What is Contract Lifecycle Management?
For years, companies have struggled to manage the backbone of every business—the contract. Each contract contains vital information about the terms, payments and responsibilities that govern virtually every business process.
Contract Lifecycle Management (CLM) is the process by which an organization strengthens and taps into the value of its contract portfolio. CLM goes beyond simply creating and managing contracts – it completely transforms how organizations manage risk, enabling them to shorten sales cycles and reduce costs.
1. Organize your contract portfolio so that all contracts are centrally stored and easily reviewed. This allows you to identify any major gaps – key contracts that may have expired – and major risks – unmanaged exposure that could be very expensive to clean up in a crisis scenario.
2. Operationalize the day to day performance of your contracts by making sure that you comply with your contractual obligations, and that your customers, vendors and partners do the same. Through close tracking of performance and payment obligations, you’ll eliminate revenue leaks, keep spending tight and avoid the scandal of compliance failures and contractual disputes.
3. Analyze your contract portfolio and process to discover hidden weaknesses that are undermining the performance of your business, or that will cost you dearly during a crisis. The only cost-effective way to deal with contractual, counterparty, regulatory and other risks is to do so well before a project blows up, the market crashes or a merger is underway.
4. Optimize your process for drafting, approving, negotiating and signing contractual documents so that you are continuously improving the speed and efficiency with which you close new deals, and the strength and quality of your contract portfolio. Self-service contract drafting, streamlined approvals and better-informed negotiation can have a quick and dramatic impact on your P&L. Smoother manual processes will lead to happier customers, vendors and employees.