What is Contract Lifecycle Management (CLM)?
Gartner deﬁnes contract life cycle management (CLM) software as “an application that proactively manages contracts from the initiation stage through the award, compliance, and renewal stages”.
Forrester notes that contract lifecycle management software is “the primary mechanism for many companies to create, execute, and manage their contractual relationships with counterparties”. No wonder then, that Forrester states that CLM has today become a strategic software product for executives.
Simply put, CLM software automates and streamlines each step during a contract’s lifecycle— through contract request, drafting, negotiation/approval process routing, execution, storage, compliance, and contract renewal/closure.
What limitations and challenges of the traditional contract management process make CLM platforms so essential for businesses of all sizes? We’ve rounded up the four main reasons below:
- Inefficiencies due to the dependence on cost and time intensive manual processes.
- Limited visibility to contracts and inefficient collaboration that slows down decision making.
- Inability to accurately mine critical contract data and effectively measure business outcomes.
- Traditional ways of managing contracts lead to increased risk due to lack of standardization and the inability to ensure compliance to the approved process.
CLM platforms can help address these challenges. By integrating the fundamentals of the contract management process in an easy-to-use platform, CLM software delivers time and cost savings, better risk management, and improved business value.
Key capabilities of best-in-class CLM software
While sound CLM practices are critical for the success of any business, not all CLM tools are created equal. Best-in-class CLM platforms will include a comprehensive set of specialized capabilities, with AI being at the core of their functionality. Some major tenets and key capabilities that you should look for are:
- Anytime-anywhere access to contracts with a central repository.
- Improved visibility and insights into contracted terms.
- Complete audit trails with easy access to detailed records of changes, variations, and more.
- Ability to digitize contracts using AI to capture metadata, clauses, obligations, service levels, and more.
- AI-powered analytics to identify missing clauses, deviations, and remediation requirements across legacy contracts.
- Rich insights based on past performance data to drive future negotiation and draft stronger contracts.
- Streamlined contract creation with self-service and guided contract assembly.
- Single-click drafting of simple agreements with contract templates and complex contract packages (containing a hierarchy of documents such as MSA, SOW, etc.) with smart tags to auto-populate metadata fields across multiple documents in a package.
- Risk mitigation through enterprise-approved clauses and template libraries.
- Automate the legal review process by using artificial intelligence to identify missing clauses and clause deviations from preferred positions.
- Advanced workflows and collaboration capabilities, including Microsoft Word and Outlook integrations, for collaborative redlining and negotiations.
- Highly configurable contract workflows with conditional fields and triggers.
- Integration with leading electronic signature (e-signature) tools such as DocuSign for smoother contract execution and contract approval.
- Ensure contract fulfillment tracking by monitoring contractual obligations against performance metrics in real-time (this will also help to identify and measure any non-compliance).
- Use prescriptive analytics to preempt issues and take corrective actions.
- Configure alerts and reminders for upcoming or overdue tasks and milestones.
- Enhanced and on-time visibility through out-of-the-box, standard role-based dashboards based on industry benchmarks.
- Configurable automated alerts and notifications for important upcoming events and milestones.
Benefits of Using Contract Lifecycle Management Software
There are more benefits to using CLM platforms besides throwing out the old file cabinet. The contract lifecycle management process is often a manual, inefficient, and difficult one. But with an integrated CLM platform, it doesn’t have to be.
Let’s review the main benefits to see why enterprises are increasingly relying on modern CLM software solutions:
- Simpler, faster CLM process: The process of creating and managing contracts is made far easier with CLM platforms. Equipped with configurable workflows, they allow you to quickly draft new contracts, negotiate effectively and automate approval routing. Once a contract has been executed, CLM software will keep you updated on important dates and obligations related to the contract.
- Transparency and visibility into contract portfolio: Get convenient and timely access to the most current document versions in a centralized contract repository. Intelligent extraction powered by AI enables you to mine contracts for important insights by converting contract documents into searchable digital objects.
- Risk mitigation and contract compliance: CLM platforms enable organizations to drive compliance to the approved, standardized contracting process with built-in risk controls, reducing risk from maverick contracting.
- Improved collaboration: By using CLM platforms, you break functional silos and overcome time-wasting bottlenecks. Contract managers and employees from different enterprise functions—such as procurement, sourcing, sales, commercial, finance, IT, supply chain, and legal teams—see a notable uptick in productivity and benefit from improved collaboration across various stages of the contracting process. Further, you can collaborate better with external stakeholders like clients, vendors, and partners.
- Increased business value: All business relationships are governed by contracts. CLM programs enable you to stay on top of your contracts by ensuring that all contractual obligations are met on time. You get exactly what was expected and agreed in the contracts, enabling you to extract maximum value from commercial relationships.
- Integrations: CLM software easily integrates with adjacent enterprise systems such as procure-to-pay, CRM, and ERP. This enables you to leverage cross-platform and cross-technology synergies to create a single source of truth and also maximize value from your existing tech installations.
Sirion is the Leading, All-in-One Contract Lifecycle Management Solution
Sirion is the leader in enterprise CLM recognized for its innovations and stands out for its in-house developed and patent-pending AI technology. Its award-winning smarter contracting platform, Sirion, automates the end-to-end contract lifecycle on a single platform, connecting all enterprise teams and unlocking intelligence hidden in contracts.
Sirion CLM stands apart from competitors in several ways:
- We offer an end-to-end CLM solution with integrated functionality for the entire contract lifecycle including authoring, analytics, and ongoing governance and performance management. No other CLM platform offers this breadth and depth of capability.
- Sirion’s smart AI-powered analytics technology works on neural-network based AI (vs traditional rule-based AI), which is self-learning in nature and grows smarter and faster with each contract processed.
- The platform delivers real and tangible business impact and ROI by driving business acceleration, improving risk control, and enhancing revenue and savings in commercial engagements.
- It’s an easy-to-use, intuitive platform that ensures a great user experience and high adoption levels.
- It’s an enterprise-grade, secure and scalable platform that is easily integrable with other enterprise technologies.
Sirion offers cutting-edge solutions for smarter contracting. The world’s largest organizations trust Sirion's AI-powered contract lifecycle management technology to manage 5 million+ contracts worth over $450 billion across 70+ countries.
Contact us to schedule a demo, or to simply learn why leading enterprises select Sirion's CLM platform.