Contracts form the foundations for business relationships. These voluntary agreements are made between two or more parties – whether that be customers, suppliers, owners or employees – and they lay out what’s expected from them. They are ultimately enforceable by law.

The average business has somewhere between 22,000 and 40,000 contracts, meaning the number of corresponding business relationships that require careful management can also run into the thousands.

Without the right contract lifecycle management approach in place, costs, risk and time spent on administration can easily increase to unsustainable levels. In this article, we explore what contract lifecycle management is and how investing in contract management software can help your business to save money and time, while building a stable platform for future growth.

You can explore different topics within this article by using the links below.

What is contract management?
Why is contract management important?
What is Contract Lifecycle Management?
Who benefits from Contract Management Software?
How does Contract Management Software generate ROI?
What are the key components of Contract Management Software?
Cloud Contract Management Software vs in-house and on-premise deployments
What is the best Contract Management Software?
How can Contract Management Software lay foundations for the future?


What is contract Management?

Contract management is an essential business process that supports:

  • Efficient initiation, creation and signing of contract documents
  • The delivery of all negotiated obligations and benefits
  • Ongoing cost control and reduction, especially around contract renewals
  • Risk mitigation and the achievement of flawless compliance
  • The implementation of repeatable, trackable processes to be used throughout the business

Despite these fundamental principles being applicable to any business, the approaches taken by different companies to managing these vital assets varies hugely. Some businesses still have their contracts stored away in a filing cabinet, some use Excel sheets to manage their contracts and others use contract management solutions.

There is no one-size-fits-all approach to contract management, but – as we explore later in this article – there are more intuitive, streamlined and automated ways of doing things.

In order to effectively manage contracts, it’s important that you build an understanding of the language contained within them and what that means for your business overall. We recommend reading our dedicated resources that explore some terminology more fully:

Why Are contract Lifecycle Management processes important?

Effective contract management is essential to business growth and resilience and it's a function that can hugely benefit from digital transformation. Businesses that don’t have any contract lifecycle management processes in place are likely to face issues including:

  • Higher costs
  • Increased contract risk
  • Overwhelming day-to-day workloads for in-house teams
  • A lack of time to address legacy issues or renegotiate contract terms
  • An inability to find contract information quickly

Not only will these issues pile on top of one another to create cumbersome ways of working, but they could result in serious financial consequences. These include:

  • Fines caused by a lack of compliance with policy or regulation
  • Supply chain failures due to obligations not being fulfilled or monitored
  • Poor supplier performance going undetected

In a recent piece of research, Mckinsey found that poor supplier performance can result in higher total costs of 10% to 20%.

For the majority of businesses, contract management is rarely a top-priority task. This is despite businesses being run on contracts, with the future success of any business being written into its contract documents.

So in fact, contract management and contract awareness should be a top priority at every business and the appropriate processes and technology should be put in place to support this.

What is Contract Lifecycle Management?

When reviewing processes and incorporating technology to enhance its approach, a business should consider whether it is looking to support contract management or Contract Lifecycle Management (CLM). Despite their indicative similarities, these are two very different approaches.

Contract management is an approach generally limited to the physical management of contracts. This includes processes such as entering contract information, file storing and archiving documents such as Excel sheets.

The contract lifecycle management process is manual, narrow in focus and is vulnerable to human error. Files can easily be stored incorrectly, lost or have information missing.

Contract Lifecycle Management, on the other hand, moves beyond the manual handling of documents. It is an alignment of people, processes and technology that enables a strategic approach from businesses that want to unlock the most value from their contracts.

A granular approach at every stage of the contract lifecycle is a positive step towards taking back control, mitigating risk and increasing overall lifetime value."



Contract Lifecycle Management Terminology 

Contract Lifecycle Management is made more effective when you have the right tools to hand. Below, we provided a summary of what you should look for when researching CLM software for your business. 

