July 19, 2024 | Procurement Software
Contract management is critical to the functioning of businesses, governing each and every aspect of operations — be it legal, procurement, sales, finance, human resources, or partnerships and collaborations. A contract comprehensively defines the scope of work, terms and conditions, obligations and responsibilities, payment terms, duration, performance standards, confidentiality, termination clauses, dispute resolution, warranties and guarantees or assurances, liabilities and indemnities, and compliance.
Outdated and manual processes in contract management lead to operational silos and increased risks. Contracts are more often scattered across various departments and systems, making them hard to track and manage; missed renewal dates that lead to unfavorable auto-renewals or lost opportunities; compliance issues due to inconsistent contract language; and lost man hours in searching for may be just one clause in the legal document. All of these challenges expose businesses to risks that may be difficult to detect and mitigate.
The aforementioned challenges are likely to compound with growth in business, but contract lifecycle management software can address them, ensuring streamlined operations, reduced risks, and better business outcomes.
Business ecosystems worldwide have become increasingly complex, requiring efficient process flow and complete control over what’s going on. A contract lifecycle management software does that, and also opens up opportunities for cost savings and revenue optimization.
Other benefits of contract lifecycle management software include:
CLM software centralizes contract data and documents, enabling complete visibility and control over contractual agreements. This also enables companies to cut risk of non-compliance and costly oversights.
CLM software facilitates easy negotiations and contract approvals with the help of capabilities such as redlining, commenting, and real-time tracking.
Automated tracking of deadlines, contract obligations, and regulatory requirements enables easy mitigation of risks and ensures compliance.
CLM-driven deep insights into contract performance lead to informed decisions and informed contract management strategies.
Cloud-based CLM software is inherently scalable and flexible, enabling enterprises to easily adapt to changes and futureproof themselves.
Contract lifecycle management software addresses critical issues in contract handling, enabling enterprises to streamline the entire process from creation to renewal. The centralization ability of CLM software solutions helps businesses tackle issues related to disorganization and inefficiency. This also enhances visibility, allowing easy searching and retrieval of contract information, while also providing valuable insights into contract performance and obligations.
CLM software significantly reduces compliance risks by tracking important dates and deadlines such as contract creation and renewal, automating alerts for renewals and expirations, and ensuring adherence to regulatory requirements. It standardizes contract creation, reducing errors and inconsistencies, and speeds up approval processes through streamlined workflows and electronic signatures.
CLM software also tackles challenges in collaboration and reporting. It also facilitates better communication between stakeholders, enables version control, and provides robust analytics for data-driven decision making.
Security issues come at the top when it comes to risks. CLM software’s enhanced document controls and audit trails capabilities address any possible security concerns that may arise.
Teams such as legal, procurement, sales, finance, and human resources find CLM software particularly useful because they deal with a high volume of contracts or complex agreements that require careful management throughout their lifecycle.
The software helps these functions streamline processes, reduce risks, and ensure compliance, which are critical aspects of their roles. The specific teams benefiting most from CLM may vary depending on the nature and structure of the organization.
Let’s take a quick look at the business functions that benefit from CLM software:
Contract lifecycle management software is a strategic investment for the future and not merely a technology upgrade. It empowers businesses to address the pain points in contracts, operate more efficiently, reduce risks, and unlock new value from their agreements.
Explore how GEP’s contract lifecycle management software can maximize value and minimize risks.