The unprecedented business acceleration in the digital age has created the need for effective and efficient contract management. With growing complexities, it is imperative for companies to adopt smart tools that can aid in contract management and minimize risks. This is where Contract Lifecycle Software (CLS) steps in. However, selecting the right software can be a challenging task. Therefore, we present to you the Contract Lifecycle Software Buying Guide for 2024, which aims to simplify the decision-making process for procurement, sales, IT and legal professionals.

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The Changing Landscape of Contract Management

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Contracts are the backbone of any business relationship, and they need to be managed effectively to ensure smooth operations. With a myriad of contract types and varying stakeholder requirements, managing contracts manually becomes an arduous task. Hence, more organizations are now transitioning towards contract lifecycle software.

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_{What is Contract Lifecycle Software?}  

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Contract lifecycle software is an AI-powered CLM solution that automates and streamlines the entire contract management process in an organization. It minimizes manual work, increases efficiency & productivity for legal teams, sales teams, and others by automating the tasks concerned viz., create, negotiate, sign, renewing and reporting on specific contracting workflows.

Contract Lifecycle Management (CLM) software is designed to streamline and automate the entire lifecycle of a contract, from creation to execution and renewal. ‍

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Here are the key stages it typically covers:

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Initiation or request: This stage involves drafting and creating contracts. All stakeholders express views, expectations and get a chance to gather crucial details like amendments, renewals, etc. associated with a contract.

Authoring: It involves collaborating on and editing contract terms. The terms and conditions of the contract are put in writing by amalgamating standard clauses, counterparty information dates, and more.

Negotiation: Parties review contracts, workout terms and undergo various negotiation cycles before arriving at the final draft.

Approval: After evaluating the audit trail of the contract and reviewing the final draft, it is time for parties to approve the contract.

Execution: Once approvals are in place, the signing authorities sign the contract and make it active. Finalizing and signing the contract, often using e-signatures. Now all parties involved are legally bound to the contract terms.

Obligation: After the contract is executed, all parties acknowledge the preset deliverables, key dates, milestones, and other specific obligations.

Ongoing Management and Compliance: Monitoring compliance, tracking obligations, and managing amendments.

Renewals: Handling contract renewals and terminations. Before the contract expires, parties can choose to terminate a contract or go for a renewal and continue doing business with one another.  

Thus, AI-powered CLM (Contract Lifecycle Management) software solution provides a centralized repository for all contracts, allowing teams to collaborate and manage end-to-end contracting process from a single, unified platform. Users don't have to switch between multiple platforms/tools now. The AI-CLM platform enables better visibility, improved efficiency, and risk mitigation leading to enhanced contracting experience.  

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^{Who Uses CLM}‍

In this Contract Lifecycle software buying guide, you will find   verticals adopting AI-CLM software to boost productivity, align adoption with specific business objectives. The CLM software helps businesses enhance contracting workflow minimizing risks.

Contract Lifecycle Management (CLM) software can be incredibly beneficial across various teams within an organization. Here are some use cases for each team:  

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^{‍Legal Teams}

Contract Drafting and Review: Automates the creation and review of contracts using templates and predefined clauses, ensuring compliance and reducing errors.  

Risk Management: Identifies and mitigates risks by flagging non-standard terms and conditions.

Audit and Compliance: Maintains a comprehensive audit trail of all contract-related activities, ensuring compliance with legal and regulatory requirements.  

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^{Procurement Teams}

Supplier Management: Streamlines the onboarding and management of suppliers, ensuring all contracts are up-to-date and compliant.

Cost Control: Tracks contract terms and conditions to ensure adherence to pricing and delivery schedules, helping to control costs.

Renewal Management: Alerts procurement teams about upcoming contract renewals, preventing lapses and ensuring continuity of supply.  

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^{Finance & Ops Teams}

Budgeting and Forecasting: Provides visibility into contract commitments and obligations, aiding in accurate budgeting and financial forecasting.

Revenue Recognition: Ensures that revenue is recognized in accordance with contract terms, improving financial reporting accuracy.

Expense Management: Tracks contract-related expenses and ensures they are within budget, helping to manage operational costs.

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^{Sales Teams}‍

Contract Generation: Automates the creation of sales contracts, reducing the time and effort required to close deals.

Approval Workflows: Streamlines the approval process for sales contracts, ensuring faster turnaround times.

Customer Relationship Management: Integrates with CRM systems to provide a holistic view of customer contracts, improving customer service and relationship management.

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^{IT Teams}

Software Licensing: Manages software licenses and ensures compliance with vendor agreements.

Service Level Agreements (SLAs): Tracks and monitors SLAs with service providers, ensuring they meet agreed-upon performance standards.

Data Security: Ensures that contract data is stored securely, and access is controlled, protecting sensitive information.

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Each team can leverage CLM software to improve efficiency, reduce risks, and ensure compliance with relevant regulations and policies. If you have any specific questions about how to choose contract lifecycle software, feel free to ask!

^{Why CLM is a Must-Have in 2024}

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‍As per a recent Absolute Research report, the CLM software market is estimated to reach US$ 3276.5 million by the year 2029.

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With the rise of digitalization and the increasing complexity of business contracts, organizations are now realizing the importance of having a robust contract management system in place. The traditional manual process of managing contracts is not only time-consuming but also prone to errors and inefficiencies. This is where contract lifecycle software comes into play, providing a centralized platform for creating, negotiating, storing, and managing contracts throughout their entire lifespan. Not only does it streamline the process, but it also ensures compliance and reduces risk for an organization.

