The primary purpose of all contracts is to define business interactions. In doing so, they also allow you to manage suppliers and customers, forecast expected revenues, establish service levels, control procurement costs, mitigate risks, and protect intellectual property.
Usually, contracts increase the number of legal and compliance risk, raise cost on the buy side, and underperform their revenue potential on the sell side. In fact, the inability to manage contracts for compliance and profitability costs organizations billions of dollars every year. This is the reason contract lifecycle management is important.
The definition of contract lifecycle varies from company to company and often from group to group within the same organization. However, the following lifecycle stages are present in some form:
- Manage obligations
The process of controlling, coordinating, and streamlining all stages in the contract lifecycle is known as contract lifecycle management. With CLM, companies can optimize contract performance especially in sales and procurement. Using the contract lifecycle management tools, organizations can reduce cost, more accurately forecast revenue, and improve compliance. A combination of information technologies is what CLM employs. This includes enterprise content management, intelligent capture, business process management, approval, and execution of contracts.
Contract lifecycle management helps organizations to eliminate common bottlenecks and also enables them to:
- Reduce contract cycle time
- Capture savings and optimize renewals
- Generate more profitable agreements
- Accurately track buy and sell obligations and milestones
- Minimize review time and dependency on attorney
- Gain a complete view of contracts and the contract process
- Minimize spending
- Maintain compliance and decrease risk exposure
Using contract lifecycle management software, you can automate contract renewals. Here is how CLM software helps to automate contract renewals:
On time renewal
Contract lifecycle management software allows you to renew contract before they expire as it comes with built-in alerts.
Over a contract’s lifetime, contract lifecycle management software provide visibility into spend, purchase orders and total savings.
Using e-signature, you can lock down the contract with a more reliable, faster, and easier method than ink.
Contract lifecycle management software allows you to collaborate in-house and with your suppliers to take the full process of authoring transactional contracts online.
In order to ensure that everyone can find your purchasing contracts easily, contract lifecycle management software allows you to store them in a central repository. CLM software ensures secure access, which means that people see only what they’re supposed to see.
Built in approval process
Contract lifecycle management software has a built-in approval process. This means that contracts are routed automatically to the appropriate department or person for approval. This speeds up the approval process.
With contract lifecycle management software, you can automate contract renewals. CLM will help you to achieve that. You can find out more about this software by contacting our CLM experts here.