Organizations of all sizes must juggle several contracts at the same time, each at a distinct point of the contract lifecycle. Leading contract management lifecycle software reduces risk, improves productivity, and maximizes a contract’s value. But what is contract lifecycle management? What are the best contract management lifecycle software companies? Read on to find out!
What Is Contract Lifecycle Management?
From initial writing to final execution and post-contract management, Contract Lifecycle Management is the process of managing every stage of a contract’s life. This includes keeping track of all agreement stakeholders, monitoring contractual responsibilities, and ensuring compliance with applicable laws and regulations.
CLM assists organizations in maximizing the value of their commercial contracts while avoiding the risk of noncompliance or failing to meet contractual obligations.
Essential Steps In the Contract Lifecycle Management Process
The particular processes for a contract management process may differ depending on the type of contract and industry, however, there are several steps that are required for every contract lifecycle. Let’s take a closer look at them to see how the process works:
#1. Requests
This first stage of the lifecycle allows business stakeholders to acquire critical information about a new contract, revision, renewal, and so on. The request stage undoubtedly sets the tone for whether a contract is processed efficiently or with delays.
#2. Authoring
This process, also known as the contract writing stage, involves contract parties consolidating standard contract clauses, contract key dates, contract counterparty information, and other relevant data into the written copy of a contract.
#3. Negotiations
Parties negotiate the parameters drafted during the previous step during the contract negotiation phase. Following back-and-forth communication and redlining, the conditions reached provide insight into the expectations of all parties concerned.
#4. Approvals
A review is conducted by all parties. Parameters are specified to fulfill compliance standards, contractual duties, milestones, and contract special clauses. An accessible and up-to-date record of contract amendments is required for a healthy contract approval procedure. As a result, a contract management software audit trail is critical for effective contract lifecycle management.
#5. Signatures
A contract is ratified when a chief employee or authority with high clearance signs it. Platforms that provide forward-thinking and user-friendly electronic signature software features make it simple to sign contracts one at a time or in bulk, in the office or on the move, in an increasingly mobile landscape where handwritten signatures are time-consuming and inefficient.
#6. Obligations
Everyone agrees on their roles, milestones, critical dates, deliverables, and payment windows.
#7. Compliance
It is agreed that general and field-specific contractual norms, standards, guidelines, and practices, in addition to those mentioned in a contract, will be followed. Proper compliance management reduces late fees, lawsuits, and bottlenecks while also laying the groundwork for future contracts.
#8. Renewals
The decision to renew or cancel an existing contract is made by management teams at this step.
The choice should be based on an examination of both parties’ past performance as well as their ability to meet all contractual commitments in the future. If contract renewal is decided, any necessary revisions should be negotiated at this time to ensure that both parties are happy with the new terms and conditions.
If, on the other hand, termination is chosen, measures must be made to ensure that any remaining duties are completed, as well as any appropriate financial arrangements.
The Advantages of Contract Lifecycle Management
It’s simple to see why contract lifecycle management has become increasingly important in today’s business world. Here are some of the advantages CLM can offer your company, ranging from improving contract processes to increasing visibility.
#1. Simplified Procurement Procedures
Organizations can use an effective CLM system to automate and streamline time-consuming manual contract operations such as document production, review, approval, execution, and archiving. The automation of these operations lowers paperwork and eliminates errors that can occur when processing documents manually.
Streamlining the process also saves buyers and sellers time by allowing them to swiftly analyze bids, approve contracts, and execute them.
Furthermore, by digitizing contract processes, a company may better track all procurement-related actions, providing greater visibility into operations while guaranteeing compliance with laws and regulations.
#2. Increased Compliance
Pre-approved templates, clauses, notifications for expirations/renewals, automated audit trails, configurable reporting capabilities, and other elements are included in CLM systems to assure legal and regulatory compliance.
This enables firms to stay on top of their contracts throughout their lifecycle, lowering the risk of noncompliance or penalties due to missed deadlines or forgotten rules.
