A lot of contract lifecycle management (CLM) software is created for large companies with very high contracting volumes and full contract lifecycle needs — from drafting a contract to contract renewal. Most businesses don’t need these capabilities and can’t afford these larger solutions. They do not generally draft their own contracts — they’re often the ones signing contracts created by external third-party vendors.
Let’s dive into the different stages of a contract lifecycle. We’ll cover the pre- and post-signing phases where CLM solutions can offer the most value. We'll also explore why post-signing features often hold greater significance for most businesses, and how choosing the right CLM can streamline your processes, mitigate risks, and save you both time and money.
Table of Contents
- What Is Full Lifecycle CLM?
- Pre-Signature Features
- Post-Signature Features
- Choosing the Right CLM Solution
- ContractSafe: The Perfect Blend of Pre- and Post-Signature Solutions
What Is Full Lifecycle CLM?
Contract lifecycle management refers to the end-to-end management of a contract, from its creation and negotiation to its execution, ongoing monitoring, and eventual renewal or termination. It's a comprehensive approach that covers every stage of a contract's lifespan.
Effective CLM software offers numerous benefits for businesses:
- Reduce risk: Ensure compliance with contractual obligations, minimizing the potential for legal disputes and financial losses.
- Save time and money: Streamline contract processes, automate repetitive tasks like approvals and reminders, and avoid costly errors.
- Improve visibility: Gain a centralized view of your entire contract portfolio, making it easier to track key dates, obligations, and opportunities.
- Enhance collaboration: Facilitate seamless communication and collaboration among team members, legal counsel, and external parties involved in the contract process.
- Boost productivity: Free up valuable time and resources by automating manual tasks, allowing your team to focus on higher-value activities.
While these advantages are enticing, many businesses primarily grapple with challenges in the post-signature phase of contract management. Let's delve deeper into the pre- and post-signature stages to understand where CLM solutions can make the biggest impact on your organization.
Pre-Signature Features
Pre-signing stages include drafting, redlining, approval, and the signing/e-signing process. Although some full CLM software includes these features, most companies prefer to keep their documents in Microsoft Word during the initial stages. Here’s why:
- Familiarity and ease of use: Most people are well-versed in using Word or Google Docs for basic contract creation and editing. Introducing new software often requires training and can disrupt established workflows.
- Cost considerations: Many businesses already have licenses for Word or use free alternatives like Google Docs. Adding pre-signature features to a CLM can significantly increase the overall cost.
- Complexity of automation: While automating pre-signature tasks is appealing, it can be time-consuming to set up and maintain. Processes often change, requiring updates to the automation, and these changes can sometimes be difficult to implement without external help.
Recent advancements in artificial intelligence have also shown promise in streamlining other pre-signature tasks, like contract drafting and AI contract review. These tools are still evolving, however, and may require careful human review to ensure accuracy and completeness.
Ultimately, the decision of whether to incorporate pre-signature features into your CLM depends on your specific needs and priorities. It's essential to weigh the potential benefits against the cost and complexity of implementation.
In speaking to many companies, we've found that, while the concept of automating the upstream CLM process is attractive, the reality is often disappointing, expensive, and frustrating.
Post-Signature Features
For many businesses, the real case for CLM software lies in the post-signature phase of contract management. While some CLM software solutions offer tools for drafting and negotiating contracts, the majority of companies find greater value in features that help them manage agreements after they've been signed.
Once a contract is executed, the real work begins.
You’ll then need to store it securely, track key dates and obligations, ensure compliance with its terms, and quickly find specific information when needed.
This is where CLM software can truly shine.
Imagine a scenario where a seemingly minor oversight in a contract leads to a major financial loss. It happens more often than you might think.
A homeowners association in San Francisco, for example, lost control of their private street due to a $914 oversight in their compliance obligations, potentially costing them tens of thousands of dollars to rectify. Or consider the ski resort management company that lost a lucrative 20-year lease because they missed a renewal deadline, resulting in millions of dollars in legal fees.
These examples highlight the importance of effective post-signature contract management to unlock the full value of your contracts.
Look for a CLM tool equipped with these features:
- Centralized repository: Securely store all contracts in a single, easily accessible location.
- Automated reminders: Receive timely alerts for key dates, milestones, and obligations.
- Powerful search: Quickly find specific clauses, terms, or data points within any contract.
- Robust reporting: Generate customizable reports to gain insights into your contract portfolio.
- Collaboration tools: Facilitate seamless communication and collaboration among stakeholders.
- AI-powered organization: Automatically categorize and tag contracts for easier management.
The key is finding a CLM solution that strikes the right balance between functionality and ease of use.
Choosing the Right CLM Solution
Selecting the right contract lifecycle management software can be a game-changer for your business, but it's crucial to make an informed decision. With a myriad of options available, it's easy to get overwhelmed.
Consider these key factors:
1. Assess your scale and complexity
Start by evaluating your organization's size, contract volume, budget, implementation timeline, team availability, and organizational complexity. This will help you narrow down CLM solutions that are suitable for your specific needs.
2. Identify pain points and required features
Pinpoint the stages of the contract lifecycle that present the most challenges for your business. Then, determine the specific features required to address those pain points. For example, if contract creation is a bottleneck, look for CLM solutions with robust templates and AI-powered contract review capabilities.
3. Consider vendor factors
Evaluate potential vendors based on factors like free trials, pricing transparency, support availability, and implementation fees. Choose a vendor that aligns with your budget and offers the level of support you require.
4. Address potential blockers
Determine your requirements for user management (e.g., single sign-on, two-factor authentication), security certifications (e.g., SOC2, ISO), and compliance regulations (e.g., GDPR, HIPAA). Ensure the CLM solutions you consider meet these essential criteria.
5. Prioritize fundamental features
Regardless of your specific needs, prioritize CLM solutions that offer a centralized repository for all your contracts, robust date management capabilities to track key milestones and deadlines, and customizable reporting to gain insights into your contract data.
6. Look for pain point-specific features
Beyond the fundamentals, seek out additional features that directly address your identified pain points. These could include intake workflows, templates, AI-powered contract review, in-app editing, clause libraries, approval workflows, and e-signature integration.
By carefully evaluating your priorities and considering the unique challenges you face, you can find a solution that empowers your team, mitigates risks, and drives your business forward.
ContractSafe: The Perfect Blend of Pre- and Post-Signature Solutions
ContractSafe offers a user-friendly platform that excels in both pre-and post-signature contract management, providing essential features without unnecessary complexity, including:
- Templates: Streamline contract creation with the ability to create your own templates, ensuring consistency and compliance.
- AI-powered organization and categorization: Automatically organize and categorize contracts based on their content, making it easy to find what you need when you need it.
- Centralized repository: Store all contracts in a secure, searchable, cloud-based repository with granular access controls.
- Optical character recognition (OCR): Ensure that even scanned documents are fully searchable, maximizing the value of your contract data.
- Automated reminders: Receive timely notifications for key dates like renewals, audits, and payments, so you never miss an important obligation.
- Customizable reporting: Gain valuable insights into your contract portfolio with customizable reports tailored to your specific needs.
- Robust security: Protect sensitive information with enterprise-grade security features.
No one wants to be responsible for losing control of a valuable asset or overlooking a critical contract requirement. By choosing ContractSafe, you can prevent those disasters and unlock the full potential of your contracts.
Ready to experience the difference? Sign up for a demo today and see how ContractSafe can transform your contract management processes
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