Contract lifecycle management (CLM) software automates and systematizes several processes and tasks involved in modern contract management. During contract lifecycle management business owners and contract managers become very familiar with contract negotiations, reviews, and approvals. These processes within contract lifecycle management can often be time-consuming, taxing, and very detailed – lending themselves to require the highest level of attention. Even for the most experienced contract managers, contract negotiations and conducting contract reviews are crucial steps within the contract lifecycle that often need additional insight from relevant contract stakeholders. For contracts with the potential for significant impacts on an organization (positive or negative), the intentionality and effort required on such agreements dramatically increases.
It’s also important to note that legal teams are greatly assisted by the capabilities offered by contract lifecycle management (CLM) software. Effective collaboration, communication, and coordination is made possible with a centralized platform that stores all of your contract data and associated documents in one place that is accessible on any device. In a CLM software platform during the early stages of the negotiations phase, your contracts will pass through multiple parties for editing and reviewing to confirm that the language and terms within the contract are accurate, that clauses are compliant, and that obligations assigned are agreeable on all sides.
During contract negotiations, parties and contract stakeholders will communicate and collaborate on contracts to ensure they are properly written and that terminology is correct. With an effective negotiation stage, you can rely on various technological features offered by CLM software to optimize and centralize your communications across departments or from person-to-person as the agreement undergoes several updates and iterations.
Contract management can lend itself to many interesting challenges that require some expertise to navigate through. Luckily, CLM software can alleviate some of the pains that come along with managing you contracts by way of automated workflows. Furthermore, CLM software gives you direct oversight of all of your company’s contract data with performance and obligation monitoring, as well as on-demand contract insights and statuses from your proactive dashboard. A cloud-based, centralized contract repository serves as the location where all redlining, editing, and versioning takes place to keep all contributors working on the most current version of a contract, allowing for simplified updates that lead to an accurate, finalized agreement.
Keeping track of all of your company’s contracts is easy with CLM software, where cloud security allows you to protect sensitive data and where a filtered, customizable searching feature allows you to locate exact contracts and clauses within moments. To further expand upon the concept of contract negotiations, this stage is primarily for the purpose of assigning responsibilities, properly managing risk, and setting clear guidelines for contractual parties to adhere to upon contract execution. Your finalized contract agreement will be the result of several reviews and combined feedback discussed during the negotiation process of contract lifecycle management.
Now, let’s discuss five key ways that CLM software assists companies in contract negotiations during redlining, version tracking, and ensuring that contributors are only working on the most recent version of given documents.
Gone are the days of sifting through hundreds of thousands of emails just to locate a single contract. Accessing the most current version of a contract should be extremely easy, and CLM software makes this possible. When searching for your contracts takes more time than it should, you ultimately halt your contracting processes and increase the likelihood of miscommunications and inaccuracies in the final version.
In your centralized repository, you can access every single contract with version controls for effective contract management. In addition, customizable filters allow you to sort your contracts by date, assigned contract manager, vendor, contract type, status, and more so that you can easily locate, retrieve, edit, approve, and review contracts. Another robust capability of CLM software is the ability to communicate and collaborate on documents within your repository, rather than have to send numerous emails. This helps to mitigate risk and increase the accuracy of your contracts, as well as your communication.
Overseeing contract histories is simple with CLM software. Timestamped activities and archives of each version of every document are securely stored within your contract repository. In a traditional (and outdated) contract management system, people will often use shared drives, spreadsheets, physical paper storage, and emails to store numerous contract versions. Some companies might opt to delete versions of their contracts, which only increases legal risk and noncompliance.
With a cloud-based CLM software solution, you can leverage intelligent version tracking and collaboration features that will optimize and centralize your contract management processes. In this way, you will fully retain all versions and histories of your contracts, which allows you to review every change made to a given document during your contract negotiation stage and other stages within a contract’s lifecycle. All of these items increase risk mitigation, compliance, and transparency.
Because contracts in the most basic sense are legal agreements containing highly-specific terms, requirements, and obligations, creating them can take a bit of time, fine-tuning, and a lot of attention to detail. To attain appropriate legalese and terminology within such documents, you’ll regularly have to send off your contracts to multiple legal experts and professionals for several drafting stages and editing processes. Overseeing these collaborative efforts via email can be risky and disjointed, allowing for potential unnecessary delays and errors.
With CLM software, you can increase the accuracy of your final contract versions and improve the communication along the way. In addition, CLM software is readily equipped with advanced versioning and redlining tools so you can collaborate with internal and external parties seamlessly during your contract negotiations and reviews. Version tracking and monitoring automatically tracks every iteration of each contract with timestamping, recording of exactly who worked on each document at which time. Your system will collect and record contract data that will help keep your entire contract management team on the same page in terms of updates, responsibilities, and various tasks.
Contract template and clause management are excellent ways to increase compliance and minimize risk potential within your contract lifecycle management processes. Instead of manually overseeing your organization’s contract templates and clauses, a digital alternative will help you save time when preparing the first draft of your contracts – resulting in more accurate contracts being created at faster rates.
When developing your contracts with a CLM software solution, you can leverage libraries of preapproved contract templates and clauses that will help you rapidly build accurate contracts. Select and store preapproved legal language for specified contract templates and clauses for easy application when developing beginning contract drafts. In addition, your CLM software has the capability to set predetermined clause conditions and rules according to contract templates. You can also use auto population when creating your contracts that will use specific client or vendor information from your contact request intake forms.
As you may have experienced, contract lifecycle management requires the involvement and communication of multiple contract stakeholders to successfully create a contract. With CLM software, you can employ advanced collaboration tools and audit trails to oversee the performance of your processes – allowing you to become aware of areas of strength and improvement.
With your audit trails, you can monitor a comprehensive history of document versions, read comments, and oversee contract approvals to ease compliance tasks with internal standards, external policies, and relevant security laws – all of which allow you to generate revenue at a faster rate. With the modern collaboration tools provided by your CLM software solution, you can easily communicate and work on documents with others. Clear communication is crucial to effective contract lifecycle management, and especially so during the negotiation stage. With Microsoft Teams, you can leverage several tools that will help you improve the accuracy of your contracting processes. Creating online meeting rooms for contract reviews, approvals, and redlining is an incredible capability offered by CLM software with Microsoft 365 integrations.
CLM software offers numerous features for an incredibly seamless and productive approach to managing your company’s contracts. Overseeing contract lifecycles, and particularly contract negotiations, can be a tricky process. However, CLM software will streamline this stage along with the other stages of a contract’s lifecycle.
We highly recommend investing in a user-friendly contract lifecycle management software with easy implementation. Here at Dock 365, we offer an intelligent and affordable approach to managing your contracts by using your existing Microsoft 365 and SharePoint subscriptions as the base for your contract management system. If you're looking for a next-level contract lifecycle management system, reach out to us, and we would be delighted to offer you a complimentary demo of our system.
Learn more about our Dock 365 Contract Management System here.
Learn more about Contract Lifecyle Management (CLM) Software here.
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