Furthermore, CLM solutions allow access control to limit who has access to certain contracts and information included inside them – a critical component in ensuring secure data management practices.
#3. Cost-cutting measures
Companies can minimize their overall costs by using a streamlined and coordinated approach to managing contracts. They can save money by readily determining where they are underspending and overspending.
Furthermore, by using automated processes such as regular notifications for expiration and renewal dates, organizations can avoid costly blunders such as late payments, missing invoices, or missed deadlines.
Finally, contract automation technologies assist management teams in negotiating better terms with suppliers by offering data-driven insights into current market rates for certain goods and services. This allows them to negotiate better vendor costs, which can result in significant cost savings across the board.
#4. Better Negotiations
CLM software provides negotiation teams with real-time access to pricing and terms from their suppliers for each specific product or service being discussed. This transparency enables purchasers to estimate value more precisely and make better judgments during negotiations.
Automation tools, such as automatic requests for proposal routing, also assist in ensuring that everyone participating in the agreement is made aware of changes throughout talks, allowing them to be addressed swiftly and properly.
This can aid in keeping all parties engaged in the agreement satisfied with their negotiations, resulting in better contracts for all.
#5. Increased Visibility
Contract lifecycle management allows enterprises to obtain a better understanding of the entire contract process and its accompanying data, from start to finish. This provides procurement teams with a comprehensive view of their contracts and allows them to better follow each agreement’s contract milestones.
Increased visibility enhances transparency among parties, allowing for better communication and collaboration throughout the contract process.
Furthermore, it eliminates manual processes by giving real-time updates on contract changes or developments, allowing organizations to respond promptly to any circumstance that may happen during negotiations or implementation.
Best Contract Lifecycle Management Software Companies
CLM stands for contract lifecycle management software, which assists organizations in automating the creation, negotiation, and signing of contracts. It can also aid in the storage and management of signed contracts. As a result, organizations can save time and money by automating contract-related procedures. We reviewed the leading contract lifecycle management software companies to find the best contract management solutions. They are as follows:
#1. PandaDoc
PandaDoc is a low-cost all-in-one solution that includes a powerful contract and document management platform. Also, PandaDoc, which was founded in 2011, uses simple software to help you manage the whole lifecycle of your contracts. This feature-rich, cheap software stands out from the crowd, making it the greatest overall solution for companies of any size.
#2. DocuSign
DocuSign provides small businesses with low-cost contract management solutions ranging from e-signatures to a full CLM system.
Hence, DocuSign launched in 2003 as an e-signature startup, but its 2018 acquisition of SpringCM provided the company with CLM capabilities. Also, DocuSign is frequently used by businesses since it is straightforward to use for all parties. DocuSign’s e-signature plans were determined to be optimal for small firms in our assessment, though end-to-end solutions are available for contract-heavy operations.
#3. Concord
Concord enables companies to distribute an infinite amount of papers with full onboarding support and enterprise-grade capabilities. Also, Concord is the greatest alternative for large enterprises due to its infinite capacity and crucial integrations.
Concord appears to be identical to Gmail at first glance. You can set it up in minutes and receive complete onboarding assistance with all programs. You may work from whichever software you like, whether it’s the Concord dashboard or Google Drive.
#4. Outlaw
Outlaw, a newbie to the organization, was created in 2017. This Outlaw is the best solution we found for your reporting needs, because of its robust dashboard and AI-assisted analytics. Also, Outlaw is suitable for the majority of organizations, and its unlimited cloud storage, contracts, and e-signatures eliminate the need to worry about volume.
What Does Contract Management Software Cost?
Most contract management software is available on a monthly or annual basis, with discounts available for yearly payments, high contract volume, or a big number of users. Because you may upload your own agreement or use a common template, then email it for an e-signature, the free and low-cost plans are ideal for small firms with conventional contracts.
