Contract management. To many, the phrase evokes images of crowded file cabinets with reams of paper, complicated email threads and the constant fear that some critical bit of information will slip through the cracks. Such patchwork contract handling is all too common and entails severe consequences. Missed deadlines, noncompliance, and lost revenue are just a few of the potential catastrophes.
But there’s a better way of managing these key business agreements: contract lifecycle management (CLM). CLM is not all about electronic signatures for completing contract execution; it’s an end-to-end approach that transforms contracts into strategic assets instead of liabilities. To that end, let’s deeply explore why contract lifecycle management is essential.
Four Business understands the complexities of modern contract management. We’ve witnessed firsthand how a properly implemented CLM software solution can revolutionise an organisation’s operations. It’s not just about making efficiency more streamlined, though that is undoubtedly among the significant benefits of contract lifecycle management. CLM really changes the way companies interact with their contracts, providing them with a single source of truth for managing every stage of the contract lifecycle, from initial drafting and negotiation to execution, day-to-day administration, and eventual renewal or contract termination.
Mitigating risk: protecting your bottom line
Risk mitigation is among the most substantial cases for adopting CLM. Contracts are legally binding agreements, and minor errors or oversights can lead to costly disputes and reputation damage. Contract lifecycle management (CLM) systems reduce these risks by fostering standardised procedures, helping with the tracking of obligations, and providing automated reminders for due dates and milestones. This front-end approach virtually ensures compliance and reduces the risk of litigation.
Increasing efficiency: freeing up valuable time
Along with risk management, CLM also significantly enhances efficiency. Human contract processes take forever, with hours upon hours spent on things like data entry, document review, and tracking down approvals. CLM takes this drudgework away from legal, sales and procurement teams, leaving them free to focus on higher-level projects. Imagine a life without infinite email threads and chaotic document hunting—that’s what CLM allows.
Enhancing visibility: getting a clear picture
Visibility is another critical advantage. CLM gives organisations an end-to-end view of all their contracts. The ability to track contract status, identify potential roadblocks, and access key information at a moment’s notice allows for data-driven decision-making. This visibility is invaluable in terms of understanding contractual commitments and identifying areas for optimisation.
Improving financial performance: boosting the bottom line
The cost benefits of CLM are no less impressive. By automating routine tasks and reducing errors, CLM minimizes administrative costs and inefficiencies. It also facilitates better contract negotiation with access to historical data and contract performance metrics. This allows organisations to have improved leverage points and negotiate improved terms, ultimately contributing positively to the bottom line.
Fostering collaboration: streamlining communication
Collaboration is the cornerstone of effective contract management, and CLM facilitates virtually effortless collaboration across departments. By allowing the sharing of information and monitoring of contract changes from a common platform, CLM keeps all stakeholders in sync at all points in the contract lifecycle. This simple communication eliminates confusion and accelerates the contract process.
Key features of a strong CLM system
A strong CLM solution, like Contract Insight offers a variety of functionalities with the intention of targeting particular issues in managing contracts. The functionalities include:
- Central repository for contracts: Secure place for the storage of all contracts and related documents
- Automated workflows: Enhanced procedures for every phase of contract lifecycles
- Version control: Track any changes and preserve existing versions of contracts
- Electronic signatures: Secure and speedy execution of contracts
- Reporting and real-time analytics: Create insights into contractual performance and commitments
- Integration with other systems: Seamless data flow between business applications
- Mobile access: Manage contracts from virtually anywhere, at virtually anytime.
Who needs CLM? (hint: probably you)
The question of whether or not a business needs CLM often comes down to the volume of contracts being managed. However, even smaller organisations can benefit from the improved organisation, risk mitigation, and efficiency gains that CLM provides. As businesses grow and the intricacy of their contracts increases, the value of CLM becomes more apparent. Industries ranging from healthcare and finance to technology and manufacturing increasingly leverage CLM solutions to enhance their contract processes.
Implementing CLM: a strategic move
Rolling out a CLM system is a strategic move that requires careful planning. The most important steps are:
- Needs assessment: identify current issues and establish objectives for CLM deployment
- Solution choice: research and implement a CLM solution that satisfies your needs and budget
- Implementation strategy: develop a detailed strategy with timelines, resources, and training
- Data migration: transfer existing contract data to the CLM system
- Training and adoption: train employees on working with the CLM system effectively
- Go live and monitor: deploy the system and monitor its performance
- Continuous improvement: Regularly audit processes and improve in necessary areas.
The future of CLM: AI & beyond
There is a bright future for CLM, with new technologies like artificial intelligence and machine learning that will reshape the contract management system. CLM solutions that use AI facilitate complex automated processes, such as contract review, risk assessment and obligation tracking, leading to greater effectiveness and risk reduction.
If you want to learn more about state-of-the-art contract lifecycle management software from Four Business that allows organisations to take command of their contracts. Our highly secure platform encompasses all the resources necessary to streamline CLM processes, mitigate risk, and unlock the full value of these critical business agreements. We work closely with our customers to understand their particular requirements and offer tailored solutions to drive success. We believe that contracts should be sources of strength and not stress, and we are dedicated to helping businesses make that a reality.
If you want to learn more about how contract lifecycle management can help with contract administration, book a free demo of Contract Insight – award-winning and widely acclaimed contract management software from Four. It’s free and risk-free, so what are you waiting for?
Contact John O’Brien, CEO at Four Business Solutions – global business consultants and software integrators specialising in business process improvement.
