Do you want to increase productivity and, at the same time, reduce costs? Then contract lifecycle management (CLM) is the way to go. However, if not managed correctly, it can cause severe delays and make your prone to quite a bit of risk.
Knowing where to start is the key to speeding up your contract lifecycle management. Like a pyramid, start with putting down a solid base or foundation and gradually working your way up. The following are the four steps to building such a pyramid.
1. Keeping your Contracts in One Place:
Companies run into severe delays when different contracts are spread divided among various departments and offices. As a result, employees have to go through an extensive network of permissions and individuals before accessing the contract they require.
One common problem seen as a result of this is when everyone within an organization heads towards the legal department when it comes to contracts of any kind. The legal departments, however, neither own the contracts nor have easy access to them. As a result, substantial delays are seen. Moreover, this can also jeopardize the contracts as they are not attended to because the legal department does not access them. At such a time, tools such as contract lifecycle management software substantially help manage and provide quick access to contracts efficiently.
2. Setting a Process for Contracts:
When contracts of a legal nature are handed over to departments, they fall into a never-ending abyss. No confirmation receipt, updated or procedural follow-ups are given. This leads to the whole process being frustratingly slow. Consequently, whenever legal departments are required to respond to specific contracts, they first must go through a ton of wasteful inquiries.
All of this agony can be avoided by simply setting up the contract process. This means that each new contract goes through a simple process outlined by each department’s workflow. This way, each employee knows which process the deal is currently in and how long it will. As a result, they can manage their work efficiently while at the same time coordinating other activities.
Establishing such a process allows you to keep performance updates am maintain certain work standards. For example, a process like this can highlight how long each step takes on average and see whenever there is an improvement.
In the same way, this technique can also assist in making estimations for the future. Therefore, it can help in setting up budgets that are more cost-efficient. Lastly, it can help you track employee productivity. I’m different departments and make changes to improve the results.
3. Use of Automation to Build Contacts
It is highly likely that you will have to create similar contracts, time, and time again. Using automated software can significantly speed up this process.
The right sort of contract lifecycle management can help you create playbooks for different contracts to reduce back and forth communication. For instance, a playbook could be constructed for non-disclosure agreements (NDAs), including three approved templates and the steps for sending, reviewing, and supporting the contract.
Most of the time, templates provide self-service functions for necessary contracts. Instead of running to legal every time sales bring in a new client, sales agents can answer several questions, input a few data points, and have an automatically generated pre-approved contract. Similarly, this process can also help with inconsistent language use in the contracts by having pre-determined language standards already built-in.
4. Enabling External System Integration:
In many cases, information through contracts or otherwise needs to be communicated between departments and floors above and below. Usually, companies rely on the slow and old process of manual transmission. This leads to many human errors that eventually build up and cause a loss of substantial money sums.
A simple set up of external integration can help you avoid all these problems. For example, Integrations with spend and matter management, customer relationship management (CRM), enterprise resource planning (ERP), or vendor management platforms allow you to push data from CLM software to an external system directly. This enables excellent communication between departments and makes difficult jobs with high amounts of coordination seem very easy. This efficiency leads to notable reductions in costs in the long run.
Want to get ahead of your competition? Managing the contract life cycle is a crucial step that allows you to control one of the most vital parts of any business, the contracts. Get a hold over these through automated software, and your road to a better future has already started.
5. Data of Leverage:
Data is one of the most valuable levers for in-house teams, so it’s no surprise that the data leverage is number 5 on our list. Once your contracts are centralized, processes defined, metrics outlined, and integrations set up, use the wealth of data you have collected to improve your CLM efficiency.
Contract lifecycle management software reports help identify common delays, information silos, and areas in need of improvement. To help you hit the ground, look for a contract lifecycle management solution that has out-of-box reports, such as a report that details the average time spent per contract type (e.g., an NDA contract). This type of report can break down data by phase, so you can see if a particular team or resource is overloaded and causes delays.