  • Contract lifecycle management: As discussed in depth here, contract lifecycle management is the end-to-end management of a contract from inception to close out or renewal. This process involves ongoing activities at every stage of a contract’s lifecycle to ensure the best possible outcomes are achieved.
  • Contract management workflow: Kanban Workflows are a way for businesses to visualise their business processes and identify any bottlenecks. They display what actions have been taken so far against a contract, what’s left to do and how the action sits with. By automating processes via workflows, businesses can create new efficiencies. 
  • Contract repository: A secure and centralised place in which to store your contracts. A repository gives your business increased visibility of their portfolio, including key dates, so action can be made ahead of time.
  • Contract audit trail: A complete and defensible history of all actions taken against a contract, with names, dates and time stamps. 
  • Software integrations: Choosing a contract management solution that integrates with systems that are already used throughout your business will increase user adoption and overall visibility. Integrations with Netsuite and Salesforce, for example, will allow your teams to work within solutions they are already comfortable with. 
  • eSignatures: Electronic signatures are the legally binding equivalent of ink signatures. Securely achieve faster time-to-signature and create greater efficiencies with CLM software that have a fully integrated eSign solution

If you want to explore further contract definitions and terminology, visit Gatekeeper’s contract management glossary.

Why is Contract Lifecycle Management important? 

Contract lifecycle management is important because, when executed with best practices, it allows businesses to maximise the value of their agreements at each lifecycle stage. The lifecycle stages of a contract can be broken down into the following areas and tasks:

  • Inception: capture requirements, details of potential partners and agree sign-off parties
  • Negotiation: focus on mutual value and protection of business interests that satisfies both parties
  • Execution: finalise documents for relevant parties to sign and then share with stakeholders either in hard copy or, ideally, electronically
  • Start-Up: extract key contract metadata and assign ongoing responsibilities to key stakeholders
  • Operation: Monitor obligation fulfillment, measure performance and manage any disputes if needed
  • Renewal: Review performance, negotiate better terms and strengthen your relationships with suppliers
  • Closeout: Record contract performance, check records for gaps and learnings, and archive the record for future reference

So how does Contract Lifecycle Management, supported by the right software, help businesses to unlock additional contract value?

1. Control legacy data with AI

Technology that uses artificial intelligence can help businesses to auto-extract key metadata and clause language from their contracts. Using advanced OCR, Machine Learning and phonetic algorithms, legacy data is accurately extracted and turned into fully digitised records. Not only does this accuracy allow businesses to take control of legacy data, but it also boosts overall compliance.

2. Manage approval controls and tracking

Businesses that handle complex contracts often need to bring order to chaotic business processes. This particularly applies to the approval process. With Contract Management Software, this stage of the lifecycle can be simplified. The right solution will allow you to drive conditional approval from data fields, including Contract Value. Any and all approvals are automatically linked to contract records which creates a searchable audit trail.

3. Share understanding of contractual obligations

Understanding and managing obligations is a critical part of managing contracts end-to-end. All internal and external parties should understand what is expected, what needs to be delivered, by who and when. Contract Management Software stores all obligation terms centrally, while supporting the creation of one-off and recurring events as well as alerts about instances of non-compliance, making contract lifecycle management more efficient and accurate. 

4. See all performance data in one place

Performance tracking allows businesses to make data-driven decisions about the future of their contracts and supplier relationships. The visualisation of supplier performance through Balanced Scorecards allows business to share results, drive corrective management and improve performance.

5. Never miss another contract renewal

Missed contract renewals can lead to delinquent spending on services that aren’t needed, or even on suppliers that aren’t delivering optimal performance. Automated software helps you to manage the renewals and close-out stage of the lifecycle through automated reminders about upcoming renewals. This gives stakeholders enough opportunity to review the real value being delivered by a contract and the option to look for alternative, more cost-effective options.

By effectively managing each lifecycle stage, businesses unlock the potential to generate more revenue, reduce costs and build stronger relationships with suppliers. Businesses that use a best practice approach to contract lifecycle management are the ones that will be able to drive the most competitive advantage.