As per Contract Lifecycle Software buying guide, the following key considerations are a must when choosing a Contract Lifecycle Software:

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1. Functionality: The first and most crucial step is to identify your organization's specific needs and requirements. Look for software that offers features such as document creation, e-signature capabilities, collaboration tools, automated alerts and notifications, contract tracking, and reporting, analytics for insights.  

2. Integration: A good contract lifecycle software should seamlessly integrate with your existing systems such as CRM or ERP. This will not only save time but also improve data accuracy and accessibility.  

3. Security: Contracts contain sensitive information that must be protected at all costs. Make sure the software you choose has advanced security measures in place to prevent unauthorized access. Just like SimpliCpntract’s NextGen AI-powered CLM that takes care of all the security aspects of data confidentiality.  

4. User-Friendly: User–friendly interface, easy to use feature of the software is equally important as its functionality. You want a system that can be easily adopted by all team members without extensive training.  

5. Customization: Every organization has its unique processes and needs when it comes to contracts. Select the software that allows customization as per your specific requirements. See how SimpliContract’s NextGen AI-CLM software solution helps enterprises to tackle challenges with customized solutions.  

6. Scalability: As your organization grows, so will your contract volume. It's essential to choose intelligent contract lifecycle software that can handle an increasing number of contracts efficiently without compromising on key metrics.  

7. Customer Support: Having reliable customer support is crucial in case any issues arise during implementation or usage of the software.

^{Step-by-Step Guide to Purchasing CLM Software}‍

Get started with buying contract lifecycle management software by following steps:

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• Strategic Vision - Start by defining your vision for contract management. This could include goals like improving efficiency, reducing risk, or gaining better insights into your contracts. Your vision will guide your selection process and help you choose a solution that aligns with your long-term objectives.

• Unique Requirements - Identify your specific business needs. This could include the need for automation, integration with existing systems, compliance management, or advanced analytics. Make a list of essential features that your contract lifecycle management (CLM) software must have to meet these requirements.

• Involve Stakeholders - Engage all relevant stakeholders early in the process. This could include legal, procurement, sales, and IT teams. Their input can help ensure that the chosen solution meets the needs of all users.

• Budget - Determine your budget for the CLM software. Keep in mind that while cost is a significant factor, the benefits of an efficient contract management process can often outweigh the initial investment. Consider both the upfront cost and the ongoing costs for things like maintenance, upgrades, and user training.

Remember, choosing CLM software is not just about picking the one with the most features or the lowest price. It’s about finding a solution that fits your business needs, aligns with your vision, has the buy-in of all stakeholders, and fits within your budget.

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^{‍How to Select a Vendor for Contract Lifecycle Management Software}

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Once your specific requirements are defined, it is time to select a vendor. Contract lifecycle software buying guide recommends the following steps:

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• Research Vendors: Look for vendors that offer CLM software. Dive deep into listings like Clutch, GoodFirms, G2, etc. Also, see their Google reviews and ratings. Do attend conferences like ACC, WCC.

         Example: G2 customer reviews about SimpliContract’s AI-powered CLM software solution.  

• Evaluate Features: Compare the features of each vendor's clm software.  

• Assess Security and Compliance: Ensure the vendor's software meets your organization's security and compliance requirements.  

• Check Customer Support: Evaluate the vendor's customer support, including documentation, training, and support channels.   

• Read Reviews and Case Studies: Research customer reviews, case studies, and testimonials to understand the vendor's reputation and success stories.       

• Request Demos and Trials: Ask for demos and trials to experience the software firsthand.  

• Compare Pricing and ROI: Compare pricing models and calculate the potential Return on Investment (ROI) for each vendor's software.  

• Check Vendor Viability: Research the vendor's financial stability, company history, and future roadmap. Also, check their timelines to roll out.  

• Negotiate and Finalize: Negotiate the terms and conditions and finalize the purchase with the selected vendor.
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Additionally, consider factors such as:  

• User experience and adoption

• Customization and flexibility

• Integration with existing systems

• Scalability and growth potential

• Vendor reputation and customer satisfaction

By following these steps, you can make an informed decision when choosing a vendor for your CLM software needs.

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^{RFP Preparation: Evaluating CLM Software}‍

RFP (Request for Proposal) is a business document that comes out as an announcement about a project, raised by an enterprise (usually a large enterprise) soliciting bids from qualified vendors, potential contractors for a desired software solution. The RPF specifies the client’s requirement, the evaluation criteria towards vendors’ proposals.

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Steps Involved in RFP Preparation are:

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1. Draft Questionnaire: Should be tailored as per business requirement. Categorize adequately; include categories for features, pricing, customer support. Provide the vendor with all the relevant data along with the RFP and mention the deadline.

2. Assessment: Get a scoring template, either create own or avail of ready-to-use scoring template for vendors’ RFP comparisons.

3. Schedule Demo: Invite end users, IT teams, executives, all stakeholders and schedule demos for them. Keep recordings of the demos for future references.

4. Selecting the Final One: This phase involves contracting and negotiating with the chosen vendor. An agreement is signed between the client and vendor and the contract is sealed and rolled out.

^{Final Thoughts}  

Investing in a contract lifecycle software is an important business decision that can have a significant impact on your organization's operations. By considering the key factors mentioned in this contract lifecycle software buying guide, you can choose software that best fits your organization's needs and sets you up for success in 2024 and beyond. Don't wait any longer; streamline your contract management process today!  

Learn how Contract Lifecycle Software can enhance your contracting journey and boost business goals.  Contact one of our solution experts and book a demo.

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