Decoding Contract Lifecycle Management a Comprehensive Guide

What is contract lifecycle management?

Contract lifecycle management (CLM) is the systematic management of contracts from inception through execution to renewal or termination. It encompasses several stages, including contract creation, negotiation, approval, execution, and ongoing oversight.

CLM is pivotal for organizations seeking to streamline and optimize their contract processes. By leveraging specialized software solutions, CLM ensures contracts are drafted accurately, negotiations proceed smoothly, and compliance is maintained throughout the contract's lifecycle.

Key functionalities of CLM software include customizable contract templates, automated workflows, electronic signature capabilities, and centralized contract repositories. These features empower businesses to enhance visibility, enforce adherence to contract terms, mitigate risks, and maximize the value derived from contracts.

In essence, contract lifecycle management offers a holistic approach to managing contracts, enabling businesses to improve operational efficiency, mitigate risks, and drive favorable outcomes.

Contracts are the lifeblood of every firm. Employment conditions, company partnerships, and a plethora of other crucial business issues are all governed by contracts. Simply explained, contracts are the foundational elements of all economic activity and commercial operations. They are the atomic unit of trade. A contract management tool can help parties collaborate more easily, gain the necessary insight into contract data, and save time and money with very little risk. It is thus in the interest of all organisations to ensure that the contract system and processes of the organizations run smoothly.

A study once claimed that organizations could lose out on $100 billion in annual savings because of inefficient contract management software. It follows that using a system for managing contracts that also handles tracking and negotiating is preferable, as a contract management tool can help speed up processes, reduce errors, ensure collaboration, and gain the necessary insight into contract data, thereby saving time and money with reduced risk.

CLM, the organisational process: CLM means contract lifecycle management and it comprises organisational processes, policies, people, and tools within it. The main stages of a contract include contract creation, contract negotiation, contract approval, contract execution, contract storage, and contract management and analytics. These represent the internal system that manages all activities relating to contracts, which includes generating, administering, sharing, and archiving corporate contracts. contract lifecycle management (CLM), thus includes generating, administering, sharing, and archiving corporate contracts using internal resources, processes and tools operated by people. It is the process of managing agreements made with clients, suppliers, partners, or workers through each stage of the cycle.

CLM, the software: It is the process of digitally managing agreements made with clients, suppliers, partners, or workers through each stage of the cycle. Any digital platform designed to handle contracts throughout all phases of the life cycle is called CLM software. In-house legal departments and their business users can automate management procedures and derive process efficiencies as well as business analytics from their contracts using CLM tools. These tools can enhance legal contract lifecycle management.

Automating the contract processes - this includes streamlining processes, automating creation and execution, and implementing technology solutions that can improve efficiency, save time and resources, and reduce errors and costs – leads to reduction of manual efforts, and repetitive tasks while speeding up processes, thereby giving less time and cost efficiency. The secret weapon of any company may therefore potentially be contract lifecycle management Software.

Some businesses concentrate on a particular contract stage or function, like document generation, while others concentrate on a particular contract type. Yet more people have transitioned from related legal fields, like matter or spend management, into contract lifecycle management. Not all CLM tools are created to address the pricy and challenging issue of how to create a contract in the first place. Streamlining and automating tedious, repetitive work so that in-house lawyers may spend their time negotiating agreements, working with colleagues on terms, identifying risks, and serving as strategic allies to the company are also benefits of the automated CLM system.

Not all CLM software implementations are carried out to address the challenging issue of how to create a contract. Streamlining and automating tedious repetitive work so that in-house lawyers may spend their time negotiating agreements, working with colleagues on terms, identifying risks and serving as strategic allies to the company are also benefits of the automated CLM system. Some businesses concentrate on a particular contract stage or function, like document generation, while others concentrate on a particular contract type. Yet more people have transitioned from related legal fields, like matter or spend management, into contract lifecycle management.

Targeting specific CRM and ERP customer categories was a common marketing strategy for CLM technologies. For instance, some CLM software specifically catered to Salesforce users since they were aware that these users were already keeping track of prospects in a CRM and that this information could be incorporated into contracts.

What are the stages in the contract lifecycle management process?

In order to achieve maximum benefit and ROI from the technology, it is recommended to adopt a simple 3-layer plan to make it simpler to analyze the requirements of the organisation, the peoples pain points and concerns, the contract workflows, policies and processes. Managers and teams can spot broad patterns and pinpoint areas for improvement because the entire process is broken down into recognizable parts, and then, basis the need analysis, settle on a plan to go ahead.

Contract assessment & planning stage

Before putting a process into place, it's crucial to create a system that will best meet the requirements and resources of your business. It's also critical to create company-wide contract management systems to keep things simplified and organized. Your contract management strategy is a flexible road map made up of procedures that take into account every sort of business agreement, from common employee contracts to the paperwork associated with extremely complicated and specialized deals.

In this stage, the pain points, blockages and bottlenecks are identified in the inhouse legal departments contract related processes, and an analysis is done of where things are getting stuck, where losses or leakages are happening, and specific action areas are identified. Make sure everyone involved comprehends your vision and goals at this stage, and feels at ease using the technologies they will be using. This will prove to be an essential component of your implementation plan later on - as an early buy-in by the end-users immeasurable speeds up the implementation.