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Who benefits from Using a CLM System?

Generally, any business with fragmented or incomplete contract data will benefit from a Contract Lifecycle Management (CLM) System And the benefits of implementing this kind of software are not limited to one specific team within a business.

Wherever there are contracts, or an interest in the financial performance of contracts, there’s benefit to be had. Consider all of the following teams as potential beneficiaries:

  • Legal teams
  • Procurement teams
  • Finance Teams
  • IT teams
  • Sales teams
  • Operations teams
  • HR Teams

Introducing a formalised contract lifecycle management process to your business may seem like a logical solution – especially if you’re the one dealing with disparate contract data on a daily basis.

However, stakeholders often need to be convinced of the benefits. Putting together a business case for contract lifecycle management software is the first step to demonstrating who will benefit – and how. 

If your organisation is looking to implement a CLM system for the first time, you should also present your stakeholders with a simple contract management solution such as ContractNow that will help them quickly resolve their most immediate pains. 

Many organisations, especially those that are growing quickly, will be able to identify with a number of contract-related pains. These typically include:

  • A lack of visibility over the total contract value and spend
  • Missed renewals, which result in unnecessary spend
  • Time-consuming requests for clarification on contract clauses and other basic admin
  • Missing key documentation such as insurance certificates
  • A lack of ownership of specific contracts and the associated business relationships due to staff turnover
  • No audit trail of previous actions

It’s also important to look beyond the contracts to see how the organisation works together around them. This may lead to the discovery of other issues related to poor contract management, such as a lack of confidentiality/data security, limited shared organisational intelligence or an inability to comply with upcoming regulatory changes.

These challenges and issues aren’t specific to one type of company or industry. The ubiquity of contracts means that proactive contract management can benefit many different types of businesses.

However, contract management software on its own isn’t the answer. Only those businesses that are willing to align their people and processes with the right technology will gain the key competitive advantage.

Investment in contract lifecycle management software is a great step forward for any business – especially those with no system in place or those still managing their contracts through Excel sheets.

For further information on who can benefit from contract management software, read:

Of course, not all businesses are at a stage where they can invest in a dedicated contract lifecycle management solution. This may be due to budget limitations, lack of resources to support the solution or it may simply just be the wrong time to invest.

However, it is better to take some steps towards a more centralised system than to struggle on with disparate data. That’s why we’ve created free Excel templates to help you manage the lifecycle of any contract in the meantime.

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How does Contract Management software generate ROI?

Contract Lifecycle Management Software requires a level of investment. The cost depends on a variety of factors, such as how many licenses you need, how many contracts you need to manage and the features you’re looking to add on to the core solution. With so many options on the market, it’s important that you do your research.

Before you make a purchasing decision you should seek to understanding the following:

  • What is the business problem that you’re trying to solve with contract management software?
  • What is the current cost of that problem in terms of wasted time, money and team morale and how does it change as your business grows?
  • How many people will need to use the software and who needs to have access?
  • What sort of pricing model will suit your business best?
  • Which internal processes need to be streamlined?
  • Do you need any specific features such as integrated electronic signatures, role-based access controls or AI-driven data extraction?
  • How will you align your people, processes and technology?

On a basic level, this will help you to determine how much a Contract Management Solution may cost you. But it’s important, especially if you’re building a business case, to understand the cost savings and value-add you’ll get from your solution.

Value-add through centralisation

Contract Lifecycle Management Software should ultimately lead to a variety of cost savings as a result of increased visibility and awareness.

The first time you view a complete, centralised summary of your contracts is always an eye-opening experience. It immediately surfaces information you weren’t previously aware of and presents points for investigation.

Duplicate or delinquent spend becomes apparent, disparities between teams or across territories are obvious and the timeline of forthcoming renewals gives clear areas to focus on.

With a single version of the truth, you will be able to unlock the full power of your contract metadata. You will be able to find information quickly, extract it and analyse it in a way that brings meaning to your business. Centralisation, simply put, gives you control of your contracts.

