Effective Use of
Contract Lifecycle Management Software
Contracts are more complex than they ever have been before - not only that, but the amount of contracts businesses must deal with on a day-to-day business in order to operate is increasing as well.
Contract lifecycle management (CLM) software is being used successfully by many organizations to better handle the large volume of contracts that need to be managed.
That said, CLM software must be used effectively… otherwise, it defeats the purpose of the software in the first place.
Contract Lifecycle Management (CLM) Software: Main Benefits
Contract lifecycle management software is only becoming more and more popular as more businesses make the switch to using CLM software solutionsto help manage contracts.
What Is Contract Lifecycle Management Software?
CLM software streamlines the contract lifecycle process (from contract creation to signing to renewal) by automating many of the key stages that traditionally take much time and effort. Read here to find out more about why you need it to accelerate your business.
Before we take a look at the tools to use for maximum effectiveness with CLM software, let’s go over some of the main benefits of using CLM software solutions.
Using CLM software, creating contracts is easier - and faster - than ever possible with the traditional contract lifecycle process.
Contracts can be created based on templates from past contracts complete with clauses that ensure the legal document satisfies the goal of why it was made in the first place.
The software will prevent any ‘legally invalid’ contract from being made, which means less human-caused errors and more time to focus on other (more difficult) aspects of the contract lifecycle.
Another main benefit of contract lifecycle management softwareis shortened approval times.
When contracts are completed, they are digitally sent to other team members who must sign off and approve any specific contract - this means no need for physical meetings, since the approval is done online.
The department heads or personnel that must sign off on contracts are notified by the software of their responsibility, no manual action required.
Once a contract is approved, all relevant parties are notified that they can continue on to the next stage in the contract lifecycle process.
Manual contracts are inherently difficult to manage - when files are stored in various computer folders or filing cabinets, keeping track of particular contracts and monitoring where they are in the lifecycle is a task in and of itself.
With CLM software, a centralized storage means all team members can access any contracts that they have permission to access on their own time, from their own computer.
This makes it easier for everyone involved and leads to a better overall experience when managing contracts.
Using contract lifecycle management software, all edits and past versions of contracts are saved and can be retrieved at any time.
This means that any mistakes (which are rare when using this software) are easily fixed since users can simply ‘undo’ the errors.
For legal reasons, it is also a benefit to have the ability to recall past versions of contracts if necessary.
Notifications play a key role in why CLM software is so valuable to businesses.
The best example is with contract renewals; when a contract is nearing expiry, a notification is automatically sent to relevant parties. How far in advance and to who the software notifies can be customized by users.
Parties involved in any specific contract can also receive notifications alerting them when the stage a contract is in has changed, or when an action is required of them.
Maintaining compliance is important for businesses and has traditionally been difficult… this is especially true the more contracts any particular business deals with.
Using contract lifecycle management software, accountability is made easy - users can track their obligations for many various contracts with ease, preventing legal fees or compliance-related issues.
3 Tools for Effective Use of Contract Management Software
There are three main tools that should be utilized to bring the most benefits for businesses who use CLM software.
The contract lifecycle management software featuresyour business should be using are as follows:
Automated Contract Workflow
The problem with the traditional contract lifecycle process is this; when one person delays, the entire contract gets delayed.
CLM software provides the solution to this thanks to automated contract workflow - this provides notifications, reminders, alerts… everything to ensure every team member is doing what they are supposed to do.
The collaboration, negotiation, and approval stage can be automated as well thanks to these alerts.
Also, renewals are made simple and stress-free as long as you set up yourCLM software to send out a notification when a contract is near expiry.
The entire contract process workflow - from creation to renewal - can be automated using contract lifecycle management software, although the software must be configured by your team in order to use these programs to their utmost potential.
Electronic signatures are the solution to the timely and troublesome task of manual contract signing.
Most CLM softwarewill offer eSignatures, and these should always be used in order to drastically reduce the amount of time it takes to complete a contract.
Using eSignatures, various personnel can all sign a contract from their own computer - no need for in-person meetings or travel.
Electronic signing prevents delays and bottlenecks.
Secure Repository System
One of the best tools offered with CLM software is the ability to store contracts digitally.
Using the secure repository system, contracts eliminate the need for filing cabinets or computer folders. Contracts are saved automatically, and security is handled by the CLM software vendors.
Then, contracts can only be accessed by team members who have the correct permissions to do so.
This abolishes many of the storage and security issues that naturally come with traditional contract management.
Advantages of Using CLM Software Effectively
Using contract lifecycle management softwaretools effectively is the key to reducing time and money spent on contract management.
When CLM software tools are used to their fullest potential, the more money and time your business will have to focus on sales and growth.
Before investing in software, perform sufficient research on contract lifecycle management software vendors to ensure they offer the tools discussed in this article.
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