How to choose which CLM tool is best fit for my company?
Contract lifecycle management (CLM) is the answer to all your contract-related worries. This solution and process will help you manage not just individual contracts but also entire agreements from the start through the finish! From outsourcing, procurement, sales, nondisclosure, intellectual property (IP), leasing, facilities management to employment and other licensing, it may include several types of third-party or internal contract agreements.
The CLM spans all processes associated with the life cycle of each contractual agreement – from initial request through contract discovery, authoring, negotiation, valuation, approval, execution, order tracking/matching, compliance/obligation management and dispute management to auditing and reporting.
Several organizations across sectors use advanced tools to manage their contract life cycle efficiently and save costs and time.
According to Goldman Sachs, such kinds of tools can help accelerate the contract negotiation cycle by 50%, reduce erroneous payments by 75-90%, and cut operating and processing expenses by 10-30%.
Due to these enormous benefits of CLM tools, organizations of all sizes and industries, especially regulated sectors such as pharma, healthcare, and energy, are rapidly adopting CLM tools as a part of their digital transformation strategies. But all these benefits are realized when you select the appropriate CLM tool that matches your business requirements.
Before finalizing any CLM tool for your business, you should,
- Look at your current situation
- Analyze the gaps in your current contracting process
- Your position in legal digital transformation when it comes to contract management
Once you are done with enough introspection about your organization, you should keep the following points on top of your mind while selecting the contract lifecycle management (CLM) tool.
Top 5 features to look for while choosing the best contract lifecycle management (CLM) tool for your organization
1.The capability of automation: The ability to automate various business processes should be the first consideration when choosing the best contract lifecycle management (CLM) tool. Automation-powered CLM tools help you ensure compliance, mitigate risk, reduce operational cost, and shorten the negotiation cycle. Automation-powered CLM tools can automate repeated and laborious tasks like setting reminders for deadlines and upcoming tasks. According to Deloitte, intelligent contract lifecycle management (CLM) can help streamline processes and increase efficiency to unlock additional value from contracts. In addition, there is a 60% cost reduction with intelligent CLM implementation versus the traditional model.
Are you wondering what the features that make the CLM tool automation powered are?
Let us reveal the key features in the CLM tool that affect business process automation.
- Automated workflow
- Document assembly using clause and template libraries
- Automated field merging from request and intake forms
- Real-time collaboration
- E-signature and other business application integration
In the market, many CLM tools are available that offer you the same features to make your process fully automated. Then what to choose and how to choose the best one? The key is to look for a tool that doesn’t require any coding, and you can create the workflow using a drag-and-drop workflow builder. In addition, the tool should reduce your operational cost and eliminate any cost of the developer or dedicated IT resources.
2.OCR technology: The second feature which you should not miss while choosing the CLM tool is the integration of OCR technology within the tool. The optical character recognition (OCR) technology-powered CLM tool can automatically compare and track language changes throughout the negotiation. And this even makes the contracts searchable by texts and verifiable against templates and clauses within your library.
3.Electronic signature: If you want to achieve the most effective and proactive CLM, then you can’t ignore the e-signature. A digital signature is the CLM tool’s most essential and expected component. With the integration of digital signatures in the CLM tool, businesses have saved up to 78.6% and decreased the average time it takes a document to get signed from 5 days to 37minuts. For this, you must choose the CLM tool with an inbuilt e-signature feature or support integration of e-signature tools from industry-leading brands like Docusign, Hellosign, Panda doc, etc.
4.Complete CLM capabilities and support: We have seen that the CLM tool should automate your business process, it should have OCR technology, and it should be able to include e-signatures, but all these things will work only if your tool has the capability to include all the features and functionality your organization needs. Is the CLM tool you choose able to support the end-to-end contract lifecycle from request and intake of a contract through its termination?
Your CLM should be able to manage and automate various phases of the contract lifecycle and activities within each phase. There are three phases of the contract lifecycle: pre-execution, execution, and post-execution. The CLM tool you are choosing should work the way you work. It should let you activate each process stage as you want and should integrate into your current processes.
5.Ease of use: Above all the factors necessary for the selection of a good CLM tool, the one which you can’t ignore is the user-friendliness of the tool. Until and unless it’s easy to use, a tool will not be adopted by anyone, no matter how much it’s advantageous. So make sure your CLM tool is intuitive, easy to use, increases compliance and adoption across the business, and is sustainable.
Choosing the right CLM tool is a prerequisite for the immediate and long-term success of your organization’s contract management. Therefore, considering the above-mentioned points while choosing the CLM tool for your company will lead you to select the best fit tool for your company.
For more information on choosing or developing the right CLM tool and successfully transforming contract lifecycle management digitally in your organization, talk to our CLM experts.