Contract lifecycle management (CLM) is the comprehensive management of a contract's life from inception to completion. It encompasses every step of the contract process, ensuring each is executed efficiently and effectively.
By automating and managing contract processes, businesses can optimise their operations, reduce risks, and enhance overall performance. In this article, we'll take a look at:
The stages of contract lifecycle management
The stages of CLM mean that anyone who touches contracts - from Contract Managers and Legal teams to procurement professionals - has many moving parts to manage.
- Contract Request: This initial phase involves identifying the need for a contract, specifying requirements and expectations.
- Authoring: Here, the contract is drafted, articulating the terms, conditions, and obligations of all parties.
- Negotiation: A critical phase where parties discuss, amend, and agree on the contract terms.
- Approval: This stage involves the formal review and approval of the contract by the necessary stakeholders.
- Execution: The final signing of the contract, making it legally binding.
- Ongoing Management: Active contract management to ensure all parties adhere to their obligations.
- Renewal or Termination: Deciding the future of the contract - whether to renew, renegotiate, or terminate it upon its expiry.
Three key benefits of contract lifecycle management (CLM)
At Gatekeeper, we believe that effective CLM approaches are centred around three key pillars: restoring visibility, taking back control and safeguarding compliance. We created these pillars based on common challenges mostly related to manual contract management, that our customers were looking to resolve.
Gatekeeper's pillars of vendor and contract lifecycle management
1. Restoring Visibility
In manual contract management, the struggle to maintain contract visibility is all too common. Picture an organisation where contracts are dispersed across different departments, stored in filing cabinets or scattered across various digital folders.
This makes finding specific contracts time-consuming while making it easy to miss crucial details and deadlines. Key decision-makers often find themselves in the dark, unable to access the information they need when they need it.
This lack of visibility leads to missed opportunities and a reactive rather than proactive contract management approach.
Automated CLM, in contrast, brings everything into the light. Centralising contracts in a digital repository ensures that every piece of contract data is just a few clicks away.
This immediate access transforms decision-making from a tedious, drawn-out process into a swift, informed action, empowering your business to stay ahead of its contract obligations and opportunities.
2. Taking Back Control
Manual contract management often equates to a loss of control. Without standardised processes, each contract might follow a different path, creating a chaotic and unpredictable environment.
Tracking the status of contracts, ensuring adherence to terms, and managing renewals become Herculean tasks, often leading to costly oversights.
In this landscape, automated CLM acts as a beacon of control. It ushers in standardised templates and workflows, ensuring consistency and predictability. Automation streamlines the approval process, minimises errors, and ensures timely actions.
This level of control allows organisations to manage contracts proactively, preventing last-minute scrambles and ensuring that every contract is optimised for value and compliance.
3. Safeguarding Compliance
Perhaps the most daunting challenge in manual contract management is maintaining compliance. With evolving regulations and internal policies, keeping each contract in line with these changes is overwhelming.
The risk of non-compliance isn't just theoretical; it can lead to significant legal repercussions and damage to reputation.
Automated CLM is a game-changer in ensuring compliance. It not only tracks regulatory changes but also aligns contracts with these updates. Automating compliance checks and maintaining a clear audit trail significantly reduces the risk of non-compliance.
Organisations can rest assured that their contracts are not just well-managed but are also operating in strict adherence to the latest legal and regulatory standards.
Gatekeeper, the only Vendor and Contract Lifecycle Management platform (VCLM), can help you address each of these pillars with powerful technology that will enhance your processes.
Introducing Vendor and Contract Lifecycle Management (VCLM) Software
VCLM takes the concept of contract lifecycle management a step further by integrating vendor management into the lifecycle of a contract.
This approach considers not just the contract itself but also the performance and compliance of the vendors involved, offering a more comprehensive view of business relationships and the opportunity to improve contract outcomes.
- Integrated management: A unified platform to manage both contracts and vendor relationships.
- Workflow automation: Tailored workflows to suit various vendor needs and contract types, eliminating manual workload.
- Self-service contract management: The generation of fully compliant and legally-binding contracts without manual intervention, centralising contract templates and supporting eSigned contracts
- Automated contract renewal reminders: Automated reminders for contract renewals allow users to renew, negotiate, cancel, or consolidate contracts proactively.
- Automated compliance monitoring: Real-time monitoring of vendor compliance against contract terms.
- Risk intelligence insights: Our Market IQ Suite delivers financial, cyber and ESG information about vendors.
- Collaborative features: Tools to facilitate better collaboration between internal teams and vendors.
- Vendor Portal: Manage vendor relationships, streamlining processes from registration to ongoing collaboration.
- Cloud-based accessibility: Easy access to contract and vendor information from anywhere, at any time.
The importance of automated contract lifecycle management (CLM) cannot be overstated.
CLM is the foundation of effective commercial relationships, ensuring that contracts are not only created and executed efficiently but also managed throughout their lifecycle within the pillars of visibility, control and compliance.
Effective CLM leads to significant benefits such as enhanced compliance, risk mitigation, cost savings, and improved operational efficiency.
When businesses expand their focus to include Vendor and Contract Lifecycle Management (VCLM), they open the door to even greater strategic advantages.
This integrated approach, offered by Gatekeeper, empowers your business to optimise both its contracts and vendor relationships, leading to a synergistic improvement in overall business performance. If you're ready to speak to our experts and see Gatekeeper in action, book a call.