Frost & Sullivan research shows that 90 percent of the data in the world today has been created in the last two years—and those numbers are only going up. The process of using that information to dramatically alter the ways in which business gets done is called Digital Transformation—and it is having an impact on every aspect of corporate life. One key area for change: the ways in which companies manage contracts across the organization. Many large enterprises struggle to efficiently manage their contracts from negotiation to completion, resulting in poor visibility, decreased compliance and control, higher risk and slow completion cycles. This is true even for organizations that have implemented a contract lifecycle management (CLM) process. Many are using basic document repositories that do not meet the needs of legal specialists, sales people or their customers, nor comply with relevant government, industry or corporate requirements. There is no guarantee that the right people are getting the right documents when they need them, or that methods in place to ensure best practices are consistently followed and updated based on real-world experiences and market changes. A modern CLM application will cover the bases from negotiation to signature; enable contact creation; support ongoing needs like addendums, renewals and terminations; include printing, signing, scanning and sending; offer robust storage, search and reporting; deliver tracking, routing and compliance capabilities; and integrate with CRM tools for complete visibility and management. By making a point of connecting legal requirements with the needs of the sales team and the CFO’s office, CLM software helps reduce risk while maintaining compliance and increasing visibility across the business. By controlling the terms that can be included in any contract, for instance, and by limiting one-off changes, CLM applications ensure all contracts meet company, industry and government regulations and requirements. As a result, businesses can shorten the time spent in negotiation. Electronic signatures shrink the sales cycle, too, by automatically routing the right documents to the right people to sign when they need to. While many companies today use email to track where a contract is, a CLM tool can deliver visibility into all agreements, showing exactly where they are in the process, whose hands they’re currently in and where any bottlenecks lie. CLM tools automatically record versions, audit trails and final agreements into the system of record, so that there are no gaps in contract information. Longer-term, CLM tools let managers leverage advanced analytics to drill down on issues with past contracts, identifying key areas for improvement. The resulting documents, which are constantly being improved while adhering to all corporate governance rules, can be stored in a single repository, where they can be accessed, managed and tracked throughout the course of their lifecycle—and beyond. There are a few key functions to look for in a solution:
- Advanced features that group common terms and conditions, leverage pre-approved terms and conditions, and vet new language as you make revisions.
- The ability to negotiate terms in Microsoft Word while tracking the process in a customer relationship management (CRM) system like Salesforce.
- Professional final documents that incorporate all relevant logos and branding.
- eSignature capabilities to ensure every document is signed.
- Once a contract has been approved and signed, your system should be able to store it for future use.
- A CLM application should be able to handle third-party contracts from suppliers or partners.
- Analytics and Charts to deliver insight into the types of language and trends users are encountering in contract creation.
- An end-to-end solution that will deliver all the CLM features you need, in a single, integrated tool.
Digital Transformation is impacting almost every business process in almost every organization. Contract lifecycle management is no exception; by using software to improve the CLM process, companies can see measurable gains in productivity, shrink sales negotiations and cycle times, and ensure all documents meet government and corporate legal standards and requirements. Learn more in the Free Frost& Sullivan White Paper: Contract Management in the Age of Digital Transformation.