Contract Lifecycle Management- Optimizing Business Documenting Process

The sheer volume of documents processed daily by businesses is exceedingly high, and managing them often becomes tedious. No matter the industry, every business deals with documents like purchase orders, supplier agreements, legal bonds, employee contracts, and many more. Businesses require a solution to make the process simpler. 

Contract Lifecycle Management, or CLM, is the answer to the documenting issue all businesses encounter. By integrating with an AI-driven solution, businesses can add efficiency and speed to their contract management system.

What Does Contract Lifecycle Management Mean?  

When businesses envision driving efficiency into their documenting process, a question that often pops up is, ‘What is Contract Lifecycle Management, and how can it help my business?’. 

CLM is document management technology capable of digitizing contracting procedures such as drafting, negotiation, contract signatures, and even contract tracking. As for how CLM helps businesses, smart contract management optimizes these procedures and makes them easier to complete. 

From drafting a contract to its execution, CLM spans the entire documentation journey, including authentication, approval, storage, and renewal. The AI-integrated solution expedites the documentation process and tracks the document’s status throughout its lifecycle.  

Contract Lifecycle Management enables businesses to revamp their contracting process flow, which is usually time-consuming and demands several people’s complete involvement when done manually. 

By introducing CLM into document management, enterprises can automate the contract process flow and allow employees to focus on the tasks that matter. 

Why Do Businesses Need Contract Lifecycle Management?

For several reasons, businesses face numerous challenges when they have to draft, manage, execute, and track multiple contracts. These include – an over-reliance on legacy technology, the utilization of non-scalable procedures involving manual and paper-based workflows, and a profound lack of automation in the documentation procedures of businesses.

These factors result in numerous challenges and problems. Some of the issues concerning document management that firms face are:

  • Unmitigated complexity in document management: The average business produces several tonnes of documents annually and makes several billion copies of the same documents. Complex stakeholder relationships, contract lifecycles with numerous touch-points, and regulatory compliance requirements further exacerbate the pure scale of contracting. This situation is especially dire for businesses in the finance, insurance, and retail sectors which contract several vendors and distributors to streamline their operations and are also heavily regulated. These businesses all require a smart way to manage their contract lifecycles.  
  • Challenges in collaboration between teams: Business contracting is a collaborative process between sales, legal, operations, and finance teams. However, due to the massive scale at which contracts are drafted, negotiated, and executed in modern businesses, collaborating on contracts is among the biggest team challenges. A lack of good version tracking also contributes to the siloing of teams and results in lowered efficiency. 
  • Duplication & multiple manual entries: Businesses need many copies of a single contract for different purposes. With the absence of CLM software, a need arises to spend considerable amounts of time creating multiple copies of the same contract. It, in turn, reduces workspace productivity which is undesirable for the business’s growth. 
  • Missed renewals: Business contracts require timely renewal to keep a project running. The chances of missing out on renewing a particular contract are considerable as employees manage an excessive number of documents each day. This unnecessarily slows down the project and impacts the business, leading to both loss of reputation and discontinued contracts. 
  • Unorganized storage: Relying on contract storage methods like paper documentation and filing cabinets make maintaining all the contracts in order challenging. A cluttered digital storage system makes managing and accessing business contracts difficult. 
  • Contract tracking becomes strenuous: When a firm’s contract volume increases to thousands and more, manually tracking the status of each contract becomes laborious. This problem can lead to missed deadlines, and carrying out audit trails also becomes challenging. 
  • High levels of contract risk: Without a secure and smart contract management system, contracts can easily get into the hands of unauthorized persons or simply end up being misplaced. This is a major threat as business transactions must be maintained safely to preserve confidentiality. 
  • Contract drafting errors & delays: Drafting documents from scratch can lead to numerous manual errors that can simply be eliminated through contract management software. 

Readily available templates, clause suggestions, and enterprise-wide contract standardization through CLM make creating and managing contracts easier. In addition, smart tracking, centralized storage, and automated renewals make the task more manageable for business owners and employees. 

