Do you know that 40 percent of global CEOs think their organizations will no longer be economically viable in ten years? This came up in PwC’s 2023 Global CEO Survey, which also spotted that 52 percent of CEOs have already begun cutting costs.
Ask yourself- why did you choose to go for contract lifecycle management (CLM)? To get bragging rights in your industry? To just tick another box because everyone else is doing it? To find some magic pill that will immediately relieve you of all contract-related headaches?
The beauty of contract lifecycle management (CLM) is its invisible but ruthless ability to squeeze real value out of the contracts you choose, sign and implement. In the treadmill of day-to-day business, it is effortless for a company or a team to invest in a contract and then forget about it. Sudden demand and other priorities come in the way while the contract is pushed slowly into a corner and sits comfortably- in a perennial shadow.
If contracts are the lifeblood of business, then CLM or contract lifecycle management (CLM) is the heart that keeps pumping everything properly. Without an effective CLM, a business is always at risk of leaking blood – in terms of costs, expenses, time, business value, and relationships.
The thing that keeps any contract anchored is a three-alphabet word called the ‘SLA’ or service level agreement. This is where the client and the vendor get on the same page of what is expected from each party, at what stage, and on what terms. The inability to meet SLAs is also well described in terms of penalties, corrective actions, and alternatives. SLAs are a great way to make vendor management streamlined, result-oriented, and frictionless. Without a clear and well-managed SLA path, any contract can go awry. Without SLA optimization, a contract can easily slip down a dangerous hill of poor performance, hidden costs, and unnecessary conflicts. That’s what is happening right now at many companies.
Contracts are like laundry. Wait till you raise an eyebrow. Hear us out.
Just like that new shirt that you buy excitedly, a contract is full of ‘new’ feelings when you put it in your business wardrobe. It is full of new hope- which can rub off well on all the other processes sitting in that wardrobe too. But with time, this very ‘new’ contract gathers dust, neglect, and crinkles. Unless paid attention to, it can quickly end up in a forgotten pile of clothes. And it stinks.
Have you ever wondered why even the most cutting-edge, high-profile contract lifecycle management (CLM) initiatives fail? All that money, all that top-notch technology, all that time, they just spilled into nothingness!
As much as we ignore it, the truth stares us clearly in the eye. We expect contract lifecycle management (CLM) to work as an island. We assume it is just some magical switch we need to flick, and there would be light all around.
The essence of any effective contract lifecycle management (CLM) initiative lies in the ultra-fast speed and visibility that contract workflows can embrace. The entire purpose of contract lifecycle management (CLM) is to inject agility, transparency, efficiency, and uninterrupted movement into all facets of the contract management area. Whether it is documentation, approvals, or precise tracking of contract updates, speed and real-time alerts are of the utmost importance. So is the need to integrate all vendors and relevant people/teams on a single page. This any-time, any-where, any-function fluency cannot be achieved without Cloud under a CLM’s hood.
Where does a business derive its speed and value from? From many places, people, and resources. But a large part comes from being confident that the equipment, material, and services you need to deliver to market- are available when promised and as promised. All this is painstakingly and rigorously captured in a contract. A contract is, therefore, much more than a piece of paper. It is a beacon that guides all concerned parties. It ensures the business runs smoothly without delays, kinks, and confusion.
Do you know how fragile and exposed your data constantly is? A 2022 Data Breach Investigations report from Verizon shows that 82 percent of breaches involve human errors and misuse—also, 62 percent of incidents in system intrusion patterns involved the compromise of partners. Stolen or compromised credentials are the most common cause of a data breach and take the longest to identify. This attack vector can cost USD 150,000 more than the average cost of a data breach. Also, business email compromise stands at $4.89 million, and vulnerability in third-party software at $4.55 million.
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