Streamline your contract lifecycle

Gartner defines contract lifecycle management (CLM) as the “applications used for managing contracts from initiation through ongoing management and eventual renewal or termination.” In simpler terms, contract lifecycle management refers to the methods you use to prepare, sign, store and act on your business agreements. Read this article to learn more.

Contract lifecycle management systems are software applications that help organisations and departments manage contracts more efficiently. Unlike manual document management strategies, CLM systems are built to help you store and find contracts, supplier information, standard contract terms and contract templates with ease.

The cost of inefficient contract management is estimated to be more than  9% of total annual revenue according to WCC – a great starting point to build a business case for Contract Lifecycle Management. A strong CLM solution can help an organization achieve key business outcomes such as accelerating time-to-revenue, increasing workforce productivity, reducing hard costs, preventing contract value leakage, enabling compliant self-service capabilities and enhancing the ease of doing business.

An important part of analyzing contract lifecycle management (CLM) workflows is breaking that lifecycle down into recognizable steps. The five crucial stages in a contract’s lifecycle are document generation, negotiation, routing, approval/signature and storage.

The cost of inefficient contract management is estimated to be more than 9% of total annual revenue according to WCC. Agreement processes are also oftentimes opaque and time-intensive, and the added inefficiency of these processes lengthen time-to-value of contracts. Inefficient contract management also makes it difficult to track vendor contract overspend across the organisation. Furthermore, contract processes are prone to human error and introduce various types of risk: incoming contracts might contain language that puts an organisation at high risk or even stop progress on a deal. With contract AI capabilities and analytics, you can reduce risks, accelerate negotiations and amplify team’s performance.

Effective contract management can help businesses save time and money, minimise risk and boost sales potential. There are many benefits associated with digital contract management. It allows businesses to get deals signed and underway far quicker than in the past, while increasing contract content visibility. This leads to increased efficiency of document processes, which saves on employee time costs and improves time-to-value of sales contracts. AI-powered CLM software can also ease the pressure, freeing you to focus on more interesting and productive tasks. What’s more, it can help identify new opportunities and risks that might otherwise have been hidden.

One thing that is unique about the contract process is that it involves multiple departments across the organization. However, the systems each of those departments uses aren’t often connected to one another. For example, an HR offer letter initiates in HR (HCM), and before it can be sent, finance might have to approve it (ERP). And once signed, IT must provision the new employee (ServiceNow). If these different systems are not connected, it can result in a lot of duplicate work (and potential for error) as information from contracts is re-entered into each system. DocuSign CLM system integrates with the applications you already use such as Salesforce, Coupa or SAP Ariba. Find out more.

With DocuSign CLM, you can store, tag and organise contracts in one searchable place that’s built specifically for contracts. This makes it easy to locate existing agreements quickly, report on status and extract insights that reduce risk and improve business function.

Once a contract is generated, changes or editing often need to be made as a part of the contract negotiation process, before the final version is ready for signature: this is the contract redlining proces. The objective is to produce a final document which satisfies all parties. The term redlining comes from the historical and manual way of editing contracts, using a red paper on paper.

Contract management system like DocuSign CLM allows you to send contracts for review, track changes across multiple versions, and maintain an audit record of who did what, when. It also helps you store, tag and organize all contracts in a single, searchable place, with granular permission controls. With a strong CLM software, you can create workflow and contract reports to uncover insights and monitor all contract processes.