Thursday, July 18, 2024

Why Need of Contract Lifecycle Management Tools?

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Contract management software should track all contract activity in one place – from drafting and negotiating to signing and storage. It should also include a workflow feature that ensures the correct stakeholders are involved at each stage.

Many previous CLM tools were custom enterprise solutions that took months (if not years) to deploy. More recently, modular “point solutions” have appeared that specialize in a specific stage of the process.

Improved Collaboration

Contract management often involves multiple teams and stakeholders from across an organization, spanning various departments (from legal to sales to finance). In order to ensure everyone is aligned on the same goals, it’s essential that contracts are reviewed and negotiated collaboratively. This helps to reduce errors, accelerate turnaround times and ensure contractual obligations are met.

With a Contract Lifecycle Management solution like Juro, all parties can review contracts in one unified workspace and communicate with each other through familiar tools like Slack or Teams. Stakeholders can easily add redlines and review earlier versions of a contract, eliminating back-and-forth and speeding up the approval process. The platform also automates the creation of contracts and other contracting documents from standard templates, saving hours in manual effort.

Traditionally, contract management processes include internal approvals and signing (physically putting your name on the dotted line). Contract Lifecycle Management tools help to streamline this process by separating these two steps into distinct workflows and allowing for real-time collaboration between stakeholders. Some platforms also integrate with eSignature services like DocuSign or Dropbox Sign, making it easy to get contracts signed by all parties.

Unlike outdated CLM solutions, which are costly to implement and can take months to get up and running, most modern contracting tools offer quick and simple integrations with other business systems. This reduces overall IT spend and allows teams to gain valuable performance insights on key contract management metrics from a single, centralized dashboard.

Streamlined Document Management

The contract process involves more than a single document that you can send via email or file sharing. There are numerous attachments and files exchanged throughout the life of a contract that require safe storage and access. Contract Lifecycle Management tools enable centralized file storage and allow for secure document collaboration. You can also utilize advanced technology like secure file sync and sharing and electronic signatures to ensure that all contracts are stored and transmitted securely.

Paper-based contract processes can bog down when multiple parties are required to manually receive and review documentation. CLM software eliminates this inefficiency by allowing commercial teams, legal teams and other stakeholders to collaborate on contracts and agreements in real-time through the platform. This reduces contracting timelines, speeds up sales cycles and increases revenue capturing.

Managing a contract requires a lot of different steps to be taken at the right time in order to ensure that the contract meets its milestones and compliance standards. A central contract repository with workflow automation enabled will keep track of all actions required in the contract and notify relevant people of upcoming deadlines. This helps minimize the risk of delays in approvals or missed deadlines due to oversight.

If you’re considering a Contract Lifecycle Management tool, choose one with a comprehensive feature set that includes document storage and management, contract drafting and creation, collaboration and approval workflows, risk and compliance management and reporting and analytics. If you’re not ready to buy, most CLM tools offer a free trial that allows you to test the product on your own documents to see if it is a fit for your business.

Automated Contract Approval

Contracts may be the foundation of commerce, but they’re also some of the most complicated and time-consuming documents to draft and manage. That’s because contracts involve multiple people, often in different locations, and require legal and business teams to work together.

Contract lifecycle management tools streamline these workflows and processes, reducing the time it takes to review and approve contracts by more than 50%. They also reduce the risk of costly errors and compliance risks by ensuring that contracts have been reviewed and approved in accordance with company policy.

The traditional approach to contract management entailed expensive, highly customized tools that could take months or even years to implement. These were often difficult to upgrade and maintained, leading to costly data and process siloes across the organization. Or, businesses would purchase a suite of disjointed point solutions that handled specific stages of contract management but didn’t work well with each other.

As technology advanced, best-in-breed CLM software unbundled their capabilities. Many now enable no-touch contract creation within line of business systems like CRM, sourcing and procurement, taking input and auto-building contracts in bulk based on defined business rules. This enables organizations to achieve faster time to revenue, improve cycle times and significantly reduce legal operating expenses during the contracting process. They also help to automate and enforce the correct terms, increasing compliance and lowering the risk of missed or forgotten deadlines.

Reduced Compliance Risk

Contract Lifecycle Management tools reduce risk by ensuring that all parties meet their contractual obligations. These obligations are outlined in the contracts and create legal liabilities that if not fulfilled can result in fines or penalties. CLM automates contract review and approval workflows so that contracts are never sent out with errors that could cost your company money.

CLM solutions can also prevent missed renewals or other important contract milestones with automated alerts and notification features. This reduces the number of contract documents that are missed and mitigates the risk of legal disputes over unfulfilled or underperforming contractual requirements.

Lastly, CLM software can also help to manage risk post-execution with configurable risk models that track contract performance and third party compliance. This allows you to identify and minimize risk and increase visibility for stakeholders.

Unlike legacy software that requires lengthy implementations, frequent IT support requests and extensive training, best-of-breed contract management tools are self-serve, easy to use and instantly boost business processes and data exchange. This helps to cut down on manual work, lower costs and significantly accelerate time to revenue for your team. See the top rated contract management tools in the Data Quadrant Buyer’s Guide to find out which product will best suit your needs. This comprehensive evaluation of the top software products in the market is based on actual user reviews and meticulously verified by industry experts.

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