Value-add through digitisation

Centralisation is the first step in which contract management software can help your company move towards return on investment. However, this investment won’t be fully realised unless you can take advantage of digitisation.

Digitisation relates to two different areas:

  1. Digitisation of your contract documentation
  2. Digitisation of your contracting processes

Uploading your contract records and documentation into your chosen CLM software ensures they’re backed up and accessible to all via the cloud. The benefits of this have been brought home by the COVID-19 pandemic as workforces have been obliged to work remotely.

However, even under normal circumstances, this is best practice as it enables businesses to function efficiently across different sites and departments.

Digitisation also makes your documents searchable via OCR, meaning that key contract language can be located across all contract records. No more having to read through hard copies to find out what the key terms say, simply search and extract the information from the digital records.

Meanwhile, digitising your contracting processes is where the power of automation can be unlocked. Using a Contract Lifecycle Management Solution with a dedicated workflow engine will allow you to formalise your processes such as approvals and renewals and ensure they’re automated and followed every time.

Digitisation also makes it easier to measure the effectiveness of your processes. By looking at aggregated data over time, it’s possible to identify bottlenecks and other areas for improvement.

Use your solution to map your company’s processes, visualise workflows and break down areas of complexity.

By giving everyone involved in contract management the access they need to digital contract records and workflows, your business will benefit from increased team collaboration, faster time to signature, complete supplier records and completely transparent contract audits – so all parties know where they stand.

Cost savings through visibility

Much of the ROI from Contract Management Software is generated via cost-savings. In any business of reasonable size, duplication of costs becomes possible as multiple departments might sign agreements with separate suppliers for the same services.

By aggregating and categorising the data for central teams to view, it becomes possible to identify areas for consolidation, or where there might simply be delinquent spend. Not only can some costs be removed completely, it becomes easier to negotiate bulk discounts with suppliers if all spend is combined across different business areas.

The other key area to generate cost savings through visibility is around the point of renewal. It’s a common problem for businesses that they miss renewal dates and end up paying for services that are no longer required.

By making renewal dates known and prompting action with key stakeholders, contract management enables savings in two ways:

  1. The ability to cancel unwanted contracts prior to any auto-renewal dates
  2. The ability to investigate alternative goods or services to those offered in the renewing contract and then use that information to negotiate a better price

Visibility and automated reminders of contract renewals will allow you to renew, negotiate, cancel or consolidate – based on the best terms for your business. If these renewal dates go by unnoticed, you could be spending thousands on contracts that no longer fulfil a business need or that could simply have been made cheaper through a timely conversation.

Cost savings through automation

Perhaps a “softer” saving, a Contract Management Solution will be able to reduce the human resource efforts put into locating data within legacy contracts, generating supplier and contract records and tracking supplier performance.

The benefits of automation will eliminate administrative workloads usually experienced by in-house teams. ROI can be easily achieved by giving your people technology that works alongside their requirements so they can go back to focusing on their strategic goals that support wider business objectives.

It’s counterproductive and costly to have expensive employees such as in-house counsels spending the bulk of their time on contract admin rather than applying their specialist skills and knowledge.

To calculate the potential ROI of contract management software, you should add your estimated savings figure with your estimate of additional benefits together. Divide this total by your cost estimate and you’ll have your approximate return. Apply a benchmark of at least 3:1 to determine if the potential investment stacks up.

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What are the key components of Contract Management software?

The various components of a Contract Management Software should combine to enable effective management from cradle to grave. This means it can be used from contract inception right through to renewal and close-out. The key components for this are:

  • Contract repository software for all documents and meta-data to be stored in. This must be easily searchable and allow for contracts to be grouped and shared securely among stakeholders.
  • A workflow engine, which can be used to automate key contracting processes such as renewals or periodic certification collection.
  • Automated events and reminders, which ensure key milestones aren’t missed and appropriate actions are taken in a timely manner.
  • A reporting suite to provide both a high level, aggregated view of the contract portfolio and detailed, segmented access for more forensic analysis
  • Publicly accessible intake forms, which allow central teams to delegate administrative tasks such as contract requests to other parties, freeing up their own time for value-adding activities.
  • Contract review and negotiation capabilities including secure redlining.
  • Integrated electronic signatures to allow for seamless execution of agreements
  • Full, transparent audit trails for all activity carried out on every contract.