CLM implementation stage

After outlining your contract management procedures, you must put your plan into action before you can begin implementing it. This could entail moving your contracts to a centralized repository as a starting point, and implementing contract administration software to assist you in carrying out contract-related duties – or, if the need for contract creation is of greater importance, setting up an automated contract request and drafting process.The specifics of the process of implementation, therefore, depends on the pain points identified in the organisational assessment phase above.

CLM training & adoption stage

Making sure everyone involved feels at ease using the technologies they will be using - something we did in the first stage – is what eases the final stage, that of ensuring user adoption so that the tool can deliver on its potential and promise. Usually, even after buying and conditioning of the users, a solid well planned strategic training programme is usually an essential item on the checklist. This is normally followed by a phased adoption where the key influencing users first shift to the new technology, followed subsequently by the rest.

Phases of the CLM:

To make it simpler to analyze contract workflows and processes, contract management is divided into distinct stages. Managers and teams can spot broad patterns and pinpoint areas for improvement because the entire process is broken down into recognizable parts.

Pre-contracting

This is the phase that exists before even the contract, any contract, has been requested. It refers to the interface between the legal department and the other business functions. In practical terms, it refers to the stage wherein legal makes an effort to blend in, and understand the requirements of the other functions, to understand their goals their vision and mission, and their strategy. The contract then should become a vehicle for all of those goals and strategies; the contracts aren't the job themselves.

Finding the appropriate contract type, inputting the necessary data, and possibly making a few adjustments might be all that is required for typical cases to complete this stage. It can be necessary to create a brand-new document in more complicated or uncommon contracting conditions. Looking at prior agreements that may be suitable and altering those provisions might make creating a contract from scratch easier.

Contract requesting

The contract lifecycle begins with a contract request, which may be in an emailed form, a written request, or a message on some online platform that is initiated by one of the constituent parties. As these requests are received through a multitude of mechanisms, this can also serve as the starting point of your process reorganization, as the organization can easily channel the request mechanism through a specific portal, typically using some form of automation, at the cutting edge of which comes the contract lifecycle management software.

Contract drafting

Next comes putting the contract together – which in a manual system entails painstakingly identifying each segment of the contract, the deliverables, the deadlines, party details, and more, and then putting it together, to draft the entire contract's terms, conditions, and provisions, ensuring accuracy and compliance with legal requirements. This is where technology comes into its own, as templates with standardized clauses that cover the key aspects can be created, leaving only the specific conditions of each contract remaining to be filled in, reducing time and effort.

Contract negotiation

The negotiation stage is perhaps the most vital phase from both a legal as well as a business perspective, given that it involves discussions and revisions between the parties to reach a mutually acceptable agreement, with lawyers reviewing, modifying, and bargaining the contract terms on behalf of their clients. In this stage, technology is available that can provide a unified platform to negotiate in real-time in some select CLM software like RazorSign. However, business realities dictate that some back-and-forth does occur as each party discusses and revisits its position internally.

Execution of contracts

The execution stage is at times subdivided into 2 parts of approvals and signatures. Depending on the contract, the approval stage may be single or multi-level, as authority, budgets, sanctions, and policies need to be checked before the approver can sign off on the final version. The more complex contracts have multiple approvers. And then comes the coup-de-grace, the signature process itself. While in a manual system, this can take time, within the secure walled confines of a CLM platform, this can provide perhaps the biggest time, money, and effort savings, as automated workflows take care of even the most complex approval process, while e-signatures can ensure real-time execution including stamping of the contract if required.

CLM storage

Of late, this is a stage that has garnered more and more attention, as the proliferation of contracts, their clauses, their types, the governing regulations, etc has necessitated a shift from the old, localized filing cabinet or individual drive storage mechanisms. The complexities of modern business have brought acute focus on the access to organizational contracts to facilitate their easy tracking and management – bringing to the fore the utility of the secure cloud storage, the contract repository, where all organizational contracts and their related documents are stored in a central location.

Contract management

This phase involves managing the contract and its deliverables throughout the contract's validity. The focus lies on actively monitoring and managing its performance to ensure adherence to obligations, deadlines, and more, including overseeing compliance, resolving conflicts, and enforcing contractual terms when necessary. As the contract approaches its end date, the parties evaluate whether to extend, modify, or terminate it. This phase entails assessing its performance, contemplating potential adjustments, and taking appropriate measures accordingly.

The ultimate stage involves conducting a thorough audit and analysis to gauge the contract's effectiveness. Legal professionals examine its overall performance, pinpoint areas for enhancement, and gather valuable insights for future contracts. In this phase, an excellent CLM tool can provide AI-based insights, task management & allocation, reminders, and more that tend to simplify the workload of the entire in-house legal teams in managing the entire contract body.