Features To Look For In Contract Lifecycle Management Software 

  • Contract Automation Through AI: Contract Lifecycle Management employs artificial intelligence (AI) to automate major documentation processes that help employees focus on high-value tasks. Through CLM, businesses can automate their contract lifecycles to drive efficiency through their documenting process. 
  • Quick Contract Creation: With an AI-powered CLM tool, creating contracts from scratch becomes fast and efficient. CLM solutions offer numerous pre-configured templates & workflows that can be used to draft any type of contract that the business or situation may require. 
  • Collaboration Made Easy: Through CLM technology, multiple parties can work on a contract simultaneously. Negotiating parties can leave suggestions, redline clauses needing change, and track changes to digitally conclude negotiations. With real-time negotiating, parties can also quickly reach a settlement whenever a difference arises. 
  • Organization-Wide Contract Uniformity: CLM tools unify business contracts and contracting processes on a single, smart platform. Centralized contract repositories and version tracking enable smooth collaboration and place control of contracts squarely in the hands of the relevant teams and stakeholders. 
  • Integrated eSignatures: Implementing a business contract becomes easier with an eSign feature embedded in the digital contracts. Through electronic signing, executives and other stakeholders can authenticate the contract in no time, leading to high levels of contract efficiency. By eSigning documents, businesses can also ensure that all contracts are tamper-proof and verifiable. This makes eSign-enabled CLM technology essential for confidential business transactions. 
  • Strong Audit Trails: A CLM system guarantees every contract’s integrity by capturing every annotation and agreement change made in the document. This paves the way for easy audit trails whenever a requirement demands reviewing previous contract versions. Additionally, strong audit trails ease compliance burdens for businesses functioning in highly regulated industry segments such as finance, healthcare, retail, and the pharmaceutical sector. 
  • Compliance With Regulatory Regimes: With an AI-assisted contract management process, businesses can ensure that all their contracts’ terms comply with government and industry regulations. Smart CLM helps businesses maintain a virtual audit trail for all their commercial transactions and contract changes, making compliance even easier. 
  • Controlled Access: Contract management software offers excellent security to business contracts that are often highly confidential. By providing role-based access models to provide different user permissions for contract stakeholders, & facilitating a multi-tiered approval process via an approval matrix. 
  • Status Tracking: Through custom notification modules & timely reminders, smart contract tools notify users about various contract functions such as updates, renewals, payment dues, expiration, and more. This feature enables businesses to effortlessly track a contract’s status in real-time throughout its lifecycle. 
  • Insights Delivered Instantly: CLM implements contract performance tracking to regularly deliver statistical data related to its operations and contract functions. This aids businesses in making key decisions regarding the processes implemented through the said contract. 
  • Contract Learning: AI features in CLM solutions analyze contract performance and offer ready information to key stakeholders. These data are packaged & presented to enable better business decision-making and help businesses learn from their contracts.
  • Deadlines Aren’t Missed: Through CLM Contract Lifecycle Management integration, corporates can be assured they do not miss strict project timelines and stay updated with their procedural workflows. 

contract lifecycle management features

The CLM Process Flow: How Does Contract Lifecycle Management Work?

By integrating contract automation software into their documenting workflows, businesses can encounter minimal errors and receive timely insights that can provide an edge over their competitors. The contract lifecycle process involves multiple steps in an orderly process flow, all of which are automated through a CLM platform. 

