There are many efficient contract management platforms on the market for small businesses, expansive enterprises and global multi-nationals. Searching for the best contract management software to manage contracts can be daunting.
But it doesn’t have to be – you just need to know which contract lifecycle management requirements to look for when implementing a contract management system.
Let’s consider the ten key items you need on a contract management system requirements checklist when deciding on a CLM software solution that will save time and money for your organisation.
1. Automated contract data extraction with AI
When implementing contract management software requirements, the cloud-based software you choose must provide contract data extraction as a starting point for contract data oversight and your contract management requirements checklist.
With contract AI, you can extract legal text and clauses using natural language processing (NLP), fuzzy logic matching, and structured data recognition to make the most of legal clauses and terms. You can also identify sensitive data and establish rules for access and storage of:
- counterparties
- dates
- locations
- emails
- phone numbers
- monetary values.
In today’s business environment, your contract lifecycle management requirements should include generative AI for contracts. Businesses across sectors and niches are embracing generative AI and a contract management solution with OpenAI integration enables a chat feature to generate clauses, legalese, ask questions about legalese, and generally interrogate your contract management software system.
2. A secure and searchable contract repository
A secure and searchable contract database allows your team to locate documents, data, files and attachments – eliminating time-consuming, manual search processes. Some standard features should include familiar ‘Did you mean…?’ search functionality, search filtering options, search content and file previewing, drill-down searching, the ability to export search content into familiar file formats, and user permissions/rules around who can access contracts and other data.
A huge step beyond filing cabinets and sporadic shared drives for searching for various complex contracts, contract lifecycle software can support your team with a long-term solution for finding contracts (virtually) anywhere at any time.
3. Support of ranging contract types
Organisations manage almost endless different types of business contracts for both public and private sector business relationships. The business contract management software solution you choose should ideally support all these business agreements.
Your chosen system should provide a list of out-of-the-box contract types so you can quickly begin keying in new contracts in the knowledge that all the different types of contracts you manage will be supported. You should also be able to add a virtually unlimited number of user-defined contract types. Additionally, authorised users should have the ability to manage the list of contract types as contract management requirements evolve.
4. Common and configured contract metadata fields
In addition to out-of-the-box fields for common contracts, your contract management system requirements checklist should include functionality that simplifies creating contracts and tracking metadata for specific types and processes. Management of these fields must be flexible – allowing you to assign fields to one or more contracts, grant permissions regarding fields for one or more employees, and oversee the types of metadata fields you manage (such as dropdown, free form, numeric, etc.). Advanced solutions also offer intelligent recommendations for fields for clauses and legal terms.
5. Contract templates and version tracking
To make it easier to draft contracts during contract creation, your solution should allow you to merge contract metadata fields and clauses with contract templates from your pre-approved template and clause library. Additionally, you can leverage numbered version control and audit trails to track the most up-to-date contracts. These processes help your team members build compliant and accurate contracts with ease to bring them to the proverbial negotiation ‘table’. As your contract lifecycle management requirements change, you can start leveraging advanced clause recognition based on significant amounts of training data.
6. Online negotiations with auto-redline and more
Your team should have the capacity to engage in contract negotiations with ease. Make sure clauses and sections can be locked so that – with clause ownership – those assigned to clauses and sections are notified when someone tries to edit them.
Be on the lookout for contract auto-redline. This feature can automate the inclusion of clauses from your pre-approved library while redlining originally introduced clauses and swapping them with established and accurate preferred clauses – virtually ensuring that favourable clause language is included. Comprehensive audit trails put that you and the other parties involved on the same page so no unpreferred contract version slips past your team. Make sure these negotiation features are on your contract management system requirements checklist.
7. Electronic signatures
You’d be remiss not to leverage a cloud-based contract solution that supports a fast and easy way to execute and sign contracts after the approval process. You can automate document management, electronic signatures and digital signatures with security and compliance via a legally binding process. Convenient placeholder options can quicken the process on your terms and custom colours, fonts, sizing and formats can provide a professional and branded experience.
8. Contract document and data archival and retention
Your CLM solution needs to allow you to easily manage contract archival, retention, and destruction. You can configure notifications to alert assigned users of data ready for archiving or purging based on key dates, compliance standards, and other variables. Rather than automate contract purging (not to be encouraged) you can automate workflows for your team to review closed contracts ready for purging within a manageable timeframe, helping with mitigating risk and reducing accidental data deletion. Moreover, audit trail history with trackable status changes can enhance contract data task management oversight and data policy accountability.
9. Contract analytics
Take a proactive approach to contract analytics beyond the standard, out-of-the-box reports with an optimal CLM solution that also serves as a contract tracking software system in and of itself.
You need real-time, data-driven visibility into contractual relationships across entities or business units on your contract management system requirements. You should be able to prevent unexpected costs and breaches of contract, maintain compliance, prepare for contract renewal dates, reduce inefficiencies, and address payment and negotiation timelines. Dashboard contract management can provide analytics at a glance, such as:
- contract KPIs
- contract overviews
- contracts by department
- vendor management summaries
- year analysis.
10. User-friendly CLM integrations and connectors
Better contract analytics should also be considered among contract lifecycle management requirements. This can be achieved with a system that offers user-friendly integrations and connectors to:
- word processing tools
- spreadsheets
- external eSign platforms
- CRM systems to keep contract management and sales teams on the same page
- accounting systems
- solutions for change management optimisation
Feel free to ask a solutions provider if they support integrations with other systems you may want to centralise contract management processes with others.
Summing things up
There are various contract management system features out there and you should make sure the contract management system requirements checklist items above are available as standard in your chosen solution. The data shows that the vast majority of legal teams (according to leading analysts) are embracing solutions for stronger business processes with award-winning features.
Our contract management software platform that offers the tools mentioned above and more for effective amendment management – Contract Insight®.
Contract Insight is an award-winning contract management software solution that’s received acclaim from third-party analysts, legal professionals and many others. Users can successfully oversee amendments and other key contract with comprehensive contract lifecycle management. With a secure and centralised contract database, user permissions oversight, easy searching and electronic signatures, your organisation can seamlessly manage the contract lifecycle and exceed contract management KPIs.
To learn how to more easily draft contracts, get contracts reviewed, collaborate on negotiations, and much more to improve contract management processes, book a free demo of Contract Insight® contract management and eProcurement software today!
Contact John O’Brien, CEO at Four Business Solutions – global business consultants and software integrators specialising in business process improvement.