NEW REPORT: The State of CLM and AI-Powered Contract Intelligence

Connecting CLM with Other Critical Enterprise Systems

Discover the crucial role IT plays in integrating Contract Lifecycle Management (CLM) with other enterprise systems to drive digital transformation success. Learn why seamless integrations with enterprise systems are essential and how CLM can become the authoritative fifth system of record.

September 13, 2023

In recent blogs, we’ve investigated how and why contract management is becoming a critical tool for the enterprise, and IT’s role in helping guide the business to contract lifecycle management (CLM) solutions that achieve value.

We looked briefly in our last blog at how contract intelligence, a new approach to contract management, drives business outcomes by taking advantage of artificial intelligence and deep integrations.

In this post, we’d like to take an even closer look at how integrations between CLM and other enterprise systems are essential to the success of digital transformation efforts around contracts. We’ll explore the types of integrations to consider pursuing and why, as well as what it takes to maintain those integrations and truly unify your digital ecosystem.

Crucial to digital transformation

As more and more companies pursue enterprise-wide digital transformation, contract lifecycle management is emerging as a critical component of business success.

But how contract management solutions are integrated has a tremendous impact on just how much value the technology will bring the business. As the team ultimately responsible for ensuring the success of those integrations, and the organization’s digital transformation strategy more broadly, it’s essential that IT understand CLM integrations and how to make them as seamless as possible.

Why? Since contracts affect every element of business, they naturally span the entire enterprise. 

Unifying contract data across the enterprise

In order for it to drive business outcomes, contract information must be able to flow between contracts and other enterprise systems across its lifecycle — both before and after it is signed. By doing so, organizations can ensure their contracts accurately reflect what was intended in a business relationship, and that what happens “in the real world” reflects what was agreed to in the contract.

For example, the sales team could need data from CPQ (configure, price, quote) software to flow into the document pre-signature to make sure it reflects what was quoted. Procurement might need insights from the enterprise SCM (supply chain management) to ensure a supplier is in good standing before firing off a purchase order.

Once in place, the need for integrations with other enterprise systems becomes even more crucial. Contract management systems must be connected to critical transactional systems to validate that what’s been contractually agreed on is actually taking place. For instance, is the organization getting paid what was established? Paying what it’s supposed to? Getting appropriate volume discounts? And the list goes on.

An API-first approach is needed

To make enterprise-wide integrations a reality, the organization needs a contract management solution that takes an API-first approach. While it might seem simple and appealing to have contracts — and the technology that manages them — stay within the walls of the legal department, it severely limits the capabilities and value of contact management.

Contract management integrations create value as teams collaborate on contracts, accelerating contract flow as everyone required to create, view, or approve them can do so seamlessly.

Contract management integrations create value as teams collaborate on contracts, accelerating contract flow as everyone required to create, view, or approve them can do so seamlessly.

Think about who touches a contract throughout its lifecycle. It’s certainly not just the legal department. Still, legal teams may be well served by a contract management integration with Microsoft Word, for example, to edit contracts more quickly and easily using a familiar tool. 

Finance, on the other hand, could need integrations into ERP to automate finance and compliance. And HR can use CLM integrations to ensure the obligations around the organization’s most valuable assets — its employees — are respected.

The ease of use that such integrations spawn is also an important consideration. Integrating with existing systems and tools encourages CLM adoption. Contract data is presented to users in tools they are already comfortable with, such as Microsoft 365 or Salesforce. 

As IT teams know all too well, a digital tool’s worth is determined by the degree to which it is used by the people who need it. Consider how integrations can ensure that your CLM meets users where they are at.

A fifth system of record

All of this points to CLM becoming a new source of unique but vital information — relationship data — being added to the organization’s existing systems of record. At Icertis, we categorize enterprise software into four SORs: customer data (CRM); supplier data (SCM); enterprise resource data (ERP); and employee data (HCM). By using AI to turn otherwise unstructured contract intent into data, structuring it and integrating it with these other systems, contract intelligence can become a “fifth” system of record: the authoritative data source on the business relationship data.

Of course, to reach this lofty status, the contract management solution must have the partner pedigree necessary. It must have partnerships with other major technology providers, like SAP, Microsoft, Salesforce, or Workday, that support co-development and joint roadmaps to make sure integrations work at peak performance.

Once an organization has deep and seamless integrations with other enterprise systems that come from an API-first contract management solution, it’s on a path to creating a new critical system of record. And with that system of record, teams across the organization to maximize the value of every contract.

Interested in learning more about the CLM market? Access Gartner’s assessment of Contract Lifecycle Management (CLM)  vendors in the Gartner Magic Quadrant

contract lifecycle management diagram

Icertis Contract Intelligence - CLM 101

What is Contract Lifecycle Management?

Contract lifecycle management (CLM) is the management of an organization’s contracts from initiation through execution, performance, and renewal/expiry. Effective and proactive contract lifecycle management is achieved through the use of contract management software. CLM software can lead to significant improvements in cost savings and efficiency.

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Contract Intelligence for Procurement

Streamline the source-to-contract process for faster deals and reduced risk.

The platform can also help your team plan more proactively, with timely notifications and alerts on expiring contracts, potential incentives, and rebates, as well as seamless integration with popular ERP systems like Microsoft Dynamics, SAP, and Oracle. Smartlinks show all the related contracts for each agreement, including any Master Services Agreements, related scopes of work, change orders, or other associated documentation.

Explore Contract Intelligence for Procurement

Icertis Supplier Relationship Management

The SRM application enables businesses to handle standard supplier management challenges

Optimize your business value chain for the long term while reducing risk, cycle time, and compliance burden with 360-degree supplier relationship management. The AI-powered application allows users to seamlessly manage end-to-end supplier onboarding, performance management, contract governance, compliances, and disengagement.

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Advanced automation and deep, native experiences

Seamlessly connect with your enterprise systems such as Microsoft, SAP and Salesforce to automate end-to-end business processes and enjoy a richer experience.

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