Contract management terminology

• Contract management app/updates: This applies to the downloaded mobile application of the software. While the cloud-based programmes of the CLM are updated automatically, needed no action on the part of the client, a mobile application needs to be updated on receipt of update information to the system administrator in your organisation. These updates are vital, as they constitute additions, changes and alterations that are required for maximum efficiency.
• Contract management workflow: Workflow for contracts refers to all the steps an organization takes to create and properly carry out a contract. Every stage of the process, including conception and authoring, negotiation and approval, execution, and renewal or termination, has a defined workflow. In other words, the process of creating a legal document from scratch, through each necessary step, through signature and execution is known as the contract workflow. Although legal teams should have control, contracts touch many different teams within the company. They do not operate in a vacuum. Contracts must be an enabler rather than a hindrance for their input and approval to be easily obtained. Contract creation, internal Collaboration, external negotiation and red lines, approvals, and electronic signing are all examples of steps that take place before execution. It refers that for contracts refer to all the steps an organization takes to create and properly carry out a contract. Every stage of the process, including conception and authoring, negotiation and approval, execution, and renewal or termination, can have a defined workflow.
• Contract e-signature: A principal employee or someone with signing authority can sign a contract following approvals. In a world that is becoming more mobile and digital, contract lifecycle management software systems that provide user-friendly and reliable electronic signature software can make it simpler to sign contracts at home or on the move, individually or in mass. On the other hand, manual "wet signatures" take a lot of time and are ineffective.
• Contract integration: While contracts are prepared by legal teams, they originate in other functions like procurement and sales, to name a few - all of which have their own internal technology platforms / systems / subsystems. Integration refers to securely connecting these systems with the CLM, so that they can “talk” to each other - for example, generation of a sales contract request from within a CRM. It is simple to integrate contract management API with your current business tools, like ERP, CRM, and ITSM, to mention a few. You'll deliver enhanced productivity, accuracy, and business intelligence while ensuring a single source of truth for all of your data through integration.
• Contract negotiation: Contract parties negotiate the framework of specifications created while drafting contracts during the contract negotiation stage, which is undoubtedly one of the most important aspects of the contract lifecycle. Term and condition agreements are the results of back-and-forth redlining and collaboration, and they give parties to a contract a clear understanding of what is expected of them. To correctly establish a contract, contract lifecycle management enables the participation and communication of many contract parties. Teams can utilize CLM software to track the success of the negotiation processes, identify areas for improvement, and employ strong collaborative capabilities and audit trails.
• Contract obligation management: After the contract is signed, each party formally accepts their roles as well as any milestones, key dates, deliverables, payment windows, and other specific contract obligations. You should keep track of job assignments, task escalations (to ensure timely task completion), obligation key dates, obligation milestones, task approvals, cost management, and more when managing contract obligations. As a result, a centralized, one-stop CLM system for managing contract responsibilities aids in preventing contract violations and other potentially dangerous outcomes.
• Contract redlines: Redlining is the process of amending a contract when two or more parties are negotiating or working together. A single document that satisfies all stakeholders is the intended outcome. You may redline contracts in real time with a cloud-based contract management service like RazorSign. To maintain version control, your legal team won't have to bother about transferring physical copies back and forth. That could shorten the time it takes to negotiate a contract by days or even weeks. Incidentally, the word "redlining" refers to the first, manual method of contract editing that used printed papers and red pens. One party would take the document and make changes by underlining and erasing words. The following editor would then do the same thing with this document. Everyone could easily observe the precise adjustments that were performed thanks to the red ink. Everyone would eventually settle on a single draught of the document. The final agreement was then created using a clear document. The procedure is a lot easier now.
• Contract templates: In recent years, more businesses have resorted to specialized software solutions like contract lifecycle management software to assist in the creation, evaluation, approval, and execution of their business agreements. The availability of a clause and template library is a crucial differentiation in CLM Technology platforms like RazorSign. A common set of sections, clauses, text, and placeholders for terms and conditions is known as the CLM template. Structured data can be combined with templates to produce agreements or proposals. Quotes and contracts are created using templates, which are kept in a template repository. You could think of a template as a model or mold for making distributable documents.
• Contract versioning: Version management for contracts is crucial since working on the incorrect version of a contract can lead to confusion and legal problems. The user that uses the intelligent repository can move a folder or file from one place to another. The branch can then construct two different copies of the same file by pointing to the original one in its history. You will spend much less time and effort as a result. You may automatically keep track of variations between the forked files using CLM software. The system accomplishes it for you in a form that is simple to read rather than requiring a time-consuming manual review to locate the changes.
  
  To make sure that parties are studying, discussing, and signing the correct copy of the contract, it is necessary to manage various versions of the document. This entails keeping track of the modifications made to a contract, whether made to the original document or a new one, and making sure that the versions are stored safely. Version management for contracts is crucial since working on the incorrect version of a contract can lead to confusion and legal problems. The CLM software has built-in version control that enables you to clone a certain file version and make changes to it without impacting the original file. Creating "branched" files or "branching" files is what this is known as.
  
  Poor contract versioning can have detrimental effects on the entire contract lifecycle, from contract drafting through contract reporting. If counterparties sign the incorrect version of a contract, the contract owner may be held legally responsible for conditions they did not mean to accept. The possibility of preserving the incorrect version of a contract and subsequently reporting on the incorrect contract data exists. This could imply a breach of contract or even the failure to fulfil contractual responsibilities. You would anticipate firms to be aware of their contract versions given the dangers of inefficient contract versioning - it's not always that simple, especially in a manual system!
• Contract repository: Software for contract repositories serves as a central repository for contracts. It encourages firms to stop keeping contracts in email inboxes and filing cabinets. Instead, contracts are stored in a solitary, safe database using contract repository software. This is a centralised, digital storage system with access control and full security to prevent unauthorised access. This facilitates easy real-time access to the authorised personnel, speeding up internal processes. The phrase "contract management repository" is becoming increasingly commonly used in the business as a result of the development of specialized contract management software. In support of your overall CLM strategy, it describes how and where you store, arranges, and retrieve all your contracts and documents. A flexible solution that you may modify by your CLM model is what you should consider when assessing a digital contract repository and contract management software system. Utilizing a digital and data-driven solution like RazorSign will enable you to better utilize your contract data for company operations.
  
