What to look for in your CLM (contract lifecycle management) solution

Written by: Charlie Cowan, Strategic Enterprise Account Executive at DocuSign

As your organisation continues to digitally transform its agreement processes beyond simple e-signature, a natural next step is contract lifecycle management (CLM).

As with many three letter acronyms like CRM (customer relationship management) and HCM (human capital management); CLM is used as a generic term with every organisation likely to have their own interpretation of what it means. To clarify, contract lifecycle management is technology that helps you to manage the lifecycle of your contracts.  This can include features such as:

• Drafting new contracts from pre-agreed templates
• Populating contracts with data from source systems like products, contact details and pricing
• Managing workflows to get internal approvals on contracts
• Managing negotiations and redlining with third parties like suppliers or customers
• Comparing versions of documents so no changes slip through the net
• Providing standard and fall back clauses to ensure negotiations follow company policy
• Managing the signing process electronically
• Updating source and destination systems once contracts are signed
• Managing obligations throughout the lifecycle of the contract
• Central storage and ongoing analysis of your contract estate

A CLM platform should allow you to get from a “Yes” to a “Done” without any paper, printing, scanning, errors or out of policy contracts.  

More importantly, it should enable you to get your contracting process completed faster so you can get on with enabling your customer, onboarding your employee or purchasing from your supplier—tasks that really add value to your business.

Your point of view determines your CLM approach

Now you have decided that you need to bring some automation to your contracting process, you must decide on a short list of possible providers—and your choice is very much driven by your point of view.

Siloed CLM

Many CLM projects are initiated at a business unit or functional level:

• Sales have implemented CRM and want to speed up customer contracting
• HR have implemented a Human Capital Management (HCM) system and want to improve the candidate experience
• Procurement have implemented a sourcing system and want to accelerate supplier onboarding
• Legal have implemented a Matter Management application and want to extend to third party contracting

For each of these teams a natural first place to look is the provider of their System of Record, their CRM, HCM, sourcing tool or matter management platform—as many of these technologies have added a module that covers some or all of the core CLM functionality.

Areas to be wary of: as mentioned above, CLM is a generic term that can be used to cover a wide range of products. Often a “CLM module” bolted onto a core application might only provide a basic workflow for managing a contract process and miss crucial CLM features like clause libraries and risk assessment.

Some of the benefits of this approach can be: 

• prebuilt integrations
• familiar administration and set up processes
• often you might have the CLM module bundled into your contract already

Organisational system of agreement

The challenge arises when, as an organisation, you try to bring some consistency and logic to your corporate wide contracting processes. This is because you do not have a standard contracting framework across functions, countries or business units, as each team has developed their own tools and workflows.

For legal or IT departments it is difficult or impossible to manage consistent processes, clauses or repositories company-wide.

Instead, you might choose to separate out what we call your “system of agreement” from your systems of record - your CRM, HCM and so on.

In doing so you can start to create company wide agreement processes that each region, business unit or function can utilise and embed into their own core process.

Examples of this might include:

• Company wide templates for NDA’s, MSA’s and Anti-Bribery policies
• Company wide clause libraries with pre-approved standard and fall back clauses
• Company wide escalation paths for non-standard terms
• Company wide policies for assessing third party contracts
• Company wide storage and management of signed agreements

The benefits of a central system of agreement become even more powerful when new functions or divisions ask to come on board or implement new systems of record.  

You can deliver to them a pre-defined system of agreement, preloaded with your corporate templates, clauses and policies - freeing their time up to implement and manage their system of record and its core processes.

Siloed CLM or organisational system of agreement

As you embark on your programme it is worth considering your point of view—are you considering your own requirements within a line of business or function, or are you looking at the challenge from an entire company perspective?

Are you looking at the project from a relatively short term perspective, or are you considering how the entire organisation might handle digital agreements in five or ten years time.

Consider who might need to be involved in a programme to deploy an organisational system of agreement, how a programme like that might be phased and how you might be able to cross charge elements of the programme into the business units or functions.

At DocuSign, our Customer Success Architects help organisations to develop these strategies.  They help plan out company wide CLM programmes and guide you to build the right internal teams and processes to deploy and manage successful systems of agreement.  Find out more by contacting your DocuSign representative or speaking to one of our experts.