Follow These Steps for Successful Contract Lifecycle Management
Contract lifecycle management (CLM) is essential if you want to get the most out of your contracts – and who doesn’t? You and your employees took hours to draft, negotiate, and sign these contracts, and you need to make sure that the terms are honored and that you’re actually getting the discounts you haggled for during negotiations.
You need a CLM software solution not only to generate your contracts, but also automate contract signing and monitoring of the contract throughout its lifecycle. Your contracts reduce business risks for both you and the other signatories, as well as strengthening your supplier relationships.
That’s why it’s so important that you use an automated CLM software tool to maximize efficiencies and squeeze as much value as possible out of your contracts.
The right CLM tool will help you navigate generating your contracts, negotiating your terms, getting signatures, and storing your contract digitally with the visibility you need to maximize your contract terms and payments.
Follow these steps to manage contracts successfully throughout their lifecycless.
Generate Your Contract
CLM begins with generating contracts. You might not be drafting each contract from scratch – most organizations use boilerplate contracts and then update them to meet the needs of each transaction.
However, many organizations are still using disconnected technologies to generate contracts. Microsoft Word is the most common tool used for contract generation, but it’s not the best one – not anymore.
These days, you need CLM software to generate contracts in an environment where you can obtain full visibility into not just the contract generation process, but the deadlines, payment dates, and other terms that have to be met.
Negotiate the Terms
After a contract is drafted, terms need to be negotiated. This is the part of the process in which the contract will be swapped back and forth between signatories, perhaps many times, as contract terms are hammered out.
This is a time-consuming process. It can take weeks to negotiate a contract, with nearly half of survey respondents taking at least 20 hours, if not more, to negotiate the terms of a new contract, and 71 percent of respondents generating at least three different versions of a contract before negotiations are complete.
The online collaboration tools you will get in a CLM software solution will make the back-and-forth of contract negotiation so much easier, and will save time over using disconnected technologies like Microsoft Word and email.
Cloud CLM tools make the contract drafts available for real-time, online collaboration. Communication will be smoother, and you’ll shave hours off the amount of time it takes to negotiate a new contract.
Get the Signatures You Need
Getting your signatures is the next-to-last step in contract lifecycle management, and CLM tools can help with this, too. You’ll have the ability to instantly share contracts internally and externally with all signatories, without the need to rely on outdated routing systems like fax or snail mail.
You need to keep contract routing within your CLM tool, so that you don’t run the risk of losing documents or losing visibility into your documents – the ability to see at a glance your deadlines, payment dates, and other important contract terms as they become applicable during the lifecycles of the contracts.
When it’s time to share the contract with signatories, you can make sure that only those who need the contract see it – and with a CLM tool, you can streamline the process of sending contracts out for signatures so that the delays that can happen with manual processes (sending contracts to signatories via email) don’t bog things down.
Store the Contract in the Cloud
Don’t be one of those companies that stuff signed contracts into a physical filing cabinet somewhere – if you’re not storing your contracts on the cloud or at least on company servers, it’s long past time to update your processes.
It’s important to store contracts digitally because it makes it so much easier to find them and keep track of how well those contract terms you negotiated so painstakingly are being adhered to.
The right contract lifecycle management solution will remind you when contract deadlines are upcoming, when it’s time to make or receive payments, and everything else you need to know to make the most of the contracts you’ve negotiated.
Successful contract lifecycle management can streamline your contract drafting, negotiation, and signing processes, so you spend less time putting together contracts and have more time to focus on honoring them. It’s a win-win for everyone involved.