As you can see from the list above, any single contract has multiple touchpoints and multiple parties will be involved. Technology should be the backbone of improved processes, helping your people to unlock further contract value.

It’s also important, then, to recognise whether your current approach to contract management fosters and enhances collaboration across your organisation and between all parties involved. 

Cloud contract Management software vs in-house and on-premise deployments

Working in the cloud has been long noted for its benefits such as flexibility, scalability and increased collaboration, so it’s natural that your organisation should consider a cloud Contract Management Software. This type of software can unlock more specific benefits for your contract data: accessibility, resilience and centralisation.

Moving your contracts to the cloud by using a SaaS Contract Management Solution addresses a number of issues we’ve already touched upon, including:

  • Siloed information
  • Lack of spend visibility
  • Excessive manual workload
  • Increased business risk

SaaS solutions achieve this by enabling you to centralise all your records and make them far more accessible throughout the business. This instantly makes contract management more straightforward, eliminates inefficiencies and closes potential gaps in compliance.

Compliance should also be at the forefront of any organisation’s mind and this is one of the most important advantages of choosing cloud Contract Lifecycle Management Software over an on-site deployment.

All contracts are securely backed up and security updates are rolled out in the background. You can also designate different levels of access to different members of the team, aligned with their roles and responsibilities of the contract lifecycle. You never have to worry about losing vital information or key information falling into the wrong hands.

There are, of course, many reasons why your organisation may be deterred from picking a SaaS Contract Management Software. These include cost, IT requirements and concerns around security. But, unless there is a hard requirement to keep data onsite, there are many ways a SaaS contract management solution can alleviate these concerns:

  • Security capabilities are updated automatically without the need for further on-premise deployments. Choose a provider that prioritises the highest level of security with a ISO 27001 accreditation for Information Security Management and rigorous testing.
  • Scalability is more easily achievable with SaaS and many on-site deployments are likely to charge per-user/per-month pricing model. This can quickly increase overall costs and also limits secure collaboration.
  • Relying on your IT team can quickly leave them overloaded if the amount of contracts increases, or if they become more complex. By choosing a SaaS Contract Management Solution, you also choose a dedicated team who are the experts in their field and available to resolve any issues you may have – without disrupting other areas of the business.

Your investment decision should depend on your business and compliance requirements. There is no one-size-fits-all approach to contract management, but these resources on the benefits of SaaS solutions may help you:

What is the best contract Management software?

With so many options available, what is the best Contract Management Software for your organisation? Put simply, it is the one that gives your business complete visibility, control and collaboration across each stage of the contract lifecycle at the right price for your business.

As outlined, the technology you choose needs to be aligned to your people and processes, as well as deliver meaningful return on investment. Your budget, business requirements and overall objectives will all be deciding factors in choosing the best CLM Software.

Carrying out marketplace research is essential and you should take note of software reviews from other organisations. There are a number of recommended sources you could look at, including G2 and Capterra.

How can CLM software lay foundations for the future?

Contracts have all types of complexities, depending on how many touchpoints are involved, how many people are involved, how many services are agreed to and if there are different delivery dates and terms. Contract management should always be a collaborative process, so no team is ever bottlenecked, important dates aren’t missed and performance can always be enhanced.

Organisations themselves are just as complex, constantly evolving and adapting to different social, economic and political events. After all, these events can impact regulatory requirements, contract fulfilment and supplier performance. This has most recently been experienced throughout the COVID-19 pandemic.

These events demonstrate the importance of understanding your contracts in terms of obligations, risk factors and relationship management. CLM Software can address and support each of these areas, but it’s essential that the technology is future-proof too.

