Discover the power of contract lifecycle management (CLM) in streamlining business processes. Simplify contract creation, negotiation, and much more with an AI-powered CLM platform.
According to Gartner, contracts govern almost 80% of a company’s transactions.
Contracts are a stepping stone for all business transactions. They enable businesses to establish clear expectations, assign responsibilities, and protect interests.
Whether a company onboards a new employee, wins a new customer, or procures office equipment – contracts are omnipresent. Simply put, contracts foster long-term partnerships and enable smooth operations. They contain the most sensitive information above all else.
And yet, most businesses still manage their contracts on hard copies, SharePoint folders, and Google Drive.
According to a report in the Journal of Contract Management, more than 70% of companies couldn’t find 10% of their contracts.
Sifting through endless piles of paper and tracking deadlines in spreadsheets is no longer a long-term solution.
Contract lifecycle management (CLM) is the process of digitizing and managing all your contracts under one roof. The value of centralized data, transparency, and security is worth its weight in gold when it comes to contracts.
Without a unified system to govern the entire lifecycle, businesses could face fragmented processes, delays, and critical information falling through the cracks.
These challenges are not unique to one industry or organization size; they permeate businesses across sectors, from startups to enterprises.
A robust contract lifecycle management solution offers increased efficiency, improved compliance, reduced costs, and better decision-making.
On that note, let’s explore how a CLM solution streamlines contracting across the lifecycle.
Contract Lifecycle Management (CLM) encompasses a series of critical stages that span the entire lifespan of a contract. From contract request to negotiation, organizations can derive more value from their contracts by effectively understanding and managing each stage.
Let's explore every stage of the lifecycle and discover how a CLM solution helps:
In the initial phase of the contract lifecycle, individuals or departments within the organization identify the need for a contract.
The contract request stage involves gathering essential information such as:
1. Purpose and scope of the contract
2. Key parties involved
3. Terms and conditions
4. Any specific requirements or obligations
With features like customizable request forms and automated workflows, a CLM platform can route the requests to the appropriate stakeholders for further action.
The contract authoring stage involves penning down the terms, conditions, rights, and obligations based on the request. The drafted contract includes several parameters such as:
1. Region/country
2. Category (Vendor, client)
3. Organization
4. Business Unit
5. Type of contract (MSA, NDA, SLA etc.)
A CLM platform boasts a repository of pre-existing templates and clause libraries to follow standard language. By including legal provisions and specifications, a CLM platform ensures clarity, accuracy, and enforceability.
Legal teams, SMEs, and other authorized individuals analyze the contract terms, identify potential risks or ambiguities, suggest revisions, and negotiate changes to reach a consensus.
Here's how a CLM platform can help with contract review and negotiation:
1. Inbuilt Collaboration Window
2. Redlining and Versioning
3. Automated Workflows
4. Role-based Access
5. Audit Trails
Contract execution involves obtaining signatures, ensuring compliance with legal mandates, and initiating the implementation of mutually agreed terms and conditions.
A Contract Lifecycle Management (CLM) platform plays a vital role in streamlining contract execution by enabling:
1. Electronic Signatures
2. Centralized Repository
3. Integration with CRM, SRM, and other 3rd party applications
4. Security
Businesses proactively work towards meeting contractual commitments, delivering products or services, and ensuring compliance.
By leveraging a CLM platform, businesses can:
1. Track obligations
2. Analyze key performance metrics, such as service levels, quality indicators, or financial targets
3. Manage change requests
4. Enhance dispute resolution efforts
As the contract nears its expiration date, organizations need to evaluate its performance and contemplate renewing or terminating the agreement.
The contract renewal process involves:
1. Reviewing the contract terms
2. Assessing the value derived from the relationship and
3. Negotiating any necessary modifications or extensions
Taking a proactive approach helps organizations maintain strong business relationships, capitalize on favorable terms, and seize new opportunities.
An AI-powered Contract Lifecycle Management (CLM) solution offers significant benefits to various teams within an organization, including Sales, Procurement, Legal, Finance, and HR.
Here’s a quick brief on how a CLM platform can help:
A contract lifecycle management platform provides sales teams with contract templates, pre-approved clauses, and standardized workflows, ensuring consistency in contract creation and negotiation. This empowers sales professionals to generate accurate contracts quickly, reducing turnaround time and eliminating errors.
CLM platforms also offer visibility into contract status and key milestones, allowing sales teams to proactively manage sell-side contract renewals, amendments, and upselling opportunities.
The in-house legal professionals are responsible for ensuring contract compliance and mitigating legal risks. A CLM platform provides legal teams with comprehensive contract management features including version control, clause libraries, collaboration window, and advanced search capabilities. This streamlines contract review and approval processes, enabling legal professionals to focus on higher-value tasks rather than administrative work.
The collaboration feature in a contract lifecycle management solution facilitates seamless review and negotiation among internal stakeholders and external parties. Automated alerts and notifications help legal teams stay on top of contract obligations, milestones, and renewals. By centralizing contract data and providing audit trails, a CLM platform can simplify compliance management and enhance risk mitigation efforts.
For procurement teams, CLM facilitates efficient supplier management and buy-side contract compliance. A CLM platform streamlines the entire procurement contract management workflow, providing a centralized repository for supplier contracts, enabling easy access and search functionalities. This enhances contract visibility, allowing procurement teams to track supplier performance, monitor compliance, and manage vendor relationships effectively.
With contract analytics and reporting capabilities, procurement teams can gain insights into supplier performance, pricing trends, and contract terms. This empowers them to make data-driven decisions, optimize supplier selection, negotiate better pricing, and drive cost savings.
SimpliContract’s AI-powered end-to-end contract lifecycle management platform helps Procurement, Legal, Sales, & Finance teams with automated vendor & client contract management.
Our platform streamlines the entire contract lifecycle with 3 modules – Contract Authoring, Contract Repository, and Contract Obligation Management.
Faster Contracting: Experience 40% reduction in contracting time.
Seamless Negotiation: Our inbuilt collaboration window allows both internal and external stakeholders to negotiate on contract terms in real-time.
Supports both customer and vendor contracts: SimpliContract automates and streamlines both buy-side and sell-side contracts from a central repository.
Avoids revenue leakage: Save up to 9% of your bottom line with SimpliContract CLM.
End-to-end platform: Unified platform for Legal, Procurement, Sales, Finance, and HR teams.
Real-time insights: Get instant information on contract details like expiration dates, payment terms, vendor performance, risks, milestones, and more.
Contracts have become more complex than ever before. They often involve multiple parties, non-standard languages, and complex legal terms.
Contract lifecycle management is no longer a luxury, but a necessity. An AI-powered CLM platform can significantly improve your contracting game across the lifecycle.
The future of CLM with AI, ML, and NLP holds the promise of a highly automated, intelligent, and agile contract management process. ML algorithms will enable CLM systems to learn from large volumes of contract data, allowing for predictive analytics that identify patterns, risks, and opportunities. Businesses can make data-driven decisions, optimize contract terms, and proactively manage contractual obligations.
NLP-powered CLM platforms will sophisticate semantic search, clause extraction, and risk assessment to expedite contract review and negotiation.
Ready to break the shackles in your contract lifecycle? Get started on your intelligent contract lifecycle management journey today.