5 Reasons Why Your Enterprise Needs a CLM Platform to Simplify Contracting

Modern legal departments are on a transformational path—one that focuses on strategic value creation for all stakeholders in the company and process efficiency. Cost management and risk mitigation are non-negotiable at this point. This in turn creates constant pressure to achieve agile, lean, and efficient legal operations. 

Since contracts govern close to 80% of business relationships, Contract Lifecycle Management (CLM) is an integral part of the legal transformation. Despite this, enterprises fail to tap into the full potential of contract data. 

Traditional contract management approaches, workflows, and tools are riddled with multiple issues:

• Insufficient collaboration between stakeholders

• Lack of a single source of truth

• Costly contracting delays

• Inadequate insights for decision-making

Enterprises today rely on new-age CLM solutions to resolve the aforementioned contract management issues. This trend is clear from a recent ACC Survey which indicates that 67% of Chief Legal Officers will invest in contract management technology in 2023. 

Intelligent CLM tools driven by Artificial Intelligence (AI) and Natural Language Processing (NLP) lead this quest for contract management efficiency. These solutions transform unorganized contract documents into structured enterprise data and insights that unlock faster revenue realization. 

Join us as we explore the main reasons why legal teams rely on Intelligent CLM platforms to streamline contracting processes. 

Reason #1: Organize your sizable contract portfolio

Modern businesses have sizable contract portfolios which make manual contract management close to impossible. For example, a Fortune 1000 organization can have up to 40,000 active contracts at a time for its operations. Revenue leakages, risk exposure, missed obligations, and subpar contractual outcomes occur due to the absence of proper contract lifecycle management in such portfolios. 

Intelligent CLM platforms ensure end-to-end contract lifecycle visibility and management to ensure the best contractual outcomes in enterprises. For instance, these tools provide highly customizable dashboards to monitor contractual performance and obligation management. Detailed consumption reports make it easier to track contractual utilization for timely negotiations.

Features like auto sorting based on contract types and status make it easier to organize the contract portfolio. Automatic extraction of contractual obligations is another noteworthy example.

Other ways in which intelligent CLM tools organize enterprise contract portfolios include:

· MIS with real-time insights into new MSAs and per-unit contract values 

· Advance alerts for upcoming contract expiries

· Deliverable fulfillment-based customer and vendor insights

· SLA monitoring

· Detailed, chronological audit trails for every contract

Reason #2: Reduce the overall time to contract

Maximization of contract value depends significantly on quick contracting process turnarounds. In this context, typical contracting processes can have over 40 “friction points” as per WCC’s Research. These bottlenecks bloat costs and delay projects. 

Enterprises can save 15% and more of the contract value with optimization and securing of the cycle. Other than such tangible benefits, these efficiencies speed up contract cycles and facilitate ease of business. Operational metrics that measure the effectiveness of contracting processes along with a CLM tool rollout can prove useful on this front. 

Legal teams rely on Intelligent CLM to reduce the time and costs spent on firefighting. For instance, SimpliContract’s clients report revenue gains when their team reduces authoring times by 40% with the aid of CLM tools. 

Prominent ways in which Intelligent CLM platforms shorten the time to contract include:

• Self-service contract request and authoring wizards

• Automatic redlining for faster reviews and negotiations

• Collaborative draft reviews and approvals using chat windows

• Contract turnaround time insights to identify repetitive tasks fit for automation

• Integration with Microsoft Word and Office 365 for faster authoring

Reason #3: Create a central repository for contract management

Legal professionals routinely wade through multiple sources in search of contract data. It is often spread across physical documents, Microsoft Word files, PDFs, enterprise apps, or even spreadsheets. Such environments are detrimental to decision-making due to the lack of a single source of truth. 

Distributed contract data introduces costly errors and unforeseen contractual risks. The Intelligent CLM model leverages a cloud-based central contract repository that prevents such issues. These repositories automate contract consolidation, classification, and retrieval of relevant information from across the business. Advanced AI capabilities make it possible to automatically import and tag third-party contract metadata.

Granular integration with enterprise applications means that accurate contract insights are available for users—anywhere, anytime, and across apps. Intelligent CLM capabilities ensure a single source of truth as well as knowledge management for informed decision-making. 

Advanced CLM repositories integrate AI- and NLP-enabled features like:

· Instant retrieval of smart, contextual information

· Comprehensive template and clause libraries

· Automatic contract consolidation from Microsoft Excel, documents, images, emails, and other digital files

· Version controls so that users always access the latest version

· Role-based access controls and compliance with global security standards 

Reason #4: Ideal start for your contract cycle’s digitization process

A CLM platform involves more activities than just an application rollout. For instance, visualizing your CLM project’s desired end state provides learnings that can be carried over to other legal or commercial process digitization projects.

The creation of the Business Requirements Document (BRD) is another case in point. It calls for structured synchronization between all stakeholders and the vendor’s team. These exercises call for coordinated exercises to determine contract types, templates, master data, integrations, and legacy data usage. This is why CLM implementation is a great starting point to start your enterprise’s digitization and legal tech journey.

Intelligent CLM platforms are ideal for the digitization and archival of all contract types. Some of these capabilities are:

• Workflow configuration options at the entity level, or even clause wise

• Creation of process transformation benchmarks and KPIs 

• Advanced OCR and Intelligent Character Recognition (ICR) features to digitize paper contracts 

• Seamless integration with enterprise apps like ERP, CRM, and procurement systems

• Features to upload and configure legacy data

Reason #5: Central management of all stakeholders

A contract is more than an exercise that involves just legal, commercial, procurement,  sales, and HR teams. Typically, mapping exercises reveal the involvement of stakeholders from across the enterprise (and often outside as well). Their involvement is essential for desirable contract outcomes—right from initiation to obligation management.

Traditional CLM tools tend to focus on just the buy- or sell-side of contract management. These are insufficient for the centralized management of stakeholders.    

Intelligent CLM solutions provide an end-to-end platform for collaborative contract reviews, approvals, tracking, and management. Made to measure dashboards and features like SLA monitoring enable corrective action and timely deliverables. These tools also empower users to define tasks, stakeholders, and deadlines. 

Notable stakeholder management features in Intelligent CLM platforms include:

· Contract approval stage previews

· Purchasing trends and invoice validations eliminate revenue leakages

· Supplier data access for reviews and negotiations

· 360-degree obligation and compliance tracking 

· Alerts for contractual events, milestones, and renewals

Have you tried a CLM platform in the past? We strongly recommend you take the plunge!    

Ensure enterprise CLM implementation success with the experts from SimpliContract. Learn more about how Intelligent CLM unlocks new possibilities for your business.