Organizations have multiple contracts that they have to look after (visit DocJuris), and each contract is at a particular stage of their respective contract lifecycle. This is where Contract Lifecycle Management comes to the fore in order to mitigate risks, strengthen productivity, and increase the value of a contract substantially.
CLM goes on to streamline the contract and add an automated feature to it, especially during the key stages. All these different stages encompass:
- Initiation
- Authoring
- Process and workflow
- Negotiation and approval
- Execution
- On-going management
- Compliance that is mandated within the repository
- Contract renewal
Predominantly, there are umpteen reasons why an organization requires contract management software. It facilitates an organization with a fair view into corporate spending, generates a much-coveted efficiency in the contract process, and finally, brings down the administrative costs. Now, these facets have to be successfully addressed by an organization which can be done by standardizing and administering the contract development. It can also be achieved through accelerating and automating CLM right from the beginning to the end.
Hence, CLM is basically the management of the contracts from the initial phases till the end. Now, proactive and robust CLM can only be attained through the incorporation of robust CLM software. This software will assess and propel the operations on a larger magnitude by making substantial improvements in overall efficiency along with cost savings.
IMAGE: PEXELS
A Step Beyond
CLM goes one step ahead in keeping the organization on track throughout by reducing the exposure to potential risks significantly. It also aligns the diverse activities of the organization with the legal requirements that it has to adhere to. Software that is specifically designed to manage the contract templates have provided unprecedented assistance to the organizations on multiple grounds.
Considering the digital age that we all are currently living in, the advent of aerodynamic tools like artificial intelligence as well as machine learning has brought about a major transition. Especially, the post-execution contract management has evolved to become a predominant choice of the businesses to elevate, protect and subsequently optimize their organization.
Best Practices That CLM Incorporates
Contract Lifecycle Management Process entails nine imperative stages that expound the intricacies of the entire mechanism:
Stage 1 – Contract Creation
The entire process of CLM begins with contract creation, where a contracting process is initiated by a specific entity. Now this information will be used by that particular entity to draft or author the contract details and document. These details must include pertinent information, for instance, start date, end date, price terms, products or services, etc. This is the primary process of the contract lifecycle management that has to be fulfilled before you could move on to the consecutive stage.
Stage 2 – Contract Review
At this stage of contract authoring or drafting, a specific contract or document is formed with the help of CMx that contains sets of terms and conditions along with all the clauses. This is a vital stage since Contract Approvers, along with signing parties, are ascertained here. All the details pertaining to the approver and signing parties are chronicled in this document.
Stage 3 – Contract Approval
The document of agreement that was prepared in the preceding steps is consequently submitted to the internal and external approvers. The document thus formed is inspected and reviewed in order to proceed further in the process. Hence, the contractual document advances to the next step as far as the CLM life cycle is concerned. Contract approval is obtained from the designated stakeholders.
Stage 4 – Contract Execution
The approved contract is effectively sent to the designated parties to carry out signature formality. It can either be done through online mode or might even be done manually. Electronic signatures on the contract document are received from all the contracting parties. This particular process has been radically transformed into digitization mode. Signatures are usually done through various electronic-signature platforms in the likes of Adobe Sign. The requisite document and data are securely updated to the central repository post-execution.
Stage 5 – Repository Storage
Once the signatures are received from the designated parties and the contract document is signed, it is permanently placed in an agreement database. It is highly convenient to operate that way since it is easy to retrieve whenever required. Contractual metadata along with documents are readily saved so that they can be utilized or referred in the future. Now, these documents can only be accessed through contact API.
App4Legal is the predominant CLM software that encompasses a holistic module that delivers significant insights into details and data. It helps in:
- Cycle times
- Mitigates deviation
- Boosts savings
- Prevent from potential risks
- Cautions about the expiry
- Provides renewal statistics
- Procurement and sales metrics pertaining to contract revenue
The platform features an all-in-one service by keeping a plethora of contracts seamlessly organized in one place. The user can avail of certain time-saving features by searching all the contracts in the predetermined database, and App4Legal has undeniably evolved into a multifaceted search engine.
Stage 6 – Records Management System
All the critical documents that a business has produced over time are vigilantly monitored and controlled at this stage. Designated storage for all the records, along with their respective backups, is assembled here. This stage ensures the user, and there is no incertitude around the security of their data since the documents are safely secured in the Records Management System. It provides significant confidence that all the critical records are stored in a reliable system, and App4Legal consistently helps in minimizing errors with automated reminders.
Stage 7 – Seamless Search And Retrieval
This stage proves the efficiency of the overall system since it enables the business users to search promptly. The filters option also facilitates retrieving the required document swiftly from the contract system. The entire contract repository that is tagged with imperative keywords and tags makes it an easy search and retrieval process for the end-user. All the relevant documents can be accessed with an organized repository that serves as a perfect means for businesses.
Stage 8 – User Activity Log
User activity logs are exclusively captured at each stage; furthermore, the contract Metadata is seamlessly captured so that it becomes easier for the user to retrieve the data whenever required. In-depth reports can be generated by businesses through the use of easy retrieval of data. App4Legal serves this purpose quite impeccably since this software saves a lot of time and improves the overall performance significantly. Users can easily manage diverse contract processes from one place.
Stage 9 – Contract Expiry, Renewal, And Amendments
The contract must be renewed once it approaches its expiry date to maintain the active status thereof. It has to be given due diligence since it can lead to irremediable financial risks if the renewal is omitted. All the parties in the contract will suffer adversely in the event renewal is not done. Henceforth, the contract document must be renewed to a later date of expiry.
Hence, the benefits are inevitably clear here that the appropriate and precise CLM solution successfully connects the process of a contract to mitigating risks and errors. It also leads to a clear view of the revenue forecast down the line. Order fulfillment and billing are also made effortless with the CLM software, and App4Legal doesn’t let you down when it comes to robust CLM.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.
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