  1. Business Profile Creation: The company’s profile is created on the CLM software dashboard to help the firm gain quick access and find all its contracts. Businesses can monitor their contracts’ status through their designated profile set up on the CLM tool. 
  2. A Contract is Requested: Once the business profile is created, the business requests a new contract on the CLM platform. This request is assigned to team members on the CLM platform.
  3. The Contract is Drafted: Legal or sales teams utilize custom templates to draft contracts instantly or compose contracts with the help of the software’s content libraries. Drafts can also be uploaded and templatized for later use. Tokenization is another useful feature of CLM software, allowing users to simply indicate the type of content required in any contract section and leaving this to be filled by the appropriate parties. 
  4. Parties are Invited: Businesses can invite multiple parties to work on a contract based on their projects’ requirements. Parties can easily negotiate and draft the contract by including suitable clauses and terms. Users can configure the templates to suit their requirements and create the contract from start to finish. 
  5. Contract Approval: The invited parties must now approve the contract contents hierarchically. Contract Lifecycle Management software offers advanced approval features that automatically send contract drafts for approval in a pre-programmed order. This is accomplished using intelligent approval matrices that significantly reduce approval times. 
  6. Online Negotiation: A CLM tool enables parties to collaborate seamlessly through real-time online negotiation facilities. Users can leave suggestions, track changes & redline content using the CLM software’s negotiation features. This benefits all parties involved as it helps develop relevant clauses for the contract and conclude negotiations quicker. 
  7. Clause Locking and Contract History: Once negotiations are completed, clauses are locked to prevent changes. Contract lifecycle management software enables users to customize their contracts to suit their needs. The clause-locking feature ensures parties do not edit non-negotiable clauses. Furthermore, all edits, suggestions, and changes to the contract are recorded for future reference. 
  8. Authentication Through eSign: The next step in a contract’s lifecycle is contract execution. With electronic signature integrations, contract lifecycle management software can aid businesses in executing contracts from anywhere in no time. The feature also adds a layer of security to the contract and ensures contract validity and security. 
  9. Contract Storage: Once eSigned, the contract is moved to an access-controlled repository. Moving contracts from filing cabinets to a secure, digital repository helps preserve the integrity of legacy contracts while also enhancing documentation efficiency.   Smart CLM solutions allow employees to collaborate smoothly on contract workflows by enabling easy access to the latest versions. Additionally, smart CLM offers high security for confidential business contracts to be stored safely. 
  10. Timely Notifications: Businesses are notified of all upcoming events as contracts approach expiry or renewal. CLM provides users a custom notification module to configure timely reminders regarding contract updates, payment timelines, and renewals. Automation ensures businesses never miss a contract deadline and easily manage the otherwise tedious manual process. 

contract lifecycle management procedure

How Do CLM Tools Streamline & Expedite Business Contracts? 

With an AI-enabled contract management system, businesses experience many benefits pertaining to their document workflows that would otherwise require great attention to detail and consume time. 

The advantages that contract lifecycle management software offers over a manual contract management process are: 

  • End-to-End Process Standardization: With a CLM platform, businesses carry out all documentation procedures in one place. In addition, the tool offers regularity on all the documents created and executed by the firm. Staying compliant with rules and regulations also becomes easier when businesses implement a software-based CLM solution to their process flows. 
  • Reduced Contract Approval Time: By setting up an automated contract creation and execution process, businesses can reduce the time spent on approving any document. CLM notifies the respective parties of their pending approvals, ensuring the contract’s successive steps are carried out without delay. 
  • Minimized Time and Cost: Through automated contract generation, approval, storage, and renewal, corporations can significantly reduce the hours and the money they would otherwise spend to manage business contracts physically. Introducing a smart contract management lifecycle process also reduces the number of employees required to focus on this task. 
  • Greater Contract Visibility: Through CLM technology, businesses can store all their documents in a central repository that allows for enhanced contract visibility through extensive reporting. The facility also enables remote teams to easily access a contract throughout its lifecycle without requiring their presence on-premise. Authorized parties can access the required document instantly through the presence of standard storage space for all business documents. 
  • Contract Success: With the analytics tools provided by contract software, firms can measure their contracts’ success rates to make key decisions about their business process. The smart performance tracking feature of CLM software plays a vital role in enabling businesses to review the status and success of their contracts. 
  • Enhanced Business Value: A business can deliver enhanced value to its clients/customers by fulfilling and exceeding their expectations. An accurate and reliable contract lifecycle management system enhances a business’s value and paves the way for continued business with the client. 

contract lifecycle management importance

SignDesk – Total Contract Automation For Seamless Contract Lifecycle Management

Businesses can introduce ease and efficiency to managing their contracts through SignDesk’s AI-driven CLM software. Firms can access smart contract management solutions on a single platform that can help them automate all their documenting procedures. 

Contract lifecycle management creates a well-defined and customizable contracting process that offers efficient document administration with measurable results. With features like clause libraries, configurable templates, eSign integration, tokenization, company profile creation, digital repository, and many more, users can create, execute, and manage contracts the smart way. 

Smart contract lifecycle management has enabled businesses across segments to make their contract cycles more than 50% faster and save between 60-85% of document expenses. Additionally, firms can utilize smart contract management tools to reduce drafting & processing errors, store contracts safely, and maintain a strong audit trail for key contract functions. 

SignDesk offers simple and innovative solutions to help businesses ease and expedite their complex document-related workflows. 

Learn how to integrate our CLM tool into your contract process flows to initiate automation in your contract lifecycles with a free on-demand demo. 

Get a 30-day free trial now!