Your business may be ready to move from manual contract management to a CLM system. Or, it may already have a CLM system in place that isn’t meeting your requirements. But with so many solutions and providers on the market, it can be difficult to determine what - and with who - your next move should be.
The purpose of a CLM system is to simplify the process of contract management - regardless of your starting point.
Before assessing the market, your business should gather stakeholders responsible for contracts and ask:
- What is the current approach to contracts and what is the ideal future state?
- How can we streamline internal processes and minimise time-to-contract?
- What would be needed to make day-to-day workload more manageable?
- Where are the bottlenecks or areas of frustration?
A CLM system should support end-to-end management of a contract’s lifecycle while improving visibility, driving efficiency and reducing existing portfolio risk. In this article, we explore the must-have features of a CLM system and how they help to address the requirements above.
What is a CLM System?
A CLM system - or contract lifecycle management system - is technology designed to automate and streamline internal processes related to contractual agreements. Whether it's on-premise or cloud-based, the solution helps businesses to manage the contract process from inception through to close out.
A contract management solution is often sought by businesses going through digital transformation. They’re looking to improve their processes, save time, increase visibility and become more efficient in their processes.
Who should use a CLM system?
Many CLM providers target Legal teams that are trying to manage contracts through a combination of email, Excel spreadsheets and Google Drive. At Gatekeeper, we believe that a CLM system shouldn’t just work for your Legal team.
CLM should work for your entire business - bringing internal teams together to improve contract outcomes. Contract responsibility doesn’t belong to a single team, it belongs to the entire organisation.
If you recognise any of the following scenarios, it’s time to consider investing in a CLM system:
- Your contracts are everywhere and nowhere, making them difficult to find
- You have multiple versions of the same contract but don’t know which is up-to-date.
- Contracts have auto-renewed without your knowledge, committing unnecessary spend
- Compliance is top of your priority list but you’re finding it hard to maintain
- There are bottlenecks within your processes causing internal frustrations.
Contracts are essential components of all businesses. They often have multiple touchpoints. Legal, Finance and Procurement teams are all responsible for outcomes and so a CLM system should work for everyone. Beware LegalTech CLM solutions that only resolve some of the problems within your organisation.
How a CLM System Will Improve Your Business
A contract lifecycle management system helps businesses to resolve issues caused by manual management. Improvements are made through centralisation, automation and the ability to prioritise collaboration. You may be looking to solve a simple use case such as storing all your contracts in one place. You may need a system that tells you everything about your suppliers as well as your contracts. So how do you know which system to choose?
Below, we take a look at some of the non-negotiable benefits
1. Increases contract visibility and insight
A CLM system should be built around a contract repository. All contracts, documents and metadata should be stored centrally. Relevant stakeholders with the right permissions are able to easily and securely access the information they need. Contract management software negates the need to spend hours searching for agreements and prevents fragmentation.
Not only are contracts easy to find, but key contract metadata becomes more visible. This allows for proactive planning. This makes every aspect of managing a contract’s lifecycle easier to manage.
Renewals can be planned for rather than occurring without knowledge. The risk of certificates expiring can be mitigated. Obligations can be easily tracked.
Not only are contracts kept in one place, but stakeholders will be able to see a clear timeline of related activity. CLM systems provide a transparent and auditable history of all edits made.
This gives teams the confidence that they are executing and making decisions based on the most up-to-date version. By working from a single source of truth, stakeholders can be truly aligned in any decision-making process.
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.
Bottlenecks, administration and delayed time-to-contract can all be minimised with a CLM system. Contract management software automates and standardises internal processes.
With a Kanban Workflow Engine, all processes are visualised so it’s easy to see where a contract is and who its progress lies with. Being able to quickly identify bottlenecks means teams can take early action to resolve the issues and move the contract forward.
Internal efficiency is also driven through auto-actions. With a CLM system, teams can auto-create contracts such as NDAs and MSAs, saving them hours from low-value, repetitive work. The more time teams have to spend on strategic activities, the more worthwhile the CLM system is.
Creating internal efficiencies with a CLM system allows teams to work on what really matters. It gives stakeholders back valuable time, allows contracts to progress more quickly and gives teams room to focus on other areas. These areas can include risk mitigation, performance monitoring and
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 duration of the agreement.
Gatekeeper is the only CLM and VLM system that can resolve these issues. This powerful combination provides:
- Risk intelligence feeds so you can see the complete history of potential suppliers
- Automated notifications when the status of your current suppliers change
- A dedicated Supplier Portal that allows you to automate vendor onboarding
- The opportunity to delegate data input to your suppliers and improve compliance
- A dedicated messaging centre to communicate with suppliers
By knowing everything about your vendors and their contracts, your business will always be in control. You can stay one step ahead of risks and make informed decisions about which contracts to renew or consolidate.
Businesses can ensure all obligations are being fulfilled - helping them to get the best possible value from agreements.
Contract management is only effective when it’s built around automation, visibility and collaboration. Businesses still trying to manage agreements, risk and relationships through spreadsheets and emails are falling behind their competitors and potentially falling into trouble.
Implementing a CLM system is a natural step forward in improving your approach. If you want to know more about key features, or how Gatekeeper can help, get in touch today.