What is Contract Lifecycle Management Software?
All organizations have to deal with contracts from time to time. Whether it is an employee contract, a utility service contract, or even a sales contract, virtually all firms will normally encounter some kind of contract irrespective of the industry they operate in.
While there are different types of contracts, which come with various levels of complexities, all contracts have a life cycle.
Contract lifecycle management software helps corporations to manage the entire process of contract lifecycle, from drafting, execution, and expiry. The fundamental steps in a contract lifecycle management process are; request, create, approve, negotiate, sign, capture, comply, manage, optimize.
Contract lifecycle management software streamlines the process and helps organizations handle hundreds of different types of contracts.
What are the Advantages of Contract Lifecycle Management Software?
- De-risks the contract lifecycle management process by preventing physical loss and tampering of the contracts
- Improves overall efficiency in the management of the process by replacing endless error-prone emails and approval times
- Provide a central repository of all organizational contracts, and team members can access from anywhere
- Allow for collaboration within the organization since most contracts cut across the organization
What are the Benefits of Contract Lifecycle Management Software?
- Savings, in terms of reduced sales cycles and associated costs such as legal operating expenses
- Increases the rate of compliance for both parties, which in turn boosts the chances of renewal for key contracts
- Quick decision-making due to the analytics overview that provide data such as cycle times, procurement and sales metrics, deviations, savings, or any kind of potential risks.
What are the Features of Contract Lifecycle Management Software?
- One-click generation of contract drafts due to numerous templates
- Integration of legacy authoring and signing tools such as Microsoft Word, Adobe Sign, and DocuSign.
- Expiration, cycle, and milestone notifications over the lifecycle of individual contracts
- Real-time tracking of edits and documentation of the changes and the versions
- Overview and summary sheets that provide more information at a glance, including financial information
- Access restrictions that can be used to deploy organizational security policies
- Integration with other organizational systems such as CRM, HR, Sales, and Finance
What are the Disadvantages of Contract Lifecycle Management Software?
- Depending on the organization’s choice, some organizations may not afford to acquire or deploy the software
- Having a central repository for all the contracts means that in the event of a system breach, the organization’s runs a risk of data breach.
- Organizations still have to consider the impact of integration, including implementation timeframes and the amount of IT resources required.
What are the Trends in Contract Lifecycle Management Software?
- Many types of CLM software now offer cloud-based deployment, including more secure options such as Amazon Web Services (AWS)
- CLM software now feature real-time and bi-directional integration with other organizational systems such as ERPs and CRMs, including organizational email platforms
- The emergence of leading e-signature applications such as DocuSign and Adobe Sign has improved ease of use for CLM software.
What are the Best Practices in Contract Lifecycle Management?
- Through visibility and accountability, the best CLM systems allow both parties access to the contract throughout its life cycle
- CLM systems provide organizations with an overview of contracts which allow them to keep an eye on financial trends including billing, budgets and total costs of contracts
- CLM systems help strengthen relationships and to treat and prevent agreements internally rather than through external parties or mediators.