By Zilan Keskin
WHAT IS CONTRACT LIFECYCLE MANAGEMENT?
Contract lifecycle management (CLM) is a process by which key contract stages are automated and streamlined in order to leverage legal agreements within a unified workspace. Key stages included in contract lifecycle management is: the initiation process, authoring, workflow, negotiation and approval, the execution and the contract renewal. The concept of contract lifecycle management is one that can be applied to any organisation that deals with legal and contractual agreements. This is because CLM is vitally used for tracking and managing all aspects of a contract for its successful performance, compliance and every stage of the document’s lifecycle that follows. The CLM process is introduced and utilised from the very moment a contract is proposed, thus following a management process throughout the delivery of the promised good or service and into the contract renewal.
WHAT DOES IT DO?
CLM assists organisations and companies in their risk management of contracts, the assurance of the contract’s regulation compliance, tracking progress and in the maintenance of the company’s organisation from the very beginning. An effective CLM process can prove to be expressively valuable for reducing cycle time, increasing satisfaction among business stakeholders, reducing potential revenue leakage, speeding up the procurement of needed goods and services and managing information that can drive business intelligence.
Whether updating the business through its standard processes or identifying contractual information on paper as part of remediation, a successful CLM process is underpinned by the basic principles of change management. CLM brings companies from its current, stagnant contract process, to a future-facing desirable state using what is effectively, a coordinated and structured approach in collaboration with other stakeholders.
HOW CAN IT BE INCORPORATED INTO ORGANISATIONS?
As documents grow in relevance and number it becomes increasingly harder and complex for organisations to draft, update and manage contracts. Organisations can face challenges in conducting a uniform process of drafting contracts, keeping up to date with templates and assuring approved workflow in negotiation modification. In the event of changes to the legal and regulatory environment, organisations must be able to quickly and reliably find, evaluate and amend relevant documents; a CLM tool can, in this retrospect, be utilised to provide the ultimate transparency and efficiency for any given organisation. These days, there are a variety of software options available for contract lifecycle management due to very nature that there cannot be a “one-size-fits-all” CLM solution for any agency or organisation.
THE EXISTING MARKET THUSFAR
One of the principle challenges in adapting to the modern, techno-centric business environment is overcoming consequent cognitive overload. Due to the nature of having greater access to information now more than ever before, automated systems have become recognised as a necessity for producing effective platforms for information storage. Advanced contract lifecycle management software powered by artificial intelligence automates CLM which subsequently constitutes a simplified contract management process for legal departments and all businesses alike.
As mentioned above, there are numerous CLM systems in place, with notable providers being ContractWorks, Conga Contracts, Concord, Newgen, Corecentric LLC and Model N Inc. All of these software providers have one thing in common- they have an aim of providing effective, serviceable, user-friendly software that can maintain all contracts and documents within one, safe workspace. ContractWorks for example, have a designed solution to addressing the signing, tracking and managing of contracts, featuring a searchable repository for contracts for all companies and organisations. This is similar to the practices of Conga contracts, which helps users by automating different steps of contract lifecycle that include creation, negotiation, approval and renewal.
The contract lifecycle management market has seen a key growth amidst the covid-19 outbreak, with expected 3.5x the exponential growth between 2020 and 2030. CLM manufacturers are leveraging the requirements to keep track of contract information and AI growth, as cloud-based solutions are accounting for major revenue share, owing to cost-efficient, seamless integration and simplified interfaces. Due to the evident benefits of CLM, leading participants in the market are investing increasingly toward their product development, thus creating a growing competitive landscape within the market. This is something that can be expected to continue as knowledge of the CLM framework becomes more comprehensive overtime and organisations adopt these measures to maintain business stability and success.
