BENEFITS OF USING THE CONTRACT LIFECYCLE MANAGEMENT

1. Increases Contract Visibility and Insight

A CLM system should be built around improving contract visibility via a centralized repository. All contracts, documents, and metadata should be stored centrally. Relevant stakeholders with the right permissions can easily and securely access the information they need. Contract management software negates the need to spend hours searching for agreements and prevents fragmentation.

2. Creates Internal Efficiency

Manual processes can be slow and convoluted. Daily activities become dedicated to chasing colleagues, suppliers, and the whereabouts of an agreement. Under these circumstances, it can be difficult to know where an agreement is in a process at any given time and hard to progress if the responsibility is unclear. 

3. Improves Relationships and Experiences with Third Parties

Executing a new contract often means starting a new relationship with a third party. This naturally increases the level of risk throughout the portfolio. Vetting suppliers, onboarding them, and maintaining collaborative relationships can be difficult when managed manually. When these areas are inhibited by a lack of focus on efficiency, it can cause early frustrations that can foster bad feelings throughout the agreement.

4. Ways Your Business Benefits from a Contract Lifecycle Management System

Managing a contract well begins with understanding its lifecycle. For instance, the contract lifecycle of a sales operation might consist of five steps:

• First, you generate a quote using a Customer Relationship Management system (CRM)
• Then, you send over an e-sign document to bind the contract
• Next, you carry out the operation of making the sale and supplying the product
• After that, you store your contract in a database
• Finally, you book the contract using Enterprise Resource Planning (ERP) and keep track of your contracts from there. In contrast to having to manage the same contract using multiple applications, such as separate CRM software and separate ERP software, a contract lifecycle management system simplifies the process. This way, you manage all steps of all contracts in one single program, making collaboration faster and tasks easier to track. You also don’t miss deadlines and can access information from any part of the process through a few clicks.

5. Reduce the Need for Manual Tasks

A CLM system allows you to manage a contract’s front-end and back-end experiences without writing custom code. With the status quo of contract management being hyper-manual, tasks often exhaust more time and productivity than needed. Consider the five steps in the lifecycle of a sales operation contract again. A business uses CRM software for customer relations, and ERP software for bookings. However, businesses carry out the steps between these two first and last steps manually.

By using CLM software, you can streamline your process in several ways:

• Auto-generate a contract based on the quote you selected and send it to the customer for signature.
•  Send approval and renewal notifications to the right people and applications in charge of moving the contract along after a task is complete. 
• Auto-update and store the contract in your database once the customer signs it. With a CLM system, you can run through the entire sales process without needing to focus on manual tasks and ensure that no steps are missed. 

6. Automate What Happens Before and After a Contract

Although the above steps define the entire process of managing a contract, most businesses need to take care of several little details before and after that first and last step. For example, before you send your customer a quote, you need to access your business’s pricing document to find a category that fits your customer profile.

You also need to look at your discount matrix and find out if the customer might be eligible for a special pricing model. After the sale and the final step of booking are complete, the benefits associated with the contract must be activated. This requires linking the final agreement to the appropriate benefits package.

If the agreement meets a number higher than “X”, then you might have to activate a benefits package at a high value (for example, a special Service Level Agreement or Success Resource but if it meets a number lower than “X”, then you might have to activate it at a low value (such as limited online and email support).

A CLM system takes care of all the details before and after a contract is signed. It does not matter what platform these details function in, CLM software can access them from anywhere. For example, if after booking a contract you need to activate a customer’s special benefit to an external subscription such as Adobe, CLM can do this automatically.

7. Simplify the Process of Personalizing Contracts

 Speaking of details, since we understand that contracts are a bond between two parties, they should be easy to navigate. You want to be sure that the various details are always accurate and up to date so that you don’t waste your own time, or a customer’s time, during negotiations. Using a CLM system, you can create and manage multiple drafts of the contract, as well as access and edit it whenever you need to.

By allowing easy tracking of changes, CLM software allows:

• Transparency: No matter who drafts the contract, the details remain easy to track so the contract manager doesn’t need to keep going back and forth.
• Efficiency: Both parties are alerted to changes and know which draft is the most current so that they don’t waste time working on the wrong one.
• Accuracy: The contract manager can track all manual changes made to a document and all previous versions are automatically stored.

8. Measure the Success of Your Contract

You can also measure the success of your contracts using analytic tools that come with CLM software, such as Nintex Analytics. As a best practice, it is important to review how your contract is moving through a cycle, especially if this is one of your most commonly entered contracts.

With analytic software, you might find that a certain step in a process is taking too long to be approved, requiring permanent changes in a pricing model or approved customer profile. Similarly, you might find that customers always want to alter a certain section of your e-sign document, indicating that you need to change the original draft you always send out.

By using CLM software, you can measure the heartbeat of your business agreements and make necessary changes early. This helps you determine if the contract is helping your business reach your end goal so you can determine if it needs improvement or is even worth keeping. This is especially useful when managing a large number of intricate contracts.

PROEN’s WORKFLOW TO TRANSFORM YOUR BUSINESS

Segment 1 – Digitize Contracts

• Collate all the scattered contracts in Excel
• Convert the contracts into PDF format
• Put them into a share-point folder
• Make all the contracts easily searchable.

Segment 2 – Help Identify the Right CLM Solution

• Understand client as is process
• Know the pain areas
• Provide a high-level process flow
• Short-list from the market based on customer need for the CLM platform.

Segment 3 – Support in the Implementation of Appropriate Solution for CLM

• Identify fit/ gap requirement
• Prepare solution/ design
• Configure the application
• Demo and train the end users (Clients)
• Cut over and go live.

Segment 4 – Support and Maintenance Go Live

• Identifying the issues or new requirements
• Assess the impact and approach for implementation
• Make the changes and validate with end users
• Push the changes to the production.

Conclusion:

Contract management is only effective when it’s built around automation, visibility, and collaboration. Businesses still trying to manage agreements, risks, and relationships through spreadsheets and emails are falling behind their competitors and potentially putting them at a disadvantage position. Embrace digital transformation with PROEN to improve the efficiency of your business operations. Pertaining to what services and consulting we provide, visit our website at – http://www.proen.co.in and talk to our in-house experts.

For inquiries, write to us at – contactus@proen.co.in.

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References:

https://www.nintex.com/blog/5-ways-business-benefits-contract-lifecycle-management-system/

https://www.futuremarketinsights.com/reports/contract-management-software-market