth, the organization struggled to keep up with its manual contracting processes. They created a big-picture vision for building scalability across their enterprise, but they started with a quick win.
The organization’s contract management team created a list of 104 potential use cases to streamline and enhance contracting processes. Icertis was the only company able to satisfy all 104 use cases. This software company selected Icertis as its enterprise-wide contract intelligence platform.
Using the Icertis Contract Intelligence platform, the company freed up its team of seasoned attorneys from high-volume, low-value tasks. Their initial effort led to a 96% touchless completion of NDAs and set the stage for the next phase of their CLM evolution.
By starting with a clear, compelling, achievable use case, this software industry leader successfully laid the foundation for making its broader digital transformation vision a reality.
How to Implement a CLM System Successfully
Any successful CLM implementation begins with adequate preparation. Before a single contract enters your new system, lay the necessary groundwork by following these four steps:
Create Your Dream Team
Take great care in selecting team members that will evaluate and select CLM software and who will be responsible for implementing the winning solution. Various stakeholders offer different perspectives on how CLM can best serve the organization. The more buy-in you get early in the process, the better you will be to scale your contract management capabilities as your organization grows and your needs change.
Ideally, you should involve stakeholders from sales, procurement, legal, IT, and finance early in the process. This will help to choose the best CLM solution for your company. It will also establish a team of advocates that can proactively encourage adoption to take contract management to the next level in your organization.
Map Out Your Current Processes
Start by mapping out your current contracting processes so that everyone in your organization has a clear and common understanding of how things work today. This is an opportunity to identify manual processes, wasteful effort, and risk exposure. Perform a cost-benefit analysis for applying CLM to each of these processes, and look for quick wins that can serve as proof points for your initiative by adding measurable value in the short term.
High-volume, high-effort contracting processes are the best candidates for early implementation. For complex, low-volume processes, it’s advisable to maintain a “parking lot” of use cases for future projects to be implemented later.
Implementation Goals and KPIs
Once your contract processes are mapped out, you should clearly define what you want from your initial CLM implementation. Benchmark key performance indicators (KPIs) and set goals for the improvements you would like to see. Contract turnaround time is a common KPI, as it frequently impacts revenue, operational efficiency, and organizational agility.
Eventually, you will want to report on the contract management improvements your team has achieved due to your CLM initiative. That will help you to build confidence in the solution and establish forward momentum.
Get a Fast Start (while remaining realistic)
Make sure your stakeholders know that contract management processes will not change overnight. A measured process is important if your CLM initiative is to lead to meaningful long-term transformation.
Early proof of value cannot be overstated. Implementation teams should look for quick wins and define discrete milestones for their CLM journey. Look for high-value results that can be achieved quickly, and build a roadmap to gain additional wins from there. Be realistic, and understand that changes to the status quo usually take some time.
Choose a Trusted Partner
Select a CLM provider that has demonstrated a long-term commitment to innovation, with a clear focus on contract intelligence. Technologies like AI are advancing state of the art. Companies not investing in cutting-edge capabilities will eventually end up on the wrong side of the digital divide, left to play a game of catch-up as their CLM solutions become obsolete.
Your CLM vendor should not simply be selling you a product. They should be committed to your success as a long-term partner, helping you throughout your entire digital transformation journey. Look for vendors with deep expertise in contracting and a clear track record of successful enterprise-wide implementations.
With unmatched technology and category-defining innovation, Icertis pushes the boundaries of what’s possible with CLM. The world’s most iconic brands and disruptive innovators trust Icertis to fully realize the intent of their combined 10 million+ contracts, valued at more than $1 trillion, in 40+ languages and 90+ countries. An unwavering commitment to contract intelligence, grounded in our values, creates the ideal foundation for enduring partnerships.
To learn more about Icertis Contract Intelligence, contact us for a free, no-obligation demo.