  Despite the dangers of depending on physical storage, some firms may be using a filing cabinet as part of their contract administration procedure. This kind of repository can result in missing contracts, out-of-date information, and the team members' incapacity to access the information as and when they need it, especially if they're working remotely. Others are a little more sophisticated, storing, managing, and collaborating on contracts using a combination of electronic solutions like shared files, and emails. Excel spreadsheets are another popular method of managing contracts, and while using this program has its advantages, it also has numerous drawbacks.

RazorSign contract management software offers the quickest ROI when you automate low - negotiation, high-volume contracts such as:

• Non-disclosure agreements (NDAs): One of the most typical legal agreements in business is the non-disclosure agreement (NDA). Of all the contract types that a business will develop, negotiate, sign, and handle, NDAs frequently make up most of them. Just for that reason, automating this agreement might save hundreds of hours each year, many of which would have been spent by highly compensated in-house attorneys or outside law firms. By using a CLM solution, with no direct engagement from legal, the business user receives a current NDA in a matter of minutes, saving both time and money. The savings from this simple automation example can add up over hundreds of employees and requests, making a contract management system an easy return on investment.
  
  The system preserves controls in the following ways in addition to saving time:- Based on system login, the user's business function, and other factors, NDA requests can be restricted to users who need to submit them. Any NDA that the system generates, uses legal wording that has been approved, is consistent, and is current. By securely keeping all NDA templates in a single repository and adapting them correctly to the requirements of various business requestors, a contract management system improves efficiency. Due to automation, only the people who want particular templates may access them, according to their jobs (sales, researcher directors, executives, etc.) and the details they supply on the request form. The same technology can generate a minimal NDA required by sales to cover pricing conversations or a more thorough NDA suitable for a pharmaceutical research collaboration or prospective drug trial.
• Master service agreements (MSAs): An MSA is a written agreement between two or more parties that specifies the terms and circumstances that will apply to all present and future tasks and obligations. MSAs are beneficial because they expedite the ratification of future agreements while enabling the parties to plan for the future. This is so because MSAs offer a structure for contracts that serves as the basis for all subsequent actions. MSAs can completely alter the legal dynamic of any ongoing corporate ties. They create a negotiating template and point of reference that do away with the requirement to draught a new contract for each interaction between the parties. MSAs function by establishing specific controlling fundamental terms and circumstances while also allowing for further alterations and amendments. MSAs give each party involved the ability to move quickly and react to a changing business environment by proactively building the legal foundation for a relationship's future.
• Employment offer letters: With additional legal support, employers and employees can create binding employment offer letters without worrying about their legal enforceability or contractual obligations. Employer-grade contract management solutions are provided by the Smart CLM tool to address the problems with employment agreements. Human Resources has the task of ensuring quick streamlined processes for onboarding of new hires. A manual or word-based system would involve individual emails followed by the signature process; an automated centralised process can have a single workflow starting with rolling out the offer, having an acceptance through an E-Signature tool combined with the required document capture. The smart dashboard offers a superior contract management software system with the aid of an AI-powered tool that enables the employer to quickly create new contracts from scratch using the template library. On the smart platform, both parties can discuss the terms and conditions and keep track of the activity levels. With a self-onboarding feature, the CLM software accelerates bulk contractual employment documentation. Strong drafting and progress monitoring provide transparency and traceability that foster client relationships and ensure efficient execution of the offer letter.
• A vendor agreements: A Vendor Agreement is a contract between the organisation and third-party vendors, suppliers and service providers that covers the terms and conditions governing the supply of raw material as well as other goods & services required in the running of the company. These arrangements are usually spread in hub offices, manufacturing facilities or other locations. Onboarding suppliers, vendors into the organisational process can be the most vital aspect of the entire procurement process, raising issues of time, documentation and compliance if not handled smoothly. Automation of these processes of procuring goods and services, managing vendor relationships, and streamlining manual activities and procedures using a comprehensive procurement solution can give rise to significant efficiency and productivity benefits.
  
  Scaling your contract management procedure as your company adds additional vendors, expands its procurement function and raises spending is also simple with the help of vendor management software or a CLM solution. Teams may purchase and pay for the goods and services they require, manage vendor relationships, and streamline manual activities and procedures using a CLM solution.

What are the benefits of contract lifecycle management (CLM) software?

When managing contracts, in-house legal teams, outsourced teams, HR services, banking, accounting departments, sales teams, Procurement teams, etc. have typically been hampered by time-consuming manual processes. But CLM frees up a lot of the time-consuming duties necessary for a contract's lifespan - by automating repetitive tasks, removing redundancies, and enabling process improvements, allowing all teams to work on higher-value projects. Here are a few benefits of using contract lifecycle management.

