Contracting is one of the most complicated business processes. It requires multiple systems of record, workflow automation and advanced reporting capabilities.
Inefficient contracting processes lead to missed revenue opportunities, time waste and costly errors. The key to improving your contracting process is implementing a CLM solution. The right platform can provide the functionality, visibility and efficiency your teams need.
Identify Your Needs
Just like you wouldn’t try to cook a full meal without first measuring the ingredients, it is essential to determine your Contract Lifecycle Management goals and processes in order to find areas for improvement. This will help you to avoid costly mistakes and get the most out of your investment.
A common mistake is purchasing a contract management solution that doesn’t match the needs of your company. Many companies go wrong by selecting a software option with all the bells and whistles, thinking it will save time in the long run. The reality is, it may end up costing more money, as well as causing a lot of frustration and inefficiency.
It is also important to choose a solution that integrates with your line-of-business systems, such as CRM, sourcing and procurement, to enable no-touch contract creation based on defined business rules and bulk data upload. This can reduce legal operating expenses and speed up contract cycle times.
Lastly, you should look for tools that automate and track review progress so that contracts don’t fall through the cracks. Contracts that miss their expiration dates can create unnecessary financial, legal and procurement risk. On the other hand, contracts that automatically renew without a proper opportunity to renegotiate can lead to unfavorable terms and pricing for both parties. By implementing a best-of-breed CLM solution, you can ensure that your contracts are accurate, up-to-date and compliant.
Analyze Your Existing Processes
Contract processes often have a lot of moving parts. This is particularly true if you have multiple stakeholders involved in the drafting, negotiation, approval and monitoring stages of your contracts.
To get the most out of your CLM solution, you’ll need a system that can help streamline these processes and minimize the risk of error or missed deadlines and signatures. This requires a thorough analysis of your current contract workflows and identifying opportunities for improvement.
This process can be time-consuming, especially if you’re working with a manual document management system. You may have to searchs for documents, open them and manually input or copy and paste datas into your contract templates and contracts. This could lead to inconsistencies and delays in the contracting process which can impact your business ability to deliver goods or services on time.
A best in class CLM solution will have built-in features to simplify your processes. For example, a no code platform will make it easy to create new template and contracting workflows for your team with just a few clicks. You can also configure your workflows to meet specific business needs, such as supply chain issues or rising demand for a service.
A good CLM software will also includes a robust set of reporting tools that can easily identify inconsistencies or areas for improvement. You can use reports and dashboards to track your contracting processes and productivity, establish KPIs and benchmarks and gain a clear understandings of your business contracting processes.
Determine Your Technology Needs
The contracting process is complex, and many businesses struggle with the Contract Lifecycle Management workflows. Inefficient processes can leave money on the table during intense negotiations or create financial, legal, and procurement risk. Missed contract dates can create a pileup of documents, while contracts that automatically renew without giving the business a chance to review or renegotiate the terms can cause cost spikes.
The best way to improve these processes is with contract management software. These systems help streamline the process and increase collaboration. They also make it easier to track contracts and ensure all parties are aware of contract terms. The most effective systems have features like a centralized document repository, automated reminders, and real-time reporting. The first step to finding the right system is to determine what your company needs.
Many companies look for the system with all the bells and whistles, but they can end up wasting time and money on software that’s too complicated to use. The system you select should be easy to learn and implement. It should be able to handle the volume of contracts you have, and it should integrate with other systems.
You should also look for a vendors that offer responsives customer support, especially when you’re new to the system. Choosing a system that doesn’t have customer support can be a disaster.
Select a Vendor
Choosing the right contract management solution is critical for your business. As the market grows, the number of vendors has increased dramatically and it can be difficult to distinguish between solutions. Some have emerged as leaders by excelling in one aspect of the process, such as document generation, or by catering to a specific contract type or contract stage. Others have entered the space from adjacent legal domains, such as matter or spend management.
The simplest way to begin your journey is to select a vendor that specializes in Contract Lifecycle Management (CLM) rather than a single component such as eSignature software. CLM platforms offer a more comprehensive approach to managing contracts than traditional methods including streamlined document production and automated workflows that reduce time and manual effort.
In addition to accelerating document production, CLM provides tools for centralized collaboration and editing. This eliminates the need for back-and-forth email exchanges and allows real-time redlining to speed up negotiation cycles by 50%. It also helps ensure that all parties are working from the most current version of a contract, minimizing risk and costly mistakes.
Once a contract has been executed, it can be used to track performance and compliance or to leverage contractual obligations against a budget. It may also be amended through addendums or joinders and finally terminated through the process of offboarding or renewal.
