Contract Lifecycle Management, or CLM, in short, is a software that converts and organizes contract processes in various stages of a business.
Contract management in itself can be divided into different stages like activation, analysis, efficiency in workflow, approval, and evaluation. Using this software, buyers and sellers can reduce the time spent on business activities and avoid making unnecessary errors. So preparing to implement CLM can help ensure that business procedures are efficient and successful rather than making it difficult.
So how do you gain success on this? Here are 8 factors you need to ensure before implementing it-
1. Understand Your Own Business
Knowing your business and how it operates, its stakeholders, its nature is the foundation of all decision making.
Knowing how your contracting business will work and planning out all the requirements before implementing can ensure great success since the main goal is to use a contract lifecycle management software to maintain contracts and enhance efficiency.
2. Determine Project Administrators
Administrators are helpful when collecting deliverables, keeping track of members, and helping in decision-making. But it is also true that too much of anything is not good.
So, for choosing administrators, ensure that the number remains between 1-3.
3. Keep Track of Data Accessibility
When you are looking for the right contract management system, make sure you keep track of all the relevant data.
Create a database and store information there. Be sure to avoid a separate database if your new solution idea matches the old one.
A great way to develop the database first identifying the different types of contacts the organization has and then create a list of it using a spreadsheet. And, keep track of the important information for each type of contract you need.
4. Figure Out Where Your Business Lacks
The whole purpose of CLM is to reduce the problems of your business. If you identify these problems beforehand and create a list of how you can reduce these limitations it will be of great benefit. These prior findings can act as a barrier so that you do not get additional problems while adding the new software to your system.
5. Observe Actions & Procedures
When selecting CLM, be sure to find a system that can run in accordance with your organization.
So, while selecting the new solution, observe the current action and its procedures and also, keep an eye out for new programs that could be added later to further develop your organization.
6. Assign Software Users
When a new system is introduced, everyone may not have the full potential to operate it.
It is the same with CLM software. Not everyone will know how to track data or create contracts. So, the best solution is to assign users or groups of people in various roles based on your organization’s needs.
To better operate the software you will also have to plan for training seminars and instructors. You have to take these factors into consideration before implementing the software.
7. Inspect Regularly
Inspecting the software regularly with reports and system reviews can help understand what sort of data you are looking for.
Regular audits can give you better information, or you will be able to figure out the exact information without wasting too much time and effort.
8. Remove Old and Unwanted Data
As time goes on, there will be some data that you will not require any more or data with which you have already worked and completed.
Sort out these data and delete them from the system to eliminate the possibility of mixing them up with data that you are at present working.
But if you feel that some data might be needed in the future can be updated, and store them in the archive for future use.
What Features Your CLM Should Have
Now that you have understood the basics of how to successfully apply the CLM software for your organization and reap the benefits. You need to find the right software.
But choosing the right tool among many alternatives can be a hefty task. When you choose a CLM software, make sure the software has the following 5 features-
1. Data Storehouse
The purpose of CLM software is mainly to reduce the waste of time. So, when you store multiple contacts on your database, and these are stored on multiple bases, it gets tough to figure out the right base where it is stored.
So choose the software with a centralized database that can store contracts under separate business areas.
2. Alerting Deadlines
Keeping up with the deadlines of contracts needing renewal or inspection is crucial for contract managing.
The CLM software you select for your business must have the feature where it notifies you of the contract timelines and deadlines.
3. Digitized Contract Signing
The age-old tradition of signing contracts by hand on paper is time-consuming, and sometimes it requires traveling to faraway places for this. So select a software that has electronic contract signing features.
4. Automated Contract Standardizing
Without any software, a contract manager needs to check guidelines and policies every time he signs a new contract.
So, having a CLM software that standardizes the contract and automates the process, will save a lot of time.
5. Management Of Third Parties
When an organization receives a contract from a third party, they make sure that the guidelines for that organization match with their own. This is a tedious process of manually checking all the standard guidelines, and needs a lot of time.
If the CLM software has the feature of extracting the necessary information from the third party and check these standards to verify if they match their own through an AI-controlled tool, it can save time, improve efficiency and strengthen accountability.
Final Thoughts
If you know what you are doing, implementing new software in your organization could be very beneficial. It saves time, reduces risk, and eliminates errors, besides it can ease up a lot of pressure and tension from your team. The opposite can be seen too. If you blindly follow someone else and implement CLM software without knowing the basics. So, before you start implementing, select the perfect CLM software that suits your needs, and start using it.
Cover Photo by Khwanchai Phanthong from Pexels