• Easy contract creation: A cloud CLM enables anyone in your organization (yes, anyone, from any business function!) to quickly and easily create transaction-ready contracts from pre-approved templates for the most frequently needed standard contracts. When working with a sizable number of comparable contracts, such as NDAs, client agreements, or employment agreements, this is quite helpful – leaving the legal team with time to attend to more complex matters.
• Keeping track: There is always some back-and-forth conversation between two or more parties during a contract negotiation. Even the most successful negotiations require multiple signatures. A contract document now contains numerous versions and rounds of amendment after adding complexity to a negotiation. You can simply keep track of a contract's version with CLM so that you always work with the most recent version and can look back via version history to see what changes were made. Your team will be able to simply get information on the status of other contracts and will have a comprehensive view of all your active contracts.
  
  Your teams will also save time by automating the process of manually looking for statuses and producing reports when it comes time to report on where contracts are in their life cycles. Reporting dashboards will offer a visual user interface (charts, pies, gauges, cards, maps, etc.) and relevant data grids in real time, enabling users to drill down to the contract request, contract record, and contract document as necessary. These dashboards can be delivered automatically or manually and shared both inside and outside.

• Multi- tasking: Paper is the #1 factor that slows down a contracting process. When several parties must physically receive the material, examine, approve, and advance it through the contract phases, it can take an eternity. To make it easier for your teams and outside parties to work together more successfully on documents in real-time, CLM converts this procedure to an electronic system. The lifecycle of the contract will thus be automatically shortened. Further, a CLM also smoothens process redundancies and inefficiencies, leading to significant time savings. Data Security & Privacy
• Data security & privacy: There are times when contracts aren't just one document that you can press "save" on and be sure your data is safe. A corporate legal department and the contracts it manages stores highly sensitive data related to the organisation; throughout a contact's lifecycle, there are frequently numerous attachments and data shared that also require state of the art security. To send documents to the appropriate parties in a secure way, CLM offers safe storage, can automatically interact with your email provider, or uses more sophisticated technology like file sync and sharing and electronic signature. A CLM software is vital in giving the company a secure and protected environment, with authenticated certified and secure access control, strong encryption of documents in storage as well as in transit, and storage on a highly secure and certified data center on secure infrastructure.
• Quick approvals: Your contract approval process can be made far more efficient and rapid through automated approvals, even multi-stage approvals. Your contract approval process can be automated as another method that CLM lowers compliance risk. No matter how complicated the approval process is or how many teams are required to participate, CLM streamlines the process for both the approver and the requester, ensuring that your contracts are always approved before being sent out. The other benefit that flows from this is that CLM therefore lowers contractual compliance risk.
• Flexible and user-friendly templates: Your team needs templated clauses and contract libraries to be effective, and CLM makes it simple to manage such templates. Pre-approved clauses from your team and documentation stored in a centralized repository aid team in establishing formal procedures that shorten the contract life cycle and guarantee that only the most recent iterations of templates are utilized. A structured CLM process will place an emphasis on gathering data as processes are processed and contract requests are made, then automatically putting the authorized data (header, terms, executive summary, etc.) into the proper template.
• Better tracking: Your team will be able to simply get information on the status of other contracts and will have a comprehensive view of all your active contracts. Your teams will save time by automating the process of manually looking for statuses and producing reports when it comes time to report on where contracts are in their life cycles. Reporting dashboards will offer a visual user interface (charts, pies, gauges, cards, maps, etc.) and relevant data grids in real-time, enabling users to drill down to the contract request, contract record, and contract document as necessary. These dashboards can be delivered automatically or manually and shared both inside and outside.
• Obligation & contract tracking: You can set up alerts and email reminders with a cloud CLM so that you never again forget a renewal date, a payment date, or any important event. Any collection of contracts in a company are bound to have innumerable deliverables, deadlines, dates etc associated and spread throughout the year. A centralised repository also enables you to set up alerts and reminders with a cloud CLM so that you never again forget a renewal date, a payment date, or any important event associated with any contract, as well as track the contract’s performance.
• Configurable dashboards and reports: A cloud CLM will enable you to get a comprehensive picture of all your ongoing contracts while highlighting the precise data you require thanks to configurable dashboards and reports. Reporting to senior business executives or auditors will at least be simple, freeing your legal team to focus on their core responsibilities.

Who are the main users of the CLM software?

• Legal industry: General counsels (GCs) and their legal teams, together with other legal professionals, are the main consumers of CLM systems. However, a wide range of departments, including M&A, sales, procurement, and human resources, profit from the strength of CLM. Given the large number of potential users within the organization, the CLM system must be able to manage a variety of contracts – including buy-side / sell-side contracts, financial contracts, lease agreements, vendor agreements, MSAs, NDAs and many others depending on the client department. The legal industry has emerged as a hub for extensive contract and workflow automation.
  
  

  80.8% of in-house attorneys were required to assist in contract administration, according to the 2019 ACC Benchmark Survey, by just reviewing and preparing documents—two simple digitized and automated duties. Contract management technology is currently being embraced by law firms at an exponential rate to increase productivity and simplify routine legal procedures. A little more than half of American law firms said they replaced human resources with technology, particularly legal contract management software, a percentage that hasn't changed in the preceding three years.

