How Not to Fail with Choice – Contract Lifecycle Management Software
Contract lifecycle management (CLM) software allows businesses and teams the privilege of automating the entire process of creating, drafting, signing, and managing legal contracts.
When it comes to contract lifecycle management solutions, there are key features and differences in software that you need to look out for, which is what we will explore in this article.
Contract Lifecycle Management Software: Features You Need
Although the general concept behind all contract lifecycle management tools is the same (automate and streamline the stages of contract creation) there are differences between the various CLM software programs available today.
Organizations are under pressure to do more with less. One area that is often overlooked is the contract lifecycle management (CLM) process. An ineffective CLM can lead to missed opportunities, inefficiencies, and errors that can be costly to the organization.
There are a number of software solutions on the market that can help organizations streamline their CLM process. Here are some features to look for when selecting a CLM software:
- Ease of use: The software should be easy to use and intuitive. It should require minimal training to get started.
- Flexibility: The software should be flexible enough to accommodate the specific needs of your organization. It should be configurable to meet changing business requirements.
- Scalability: The software should be able to scale as your organization grows.
Before you invest in any CLM software, make sure they have most (if not all) of the following features or specifications:
Central Database
Having a database that stores all your business’s contracts is essential when it comes to contract lifecycle management software features; this allows all team members quick access to all contracts and data via the software interface.
This is a step up from shared document folders – your team will benefit greatly from the ability to view important documents 24/7.
Searching Capabilities
This is a feature that not all contract lifecycle management solutions truly offer; while most have basic search functions, the more advanced CLM software solutions have better search options, such as automatic OCR scanning.
The ability to quickly pull up documents and information is a benefit for businesses that cannot be understated.
Let’s talk contracts and how many you have to juggle.
IT contracts — let’s say servers, cloud services, licenses, PCs, telephones, etc. Products, solutions, and deliverable services contracts. On top of those, you also have rental contracts, legal services contracts, office services contracts, employee-related contracts, third-party solutions contracts, office sundries contracts – those knick-knacks like coffee machines, water dispensers, snacks, etc,
The average company has hundreds and hundreds of active and inactive contracts in its system. Each with different parameters, each with different contracts lifecycles, each demanding key contract authoring tools, and contract repository tools.
One of the biggest features of contract management software for business is its search capability. Why? Because staying on top of all those contracts, that miasma of paperwork, and pinpointing critical text in each and everyone is a daunting task. With search capabilities, individuals can hunt down contracts based solely on a keyword, or phrase embedded in them.
It’s the equivalent of your mail’s search capabilities — How many times have you simply relied on that feature to snoop out a message?
Not only that, but thanks to today’s tech, CLM software can now convert images to text. Optical Character Recognition – OCR – gives CLM software users another tool in their arsenal — the ability to search their contract management database and not be limited to simply stored text, but images. For example, individuals can scan a form or a bill, or a receipt into their computer and then search for that image based on the text it has.
Reporting/Analytics
All contract lifecycle management tools should provide teams the ability of analyzing their data in a way that makes it easy to understand by use of graphs and visuals; the sorting and filtering functions should be advanced enough so that users can create their own reports based on the data they want to analyze.
This feature should also allow exporting of the results so that the information can be shared.
Advanced Security
Security is another essential feature for contract lifecycle management software.
Preferably, a CLM software will offer role-based security; this means that the system will allow you to customize the access that various team members have for different contracts. This is legally crucial, and the better contract lifecycle management security tools offered, the safer it is.
Contract Retrieval
Contract lifecycle management solutions should provide users the ability to retrieve all past versions of legal contracts; this means that if an edit or amendment is wrongly made, then you are able to ‘go back in time’ and view all past versions of the contract.
This feature truly streamlines the contract process and allows businesses the benefit of not having to worry about small mistakes.
Automated Alerts
Alert features are important when it comes to contract lifecycle management software; these prevent missed deadlines or key dates.
Preferably, your CLM software will allow you to customize when alerts are sent, how they are sent, and in what format they are sent.
