Contract Lifecycle Management
For efficient design of your contractual relationships
Contract Lifecycle Management (CLM) relates to the entire process of managing contracts, from their creation to their cancelation or expiry. This process encompasses various phases, including conclusion, management, monitoring, and renewal or extension. CLM is crucial to businesses as a means of efficiently managing their contractual relationships and of minimizing risks.
Benefits of Contract Lifecycle Management
Contract Lifecycle Management (CLM) has a number of benefits for businesses.
These are the most important:
In which areas can CLM be beneficial?
Contract Lifecycle Management (CLM) can be used in a variety of areas in different business units:
- It is essential that CEOs and managers have a 360-degree view of all customer relationships and track performance, risks, finances, and new purchasing and sales opportunities.
- The procurement can benefit from CLM by effectively managing supplier relationships and using contracts as performance benchmarks for procurement strategies.
- In the finance department, CLM improves understanding of the impact of the contract portfolio on costs and revenue, thus helping to optimize financial results.
- For the legal department, due diligence and risk management in the contract portfolio are extremely important, as CLM helps with identification and minimization of deviations and gaps in contract clauses.
- In sales, CLM helps with the management of customer relationships and promotes conversations as a means of improving sales by tracking and demonstrating fulfilment of contractual objectives.
These diverse fields illustrate the importance of CLM as a comprehensive solution to optimize contract management in different business areas and to increase efficiency.
Key Drivers for CLM
Contract Lifecycle Management
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Software solutions for Contract Lifecycle Management
Both SAP Ariba Contracts and Icertis are solutions that are familiar to Contract Lifecycle Management (CLM). Both offer businesses advanced functionalities for contract management. The following are some of the benefits that these solutions have to offer:
Benefits of SAP Ariba Contracts
Benefits of Icertis
Why work with Contract Lifecycle Management from Icertis
As a global leader in CLM, Icertis is a preferred partner for CLM software solutions. Icertis offers a powerful CLM solution that supports businesses with the efficient management of the entire contract lifecycle. For information on the strategic partnership between SAP and Icertis since 2021, see the SAP & Icertis website The strategic partnership between Icertis and SAP offers innovative contract intelligence to accelerate the digital transformation throughout the business. By converting contract information into structured data that can be connected to SAP® solutions, Icertis enables cost reduction, improved revenue, minimized risks, and increased efficiency, while continuing to manage your processes with SAP solutions. The Icertis platform offers advanced functions, such as contract automation, contract analyses, workflow management, risk evaluation, compliance monitoring, and integrations with other enterprise systems.
Why should your business use CLM?
Introduction of a CLM tool raises several questions for businesses:
- Does your CLM work for everyone in your business, not just the legal team that usually manages contracts?
- Is there a sufficient level of transparency between your legal, purchasing, sales, and finance teams, and are they always on the same page
- Do you know how a CLM solution can complement human intelligence to ensure that contracts are a strategic benefit for the organization as whole?
- How can decision makers take control of their contractual relationships?
- Are your contracts sufficiently intelligent?
What are the four phases of the Contract Lifecycle?
There may be changes or amendments during the contract lifecycle that require additional steps. An effective contract management solution such as Contract Lifecycle Management helps businesses to manage these phases efficiently and to optimize the entire contract lifecycle.
What are proven methods for Contract Lifecycle Management?
There are multiple contract lifecycle management methods that can help businesses to design their contract processes to be more efficient and effective. Here are some proven methods:
- Standardized templates: The use of standardized templates for contracts can help to improve the consistency of and compliance with contract terms. Templates can also help to save time and to reduce errors by containing preprepared clauses and terms that are in line with company policies and legal requirements.
- Central contract database: A central contract database allows companies to store and access all of their contracts in one place. This simplifies management, monitoring, and searching of contracts and allows relevant stakeholders to access the information that they need.
- Automation of contract processes: Automation of contract processes can help to improve efficiency and reduce human error. This could include automation of contract development and approval, creation of contract documents from templates, notification of pending contract terminations or extension, and automation contract changes or additions.
- Contract review and approval: A thorough review and approval of contracts can help to minimize risks and to ensure that contracts comply with internal business and external requirements. This could include a review of contract terms, evaluation of the risks, and approval of contracts by relevant stakeholders.
- Contract monitoring and tracking: Ongoing monitoring and tracking of contracts can ensure that contracted services are provided and that no contract extensions or terminations are overlooked. This includes tracking deliveries, payments, contract changes or additions, as well as communication with contractual partners.
- Legal and compliance checks: A detailed legal compliance review of contracts can help to minimize risks and to ensure that contracts comply with applicable laws and regulations. This could include a review of contract clauses, legal terms, data protection regulations, and other compliance requirements.
- Reporting and analysis: Comprehensive reporting and analysis of contract data can help businesses to gain understanding from contracts, to identify trends, to recognize options for improvement, and to optimize contract performance. This could include the creation of reports, dashboards, and analyses.