• HR department: Contract lifecycle management for contemporary HR teams includes developing, carrying out, and administering contracts as well as monitoring employees' movements, needs, and entity management. Depending on the size and extent of the HR staff, these contracts may be for hiring, NDAs, training, development, salary processing or wages, and other things. HR Teams frequently deal with problems brought on by contract violations and disputes between employers and employees. The team benefits from having contract lifecycle management software throughout the entire process, including post-signature management, storage, and trackable custom analytics to improve workflows and make wise decisions.
• Sales department: When it comes to tackling sales teams' issues with the contract process, contract lifecycle management software is the answer to all of these issues and more. By expediting contract cycles and revenue recognition, it considerably aids sales and sales operations teams in closing deals more quickly. It makes sure that every salesperson is aware of exactly where their contracts are, makes it simple, accurate, and efficient to submit and request those contracts, and gives them the authority to deliver contracts to consumers more quickly.
• Procurement teams: Solutions for contract lifecycle management (CLM) are becoming more popular with procurement teams and IT departments. Increased vendor relationships, operational efficiency, risk management, and other benefits will result from investing in contract lifecycle management for the procurement teams. The functional and operational teams now have a single spot to store all vendor contracts and associated paperwork thanks to CLMs. A CLM can assist these teams in managing renewals, upholding compliance, monitoring different authorization levels, identifying inefficiencies, and identifying places where cost reductions may be possible. Through the identification and mitigation of potential risks like
  
  non-compliance, missed deadlines, and vendor disputes, the majority of CLMs' search, risk assessment, and data extraction functionalities assist procurement teams in making sure that all contracts adhere to legal and regulatory requirements. It might take a lot of time and effort to negotiate and extend a contract. The flexibility of CLM software to develop templates, track modifications, and automate approvals saves teams important time and lowers the possibility of mistakes and misunderstandings in the procurement process.
• Financial departments: The way the CLM helps financial departments and finance professionals is beyond explanation. When CFOs use high-quality CLM software, they may decrease expenses, get visibility into cash flow, and make well-informed decisions because they have access to actionable Contract Intelligence. The way the CLM helps financial departments and finance professionals is by raising the potential of controlling expenses, getting enhanced visibility into cash flows, and making well-informed decisions because they have access to actionable contract intelligence.
  
  Accelerating contract velocity, enhancing cash flow, and optimizing the onboarding process for partners or suppliers are all key responsibilities of CLM software. A more effective time-to-value ratio and increased top-line revenue are the results of an optimized contract lifecycle. Using a CLM, CFOs can see how much revenue is locked up and search for ways to increase velocity. As another illustration, supply-side contracts contain crucial data that might affect a company's cash flow, and CFOs must have visibility into these specifics. Clear insight makes it easier for CFOs to make proactive changes based on their financial condition, including knowing when contracts are due for auto-renewal.
• Healthcare sector: Although almost any organization can gain from using contract lifecycle management (CLM) software, businesses that operate in the healthcare sector face extra strict regulations, making it crucial to scale, automate, and streamline their contract management processes. Healthcare organizations may manage risk more successfully, simplify compliance, lower complexity, and boost efficiency by doing this. They organizations are subject to a plethora of compliance requirements and stringent standards for preserving the security and privacy of patients' protected health information (PHI). A bewildering number of rules, including HIPAA, the HITECH Act, Stark laws, and others, are imposed on healthcare practitioners.
  
  The great majority of businesses engaged in the healthcare industry must be able to handle a large volume of frequently changing legal agreements. That requires dealing with a wide range of stakeholders, including parents and guardians, healthcare proxies and powers of attorney, other providers, and of course the patients themselves, for those who provide direct patient care. The administration of contracts within your organization is made simple by healthcare contract management software. The advantages of CLM in healthcare contract management include risk minimization, compliance upkeep, efficient contract management, and complexity management.

How contract lifecycle management (CLM) solutions benefit small businesses

Running a business is challenging, especially in the early stages when there are probably few employees and little money accounts. But now that we have the technology, there is no longer a reason why having a limited number of employees and resources would be a problem. Regardless of your company's area of expertise, you presumably enter into several contracts every day. These agreements might obligate vendors and buyers or establish legal bonds. Your revenue increases with the number of active contracts you have. But do you manage these contracts in a way that makes this happen? Poor contract management costs businesses 9.2% of their total income on average.

Several factors make contracts challenging to manage: it can take a while to copy, file, and store them. Inaccurate price and payment tracking might result in revenue gaps. Delays in approval might leave customers unsatisfied and reduce your productivity. Inadequate management may lead to erroneous information or failure to notice when a policy is being followed.

Here are the few benefits how a CLM can bring to your small business:

• Resource management: Budgets for many small firms are fairly constrained. Given the exorbitant cost of commercial real estate, especially in larger cities, a lack of extra capital can frequently translate into a lack of office space depending on where the business is located. Of course, in addition to a shortage of space, the majority of businesses now wish to be paperless or at the very least limit the amount of printing and hard copies. For small firms, an online contract management system is quite beneficial because it removes the need for storage space and makes it much simpler to maintain all contracts and related papers in one location. Since there won't be a need for filing cabinets, storage closets, or any other bulky furniture or equipment required for paper documents, this helps businesses save a significant amount of money.
• Single repository: It also gets much simpler to arrange items into different categories and subfolders once all of a company's contracts have been deposited into a single repository. There won't likely ever be a need to page through documents in search of a certain clause, and using the online contract management system, even signing contracts to them is possible. Since everything can be quickly saved, retrieved, and searched, this centralization and automation will undoubtedly save countless valuable hours. Time is a vital resource for everyone, but smaller organizations sometimes find themselves short on it because so few employees can handle the heavy lifting.
• Better coordination: Small businesses, especially the startup segment, normally have phases of rapid growth, or establishment and setup requirements, or are run by small teams. This is where a CLM can come into its most powerful, as its full integration capabilities unlocks information flows across functions, while at the same time significantly reducing manual tasks and process redundancies. This improved coordination is vital given the fact that these organisations typically operate in a situation of resource crunch.
  
