Contract lifecycle management certainly is not the most robust part of the modern business and transaction process. However, adopting effective contract lifecycle management services is essential to the health, scalability, and longevity of any business. By leveraging an approach to the contract lifecycle that allows users to rapidly update and upload compliant contracts according to the most current information, you proactively develop efficient contract administration and management that supports both your team and the client or vendor. Simply put, with contract lifecycle management (CLM) software, you can streamline the contract lifecycle for all involved and better serve your clients and vendors.
Content:
- The Fundamentals of Contract Lifecycle Management
- Why Your Business Needs CLM Software
- Modern Day Contract Lifecycle Management (CLM) Solutions
- Centralization of Contracts
- Standardization of Contract Authoring
- Effortlessly Edit Contracts for Negotiations
- Automate Approvals
- Contract Administration Made Easy
- Refined Reporting and Data Analysis
- Conclusion
The Fundamentals of Contract Lifecycle Management
The contract lifecycle is comprised of several essential stages to create the most results-driven, quality contracts. First, a request for a contract is submitted, and then an accompanying contract is created, negotiated upon, and approved. Following this, the contract is signed, executed, and stored for ongoing management, reporting, and data analysis. Lastly, the contract either renews or expires.
Enhancing any given stage of the contract lifecycle takes a considerable amount of manual effort. Without the assistance of a dedicated contract lifecycle management (CLM) software solution, you run the risk of encountering avoidable bottlenecks as well as wasting money, time, and company resources.
Why Your Business Needs CLM Software
Many businesses fall into the trap of believing that so long as their company successfully delivers their product or service to their customers, their contracts don’t need additional oversight and standardization. However, this oversimplification of the contracting process fails to recognize the value that contracts can provide to an organization. As a result, businesses miss out on many opportunities and deals, impacting their bottom line. Companies that prioritize the optimization of their contract lifecycle management can see major improvements in the value and the outcomes of their agreements.
Contracts serve as one of the most foundational business agreements that are required in many sales processes. These legal agreements define the goods and services transferred between a given client or vendor and a business, which supports the mitigation of risk on both sides of the agreement. Contracts outline the terms and conditions of a business agreement, and with improper management of these relationships, companies can run into increased risks and costs.
Modern Day Contract Lifecycle Management (CLM) Solutions
Today’s CLM software solutions empower businesses and organizations to maintain the entirety of the contract lifecycle on their own, customized terms. This supports the business at hand in standardizing and systematizing their contracts, resulting in more professionally written and compliant contracts. No matter the size of your organization, be it a small business or an enterprise, and no matter the volume and complexity of your contract portfolio, an intuitive contract lifecycle management system can help you gain the upper hand on all of your company’s contracts. CLM software supports companies in extracting the most value possible out of each agreement by streamlining every phase of the contract lifecycle. Risk mitigation is another amazing benefit of adopting a CLM software solution that shouldn’t be overlooked. The client and vendor experience will also most certainly be improved due to faster turnaround times, increased security through the cloud, and electronic signing.
With the many innovative features available in today’s contract lifecycle management software solutions, you can enable business results and increased rates of productivity and compliance within your organization all while boosting your working relationships with clients and vendors.
Centralization of Contracts
Every business transaction involves communication and collaboration with clients or vendors. In many sales processes, your clients and vendors will request access to contract information. In enterprise-level organizations, signed contracts typically are found in the sales department by being delivered in a variety of ways. This can make the responsibility of organizing all of your executed contracts incredibly difficult – especially without the assistance of a centralized contract repository.
CLM software eliminates many of these challenges. Your contracts are easily accessible within a searchable, cloud-secure location. You can additionally configure access controls to increase the protection of your contracts and associated documents. Authorized users can access your contracts within the repository at any time, any place, on any device, and review and edit contracts without stressing about version control.
Standardization of Contract Authoring
Contract authoring is an intricate process that requires careful attention to detail. During the contract authoring phase, the agreement is often passed to multiple stakeholders to provide their review. However, every person who reviews the document has their writing style, which can result in inconsistencies in language across the board of your contracts. The lack of standardization of your contracts can result in an increased likelihood of sharing contract drafts comprised of disjointed language with your clients and vendors.
However, contract lifecycle management software supports standardization of contract language during your contract authoring phase to build the most professional, accurate contracts. This can assist your sales department in streamlining its processes by defining how every contract is to be authored, which is incredibly useful in high-risk situations requiring rapid contract drafting.
Effortlessly Edit Contracts for Negotiations
In the case of complex contracts, an effective negotiation phase is essential. Negotiations typically involve multiple phases of revisions and the comparison of previous drafts with current ones. Your negotiations can slow the contract lifecycle substantially and hinder the value of the resulting contract.
To appropriately oversee a current list of edits made during a negotiation, a CLM solution is the key. These software systems enable users to review comprehensive records and edit histories to see a complete picture of the whole negotiation phase.
Automate Approvals
Automation supports several components of the contract lifecycle. However, the approval stage is one of the most highlighted processes that is greatly served by automation. Contracts can falter following the negotiation phase and after edits are made. With a manual contract management approach, your physical copies of contract drafts are passed between several people, which often results in changes in the document’s format and a varied approval process.
With CLM software, you can automate the approval stage with automated reminders that alert approvers when a given draft is ready for their review. Contracts are available for easy formatting and transfer to specific file types throughout the approval.
Contract Administration Made Easy
The contract lifecycle isn’t complete once the draft is approved, signed, and executed. Contract terms, milestones, and obligations must be continually monitored and upheld. Data collected during the contract lifecycle must also be stored, reviewed, and analyzed for reporting purposes.
The intelligent features provided by contract management software solutions support users in maintaining control over their contract administration efforts in one place. Configure your software to send automated notifications to relevant stakeholders if milestones are attained. Obligation management is simplified with features that support obligation tracking for each side of the agreement, where you can receive and send reminders to cultivate a proactive approach to your contracts.
Refined Reporting and Data Analysis
Reporting can cover several aspects of the contract lifecycle, supporting business owners and contract managers in gaining insights into the performance and statuses of their agreements. New contract data is constantly acquired throughout the lifecycle which is usually shared business-wide. To centralize your contract lifecycle data, you can leverage CLM software reporting features to oversee the progress of every contract throughout the entire lifecycle. Proactive contract dashboards and instant, custom reporting generation can support your team in gaining the knowledge they need to develop improved contract lifecycle management strategies. With custom reporting, you can generate reports specific to select stakeholders.
Conclusion
Are you ready to take your contract lifecycle management to the next level in 2024? Consider the many contract lifecycle management services mentioned within this blog and pinpoint which ones could benefit most from optimization. Here at Dock 365, we offer all you need to systematize and streamline the contract lifecycle and produce an enhanced contracting experience for your clients, vendors, and employees.
Learn more about our Dock 365 Contract Management System here.