Template Libraries
Contract templates mean that non-legal staff can create contracts for you and your team which speeds up the process tenfold; this feature provides the benefit of saved time so that more important tasks can be paid attention to.
Review & Approvals
Your CLM software should include collaboration features, not only for you and your team but with other parties involved as well.
A contract is only as good as the people who write it and enforce it — otherwise, it’s just a piece of paper. It needs a good framework to properly function. In order to give both parties guidelines, prohibitions, and consequences.
Reviews and renewals are important contract’s lifecycle management features because they help to maintain the quality of the contract. They make sure the agreement works for all parties involved. They seal up loopholes. They clear up inconsistencies. They create a dynamic, personalized contract that will supervise the business relationships — By keeping the contract up-to-date with changes in the landscape.
The renewal cycle starts with a review, which is an opportunity to assess and update the contract document to reflect current business terms and conditions. After a review, stakeholders will seek consensus to decide whether changes need to be made. If changes are agreed upon, they will be reflected in the updated contract document and sent out for renewal.
This is one of the most important steps in a contract’s lifecycle, mainly because most companies have a nasty little habit of using templates. This means they have ONE contract for all their business needs, and a vast majority of them didn’t even have that parchment drawn up by their legal department — they downloaded it off the internet. This means that the template is not only out-of-date but quite possibly doesn’t even make a lick of sense. Doesn’t take into account your needs, and in the event of an issue arising, it won’t protect you.
Electronic Signature
The ability to sign via the internet saves an immense amount of time and prevents human-caused errors, as well as allows you to visually monitor progress with your contracts at all times.
Custom Request Forms
The best contract lifecycle management software programs will allow you to design your own request forms – this means that other users can submit requests which can then be turned into a contract with only a few clicks.
Workflows
Workflows are a key feature for any contract lifecycle management software; these allow teams the benefit of tracking contracts through all phases.
Preferably, your CLM software will include visual workflow options.
Contract Lifecycle Management Solutions: Risks
Naturally, there are some risks associated with using contract lifecycle management software.
These risks include:
- Security (this is why advanced security is so important for any CLM software – data can be accessed in ways that manual contracts cannot be).
- Technical illiteracy (we are still in the early phases of the digital age – not all team members will be computer-literate and might have difficulty with software).
- Coordination confusion (when first introducing CLM software into your business, since the legal contract process will be different there will be some natural confusion with the change).
- Software integration (it’s possible that your new CLM software may not work well with some of your businesses other software – this is a common risk with all digital solutions).
How To Choose The Best Contract Lifecycle Management Software For You
Choosing the best contract lifecycle management software for your business can be a daunting task. There are so many different options available on the market, with each one promising to be the best. However, there are a few key factors you must take into consideration when choosing which software to back and where to invest your hard-earned cash.
Each company is different, each one is as complex as it needs to be. There’s an ocean of difference between an ice cream shop, a boutique hotel in Ibiza, and a tech start-up in California. Objectives differ, suppliers differ, and scaling goals differ. Not only that, but the quality of suppliers also differs. The truth is some of your third-party solutions will be less than desirable — but they will also be, given your region your only solution.
So it’s important to first understand your strengths and weaknesses and ask yourselves key questions regarding what you will need as far as contract management software for business solutions.
Questions like:
- Which features do I need?
- Do you have recurring billing?
- Do I need legal compliance?
- What is my budget?
- Do I want to integrate with other systems in my company like Salesforce or QuickBooks?
- What are my data security and privacy policy?
- Does my company have GDPR compliance or ISO 27001 certification?
- Does the software offer customer support in multiple languages and time zones or just one language and time zone?
These are just some of the features you might need — but each company is unique. If you’re still on the fence and need a bit of a push, or are simply overwhelmed by the task of picking a CLM, check out our blog or contact us —- we’re here to help.
Choosing the best contract lifecycle management software for you should be based on:
- your budget (do a contract lifecycle management software price comparison before you buy), and
- the features you want or need (have a look through the features we mentioned and decide which ones are most important to you and your business).
The software that is best for you and your team depends entirely on your unique business needs and operations; make sure to research contract lifecycle management software reviews before you purchase!