  In addition, small businesses may undoubtedly handle many stages of the contracting process, It may also be frequently necessary to enlist the assistance of outside experts especially during the drafting stage since the advice of legal counsel will be crucial in making sure that risks are minimized and liability is distributed properly. Additionally, at some point during the business, the accounting staff and the compliance team may need to sort through contractual issues. With a purpose-built contract management solution, sharing contract data with these professionals will be safer and simpler with efficient coordination and smooth collaboration.
• Company security: Regardless of the industry a company operates in or its size, data security is more crucial than ever. A corporation must take appropriate precautions to protect whatever valuable data it may have, including client information, intellectual property, and employee records. It would be naïve and outright incorrect to assume that a small firm is not a target or that the data to which it has access is secure. Online contract management is fantastic since it makes data protection and privacy both essentially painless. Of course, this is only accurate when a solution is implemented that places a high emphasis on privacy and data protection and builds robust security measures into its design. Small businesses should make sure to invest in a system that offers security features like encryption and two-factor authentication to guarantee that data is safeguarded.
• Reducing manual efforts: The ability to manage both the front end and back end of a contract without using bespoke code is the most significant feature of a CLM system. Due to the current hyper-manual nature of contract administration, tasks frequently consume more time and productivity than is necessary. Think over the five stages of the sales operations contract lifecycle once more. Businesses typically use ERP software for scheduling and a CRM program for client interactions. Businesses, however, manually complete the stages between these two initial and last steps.
  
  

You can streamline your process in a variety of ways by employing CLM software: Send the client a contract that was automatically generated based on the quote they chose. After a task is finished, send approval and renewal notifications to the appropriate individuals and programs responsible for progressing the contract. Once the client signs the contract, automatically update it and store it in your database. By using a CLM system, you may complete the whole sales process without having to concentrate on manual chores and ensure that no steps in the contract's lifespan are missed.

• Prediction of the processes: The details that need to be handled both before and after a contract are automatically handled by a CLM system. In reality, CLM software can access these facts from anywhere, regardless of the platform on which they run. For instance, CLM can instantly activate a customer's unique advantage to an external subscription, such as Adobe, after booking a contract.
• Analytics & reporting: Utilizing analytical tools that are included with CLM software, you can also assess the effectiveness of your contracts. It's a good idea to check how your contract is progressing through the cycle, especially if it's one of your most often-used contracts. With the help of analytical software, you can discover that a particular process step is taking too long to be approved, necessitating long-term modifications to a pricing model or accepted consumer profile.
  
  Similar to the previous example, you can discover that consumers consistently want to amend a specific area of your e-sign document, which means you need to modify the initial draft you always send out. Further, analysing the entire contract body using advanced technologies like AI contract (AI-Powered Contract Management Software - RazorSense (razorsign.com)) can reveal business insights hidden in contracts and their terms & conditions, trends, and more, which aid in decision making. In a small business, or a startup, with its resource challenges, such value additions can and do make the difference between a rapid scale-up and slower growth.

Why do businesses need to invest in contract management solutions?

• It assists in digitizing and securely keeping every agreement in a single repository. As a result, the legal teams may easily access them for contract reviews. This consequently reduces the need to manually search through and sort through heaps of paper.
• A business may keep thousands of contracts, and the number of contracts is expected to rise soon. As a result, finding the necessary arrangements is made simpler by this form of cloud storage. Preserves velocity and avoid team conflict, which is crucial for improving a company's capacity to close sales.
• Tracking the current cost against a supplier or stakeholder is quite straightforward with the aid of integration with other financial and procurement software systems.
• Stakeholders can instantly access contracts and share them with others using a single link. When compared to manual processes, this helps save a tonne of time. The contract review process might be sped up and made entirely automated to increase effectiveness.
• Making a to-do list makes it easier to review all contracts. As a result, contract managers can better understand the state of an organization and it becomes easier to specify escalation protocols, and to remind other parties of their roles and duties.
• It is advantageous to promptlynotify important stakeholderswhen theexpiration dates are drawing near. This aids firms in deciding whether to end their agreement or to renegotiate it. Consequently, it may aid them in avoiding being automatically locked into contracts.
• An efficient system cansave on high renewal expenses.Not only areproductivity improvementsmade possible by streamlining and automating routine contract management procedures, but doing so also enables you to foresee staffing concerns.
• By doing so, cloud based CLM automationenables better contract management team allocation and a more suitable focuswith higher value work on contract outliers. Client contracts can be automatically generated based on agreed quotes, reviewed and approved automatically based on user profiles, auto renewed, and stored in a single repository.
• Automation makes it possible to manage the contract lifecycle more effectively. It also makes iteasier to extract regulatory information from contractsand enter it into systems for business, legal, and financial risk management.

