CLM Meaning and definition: everything you need to know
What is CLM (Contract Lifecycle Management)?
In this article, we uncover the meaning of CLM and how it helps with contract management. CLM stands for contract lifecycle management which streamlines the contract process.
Contract Lifecycle Management
Contract Lifecycle Management (CLM) is the process by which an organisation can improve the way it manages the lifecycle of the contracts and agreements it creates and deals with. This can include vendor contract management, third party contracts, customer contracts, sales agreements, intellectual property agreements, employment contracts, non-disclosure agreements, employment contracts, value or outcome based contracts and all other types of contracts and agreements.
Effective contract management can help businesses save time and money, minimise risk and boost sales potential. The Forrester State of Systems of Agreement 2019 research found that inefficient or manual agreement processes create problems for 98% of organisations.
If you can increase productivity in managing contracts, you can get deals signed faster and free up time to deal with other business matters. During the contract life cycle, the steps involved with processing require multiple tasks and usually include individuals from several departments. The exact requirements of each contract vary based on the organisation involved and are particularly influenced by the company’s size.
Read on to find out almost everything you need to know about contract management and contract lifecycle management software.
What is contract management?
Contract management has several elements involved in the management of agreements between an organisation and its suppliers, vendors and customers. Contract management can include contract creation, execution, and analysis to maximise your business’s operational performance and cut financial risk. Discover more about contract management trends. Contract management software helps streamline and digitise how legal agreements are managed to make the contract process more efficient. CLM software can bring a number of advantages, including:
- Increasing efficiency and reducing the costs of generating, reviewing, approving, signing and renewing contracts.
- Superior risk management capabilities versus manual processes.
- Contract management enables key staff like sales and legal teams to concentrate on critical tasks rather than contract management admin.
- An easy to access contract repository - often allowing cloud-based contracts
Contract management for large businesses
Large businesses tend to have different demands and requirements for contract management. They need a secure document and contract management platform such as DocuSign CLM to generate documents, collaborate with stakeholders, and automate business processes to accelerate the path to revenue - all while keeping things accessible yet secure.
It can often help larger businesses to consider breaking the contract lifecycle into a step process which helps to simplify the generation of contracts, administration, execution, management of contracts and storing of all necessary documentation.
Contract management for small businesses
Contract Lifecycle Management is essential for all companies, not just the larger ones. Smaller organisations often need to be more agile and work with smaller budgets and teams, forcing them to do more with less. This can often mean that manually generating, sorting through or managing agreements is a waste of time and money that could be better invested elsewhere.
This was part of the thinking behind the recent launch of DocuSign Gen for Salesforce, an easy-to-use app that allows sales reps to automatically generate polished, configurable agreements with just a few clicks - saving employees time while eliminating errors. Importantly for smaller and medium-sized businesses, apps like DocuSign Gen for Salesforce are easy to set up and are admin-friendly, saving time and hassle as reps get up and running without professional services.
Benefits of contract management software
There are many benefits associated with digital contract management. It is faster, allowing businesses to get deals signed and underway far quicker than in the past.
- It is cheaper, saving both time and money.
- It is more efficient: perhaps most notably, the best CLM solutions leverage workflow automation capabilities that allow businesses to configure automated workflows based on different contract types, with new workflows automatically triggered based on the document activity and contract cycle stage.
These benefits can help keep a deal on track by sending the contract to the right people and reminders when actions are required, helping to prevent bottlenecks.
Digital contract management is robust and confidential; good contract management software will offer a secure audit trail. This is a crucial advantage of contract management with DocuSign, which allows you to track your documents through every step of the process.
Additionally, using an electronic signature platform will maintain a complete, automated history of every activity, including viewing, printing, sending, signing or declining to sign a document.
Contract Management Lifecycle - best practices
Implementing contract lifecycle software can help teams to follow contract management best practices. There are a number of elements to keep in mind when choosing a Contract Lifecycle Management software solution.
- Flexible, configurable workflow - can you amend the workflow according to your organisation’s needs?
- Seamless document generation - The right documentation generator can help you automate the creation of sales agreements.
- Can you quickly locate documents? - There should be a centralised, searchable repository.
- Support for collaboration and negotiation - Does the solution allow several team members and customers to collaborate and negotiate seamlessly?
- Clause library - can you automatically add common legal clauses to agreements with ease?
- Rich integrations - can the system integrate with your current systems?
- Does the solution have best-in-class security
Summary: Contract management
Here’s more on how to hit the ground running with CLM. Contract management through tools like DocuSign Gen for Salesforce and DocuSign CLM can help companies achieve these best practices. It’s about much more than saving money and building efficiencies: it helps your organisation save time and frees up the resources of key staff to expand your business.