Paid options with basic contract management tools begin at $25 per user per month. Lower-priced plans, on the other hand, frequently do not have advanced customization, reporting, or branding choices. On the other hand, AI technology, automation, and ultimate customization will cost you up to $125 per user every month.
What Are Common Features of Contract Management Software?
While the features of CLM software programs differ, nearly all solutions assist business owners throughout the document lifecycle. The following are the most sought contract management software features:
- Custom or smart fields: For your contracts, you can use standard fields or add custom fields to collect relevant information about your client.
- Automated approval process: Enterprise-level software allows you to configure processes so that your paper is routed to the appropriate individuals for approval without wasting time.
- Automated alerts: From contract change email notifications to milestone alerts, automated reminders keep everyone informed throughout the process.
- Redlining: This is the process through which all parties amend contracts while keeping track of any changes. This is also a feature of digital discussions, as papers flow to and from parties, with revisions allowed or denied.
- e-signature: Many CLMs include native e-signature facilities, which means they are incorporated into the software. Other companies include a third-party e-signature feature in their software.
- OCR capabilities: This is a text- or voice-based search capability that allows you to find contracts, clauses, or client data in your storage rapidly.
- Audit trails: If your contract is litigated, certain CLM software tracks all versions, talks, and revisions to provide a clear audit trail.
What Are the 4 Stages of Contract Life Cycle?
Contract management is divided into two stages: pre-signature (creation, negotiation/collaboration, and review/approval) and post-signature (administration/execution, renewal/termination, and reporting/tracking).
What Are the Components of Contract Lifecycle Management?
Contract lifecycle management (CLM) automates and simplifies contract operations at critical phases. Initiation, authoring, process and workflow, negotiation and approval, execution, ongoing management and compliance (inside the repository), and contract renewal are among these stages.
What Are the 4 Pillars of CLM?
Centralized repositories, templates, and clause libraries are the four pillars of contract compliance. Contract performance benchmarks that are well-defined. Workflows that are consistent.
What Is the Contract Life Cycle Model?
The “lifecycle” concept is used to depict the path of a contract. It starts with requests and concludes when they are completely satisfied – with the possibility of renewal. Requests, Authoring, Negotiations, Approvals, Signatures, Obligations, Compliance, and Renewals are the eight common steps.
What Are the 5 Key Stages of Contracting Life Cycle?
The five stages of the contract lifecycle are as follows:
- Contract creation and authoring
- Contract collaboration and negotiation
- Contract award and execution.
- Contract administration.
- Contract close-out or renewal.
What Are the Six 6 Stages of Contract Management?
The six stages of a contract lifecycle are as follows:
- Contract creation.
- Negotiation and collaboration.
- Review and approval.
- Administration and execution.
- Ongoing management and renewal.
- Reporting and tracking.
What Is CLM Workflow?
CLM workflow refers to all of the steps an organization takes to create and legally execute a contract. Workflows can be created for each stage of the process, from ideation and authoring to negotiation and approvals, and finally execution and renewal or termination.
What Are the 3 Design Pillars?
These three pillars—people, procedures, and infrastructure—apply to companies that are already in the design-build space as well as those that are just getting started.
Conclusion
In conclusion, contract lifecycle management is a critical tool for companies of all sizes and industries. CLM can save time, money, and resources while lowering risks associated with manual contracts by automating contract processing and offering better visibility into the contracting process.
CLM can help ensure compliance with industry standards and provide important insights into contractual data in addition to optimizing operations.
Businesses can increase the efficiency of their contract management operations while getting better control of their agreements with the correct implementation and support from a trustworthy vendor.
Related Articles
- Top Benefits of Using Contract Lifecycle Management for Small Businesses
- CONTRACT MANAGEMENT: What Is It, Process & Lifecycle
- CONTACT MANAGEMENT SOFTWARE: 17+ Best Contact Management Software Tools in 2023
- Project Lifecycle: Meaning, Stages & Why It’s Important
References