In addition to the above-mentioned benefits of investing in CLM software solutions, let's have a quick insight into the need for contract automation in our business.

• Increased contract visibility A central repository should be used to increase contract visibility as part of a CLM system. A central repository should house all contracts, documents, and metadata. The information required is readily and securely accessible to relevant parties with the appropriate permissions. Software for managing contracts reduces fragmentation and eliminates the need for hours-long searches for agreements. Contracts are not just simple to find, but important contract metadata is made more obvious.
  
  This makes proactive planning possible. This makes it simpler to manage every part of a contract's lifecycle. Contracts are kept in one location, and stakeholders can view a clear timeline of connected action. A transparent and auditable history of all revisions is provided by CLM systems. This assures teams that they are working with the most recent version while they execute and make choices. Participants in any decision-making process can be wholly aligned by using a single source of truth.
• Enhance work efficiency Contracts are kept in one location, and stakeholders can view a clear timeline of connected action. A transparent and auditable history of all revisions is provided by CLM systems. This assures teams that they are working with the most recent version while they execute and make choices. Participants in any decision-making process can be wholly aligned by using a single source of truth. Auto-actions also promote internal efficiency. Teams can save hours by automating the creation of contracts like NDAs and MSAs using a CLM system.
  
  The CLM approach is more valuable the more time teams have to devote to strategic tasks. Teams can focus on the things that truly matter when internal efficiencies are created using a CLM system. It helps contracts to move forward more rapidly, giving stakeholders back valuable time and freeing up time for teams to concentrate on other tasks.
• Work transparency By enabling teams to stay up to speed on contract updates, and rapidly identify obstacles when a contract gets stuck at a stage, contract automation improves and assures stronger accountability in the work process. This technique promoted trust among contract stakeholders, which sped up the process of improvement.
• Easy control over the contracts and centralized database To replace time-consuming and ineffective manual contracting processes, there are many types of contract management software on the market. AI-powered contract automation solutions promise to improve process accuracy and efficiency. The rise of digitization has streamlined contract automation by helping businesses build trust with their target audiences and increase the value of their brands. This fosters the development of long-lasting business relationships built on openness, productivity, and secure management of a company, all of which are enabled by sophisticated contract automation software.

Implementing contract management software

How Do I Implement CLM Software?

Planning and gaining everyone's support are essential for a successful CLM deployment. This entails collaborating with your team leaders and division heads to make sure that everyone is aware of the advantages of implementing CLM as well as any particular difficulties that might arise. Outline your goals and schedule the phases of your CLM implementation in order of importance. Is it more vital for you to create contract templates as quickly as feasible than to migrate all of your previous contracts? This approach will enable your implementation team to tailor feature implementation to your most pressing demands if you let them know this.

A defined, step-by-step process is necessary for rapid onboarding. Keep in mind that you are not onboarding just one worker. Planning is essential since in some situations you need to start with sizable groups using CLM software. So let us have a look into what all things should be kept in mind for implementing contract management software.

• Prioritize the CLM features you want to use first and identify the pain areas you want to address.
• The CLM software will be used by which teams? Choose a core team—typically the legal team—that will be invited after everything is set up and needs a deeper understanding of the product as well as admin access. Identify champions within the users who can be early adopters, propelling deeper adoption through them.
• Make a list of the different contract types you want to optimize as templates.
• Create a team member who will serve as the team's point of contact (SPOC) with the CLM supplier and be the internal owner of the entire project.
• Establish a rough implementation schedule and make your team's time available for training sessions.
• Get ready to migrate your historical contracts to a CLM repository.
• Determine the connectors you require by evaluating your IT stack, including Salesforce, Hubspot, and others.
• Furthermore, it's crucial to consider scale when planning and to try to convey both the needs of the present and the future.

A seamless implementation process is made possible by open dialogue about these fundamental issues, which also helps to establish the framework for your implementation strategy. Remember that you don't need to be an expert to ensure that your contract management system is implemented correctly, but being prepared in advance will speed up the software rollout process. Above all else, it's critical to commit to the new processes you're implementing and lay the proper groundwork from the start.

How can RazorSign simplify your CLM process?

As the above-mentioned blog discussed a lot about all aspects of the CLM software, now let's see what RazorSign has in stock for us. RazorSign Contract Lifecycle Management from RazorSign is the cornerstone of every organization for managing the whole contract lifecycle. Every Contract offers vital and highly valuable management data to help tactical choice-making.

RazorSign contract lifecycle management (CLM) goes above and beyond standard contract lifecycle management solutions to the point where you can also generate deviation reports, assign risk impact and probability, track and integrate contractual terms, obligations, and downstream processes with corporate compliances, and matter management and disputes as well as finance and pricing solutions for ERP/procurement. The enterprise-grade, high-performance, secure, and scalable CLM system can also take advantage of any linkable AI/ML technology to hasten contract reviews and data extraction. Integrated Risk Management can be accessed through this end-to-end solution.

To manage pre- and post-execution tasks, an organization must deal with the sheer volume and complexity of contracts. Ineffective contract management not only exposes the business to a slew of legal dangers but also has an impact on the top and bottom lines. The organization's cost-effectiveness and efficiency can significantly increase with the use of contract lifecycle management (CLM). Every business can manage contracts easily throughout its entire lifecycle, from initiation to termination, thanks to the RazorSign contract lifecycle management platform.