There’s a circle of life for everything – plants, animals, and even the stars in the sky. Business proceedings, including the creation and execution of contracts, are no exception. Contracts allow you to build partnerships, provide services, and get your work done – but they also create work.
Investing in the tools you need to digitally manage records and contracts can save your team significant time and energy. Below, we dive into the basics of digital contract lifecycle management, including what you can do to start digitizing your own system.
What is Contract Lifecycle Management (CLM)?
Contract lifecycle management involves everything that goes into creating and executing a contract, from initiation to review and termination. You might also see CLM referred to simply as contract management or contract administration.
Regardless of terminology, contract lifecycle management usually requires a combination of technology, clear business processes, and tools that help organizations manage data more efficiently.
As contracts progress throughout their lifecycle – which we’ll break down in a moment – they need to be nurtured and monitored. Using CLM techniques and software to do the heavy lifting makes it much easier to master contract management without letting it become a hindrance.
When done effectively, contract lifecycle management can help your organization:
- Improve compliance
- Increase efficiency
- Reduce costs
The 7 Key Phases of Contract Lifecycle Management
To identify areas where you can use technology to help your teams save time, it’s first helpful to understand the building blocks of the contract management lifecycle.
From idea generation to review and, ultimately, contract retention, here are the key stages of the contract lifecycle that you’ll need to manage:
- Initiation. This phase is all about defining the reasons you need to enter into a contract. During initiation, parties can outline goals, risks, and expectations.
- Negotiation. With the need for a contract established, both parties must now work together to establish contract terms and ensure the partnership is mutually beneficial.
- Review. Contract creation and drafting begin, and key stakeholders consult their respective legal teams to iron out the details. During this phase, CLM software can help parties create several drafts of the contract and keep each iteration handy.
- Approval. With a contract written, it’s time to seek approval from management. Once approved, the contract officially sets the partnership in motion. This is where management is often most important, as it keeps the workflow moving and ensures all parties are on the same page.
- Execution. The contract is officially approved, and its words become actions. The contract gets stored and referenced as needed to resolve disputes or answer questions.
- Monitoring, auditing, and ongoing management. Regular contract reviews take place to ensure that all parties are fulfilling their contractual obligations.
- Closure: renewal or termination. If the contract does not specify renewal dates, this phase is when it’s time to evaluate whether to terminate the agreement or draw up a new one.
Because there are many stages to progress through, contract management is a process that’s prone to bottlenecks. It’s also one that can be difficult to keep up with as your organization scales.
That’s why it’s smart to create a digital contract lifecycle management system tailored to your needs.
How Contract Lifecycle Management Software Can Help
Contract management is important but time-consuming and complex work, whether you have a dedicated contract manager or not. Fortunately, contract management software can help you automate the process and keep up with your business needs as you grow.
With the right software, you can skip the hassle of searching endlessly for stray documents and organize key documents using a digital contract repository. You can also ensure that all contract data and metrics are easily searchable so you never have to look far to find the information you need to make strategic decisions.
Let’s take a closer look at some specific ways that contract lifecycle management tools can make a difference.
Automated Contract Management
There are all kinds of opportunities to automate contract lifecycle management, depending on your needs. With comprehensive solutions from CDP, you can build a system that makes sense based on your teams and workflow.
Here are just a few examples of ways you can leverage software for automated contract lifecycle management:
- Create contract intake forms to streamline the writing process. Fill in fields with key information, and let your form do the rest!
- Easily create audit trails and access version logs to compare changes in contract language.
- Establish deadlines for different phases of contract management and prompt stakeholders to take action with automated reminders.
- Move contracts through the approval pipeline with automated routing that sends materials to the right people at the right time.
Centralized Storage
CDP helps you build a digital contract management repository with the help of Laserfiche, an enterprise content management platform. Create a digital contract control center where you can visualize and manage all phases of the lifecycle, from sourcing to execution to long-term monitoring.
Smart scanning capabilities allow you to upload physical documents to your digital repository in seconds. Vital data is automatically captured and recorded so that you can easily search for contracts with keywords.
Reduced Bottlenecks
Eliminate bottlenecks during approval by reducing the work it takes to access, review, and sign contracts.
Tools like eSign allow you to collect digital signatures effortlessly without having to hop from one tool to the other. Send contracts along to different parties and communicate digitally to create a record of where your document is at and what you still need to do to progress.
Digitize Your Contract Management System with CDP
No matter the kind of business you do, it’s likely that you’ll need to juggle a contract or two at some point. As you build partnerships and take your business to new heights, you need a contract management system you can rely on.
Whether you already have a system in place or not, going the paperless route can help you save valuable time, resources, and money. Plus, when you work with CDP, you get access to customized software solutions that make sense for your workflows.
Our mission is to help you get more valuable work done faster. Ready to take the first step? Start a conversation and book a demo today to learn more.