It should support your expected everyday requirements, but it should also help you to navigate changing circumstances and uncertainty.

Electronic signatures

Disruption, even on a global scale, doesn’t necessarily need to hold your business back. With solutions that support eSignatures, you can still get your documents and contracts signed anywhere, at any time, through any device.

Not only does this remote way of signing contracts enable overall business continuity, it also drives faster time to signature. Documents that have been eSigned can also be integrated easily with contract records, preventing any documents and their information from being siloed.

Naturally, questions will be raised about the legality of electronic signatures. By using solutions that are compliant with ESIGN, UETA and European eIDAS standards, you won’t have to worry. Once a document has been electronically signed, it is legally binding. The history of the document will also be easily auditable, so there is always a record of who has signed what and when.

Watch the webinar below to find out how Gatekeeper supports electronic signatures. 

Gatekeeper's eSign Webinar 

Search functions

Businesses can experience rapid change, meaning they need to act quickly to get their contracts, obligations and risk assessments in order. Contract management software is especially useful here. Not only does it mitigate issues surrounding disparate data, but it also makes the data easy to search through.

Taking COVID-19 as the example, many businesses will have wanted to quickly search contract language such as ‘force majeure’, ‘termination for convenience’ or even end-dates for contracts.

With the right solution, you will be able to search all data points within all documents – giving you quick access to information that will help you to make crucial decisions regarding your contracts.

Why Gatekeeper? 

Gatekeeper is rated as 4.8/5 on Capterra and is a High Performer for Summer 21 on G2. Our users who manage their contracts more effectively say: 

Gatekeeper has been a super helpful tool for our company in streamlining our contract management and approval process.”

Gatekeeper automates so many elements of the contract management process (i.e. reminders in various workflows, e-sign functionality) which has had a hugely positive impact on how much time my team have to use to manually chase.”

Gatekeeper has a clean user interface, it's easy to use, and the customer support has been excellent."

Kanban Workflows helped management stay on top of approvals and provided transparency into the negotiation and approval process.”

The user interface is very intuitive and the ability to customise allows us to easily integrate with existing processes and engage users in order to maximise the benefits of using the system.”

See what else our users say about their experience of using Gatekeeper on G2 and Capterra

Contract Management Case Studies

As outlined throughout this article, contract management software can solve many common issues that businesses face by providing centralisation, creating new efficiencies, automating processes and scaling with those who are quickly growing. 

Read our case studies to see how customers are improving their contract management processes with Gatekeeper.

  • AccentCare: simplifying obligation monitoring during acquisitions
  • BlaBlaCar: taking back control with a centralised repository
  • Hakkasan Group: securing contract management with stringent permissions
  • Missouri Employers Mutual: minimising contract risk with intuitive software
  • Mollie: implementing scalable contracting process with technology


Contracts are so much more than a signed piece of paper and they need to be managed with best practice approaches at every stage of their lifecycle. Our contract management resources can help you get started with the process. However, your people and processes should be aligned behind the approach you take – with both being supported and enhanced by contract management software.

CLM Software is a great way to unlock the power of your contract data, make meaningful business decisions and create cost savings across the organisation. The right solution will give you overall visibility of all your contracts, help you to identify any potential risks and allow you to evaluate overall supplier performance.

A centralised, scalable and auditable record of all your contracts, will ensure everyone involved can access the information they need. Having this information in turn will enable you or your team to make the right decisions to ultimately save costs, drive greater revenue and invest in meaningful and successful relationships with third parties.

Contract lifecycle management software is a way to align your company, take control of your contracts and leverage data in a powerful way that can’t be accessed if your contracts are all still stored in separate locations and formats.

If you’re interested in knowing how Gatekeeper can help you to manage your contracts at every stage of the lifecycle with intuitive tools and features, book a demo today.

Shannon Greaney
Shannon Greaney

Shannon is an experienced marketer, delivering content on a variety of topics and trends within contract and vendor management.


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