Category: Contract Lifecycle Management

There has been exciting evolution on the contract lifecycle management (CLM) front —proving the tech solution of tomorrow is here now, in new and game-changing ways to unlock innovation, keep cross-departmental functions connected, and redefine what is possible for legal operations and your entire business.

Collaboration has sometimes been called a serendipitous collision.

Take what transpired from the young women assembled at Bletchley Park to crack top-secret WWII codes. John Lennon and Paul McCartney parlaying their outdoor church concert into musical legend. “The Steves,” Jobs and Wozniak, introduced at their part-time summer gigs, as they both happened to like electronics.

Yet attributing collaboration even in part to chance doesn’t give the concept enough credit. Working in tandem to advance any goal requires developing trust, sharing responsibility, and honoring the strengths of others. Only then can there be a real fusion of talent and cooperation.

Today, technology is what keeps Legal connected with both internal clients and outside vendors — and yet, half of legal professionals (47%) believe their tech is outdated, according to the 2022 Enterprise Legal Reputation (ELR) Report. A similar number (46%) do not even have automated systems for managing contracts, necessitating manual labor to painstakingly review contracts.

File cabinets of hanging folders, individual drives, and legacy platforms may have helped create a foundation for CLM, but next-generation solutions with end-to-end automation have the capability to transform contracts into actionable intelligence and navigate how modern teams operate.

Here are three ways next-generation CLM can reduce complexity and catapult collaboration within your enterprise:

1. Create more visible workflows

One of the major roadblocks to efficient contract management is contracts spread across multiple systems. Often this means that every employee will go to Legal for every question about every arrangement. CLM can solve this visibility issue by keeping contracts in a single, easily accessible location with assigned user groups and security permissions spanning your business.

CLM can also help avoid delays by outlining each step in the contract lifecycle and creating well-defined workflows. Mapping out precisely how a contract travels through the proper channels ensures it “stops” at the right person at the right time so any issues can be identified and resolved. It also provides transparency for everyone involved in the contract management process, allowing real-time, synchronized negotiation and collaboration from request to renewal.

Delving deeper, a next-gen CLM solution with artificial intelligence (AI)-enabled dashboards can assist the entire enterprise in optimizing contract management. For example, a risk analysis dashboard can up-level visibility by furnishing insights to calculate and understand overall contract portfolio risks, while a comprehensive clause-usage dashboard harnesses essential language to assist in expediting the contract lifecycle, contributing to a productivity increase of more than 50%.

“CLM solutions provide the answer to the ever-prevalent question, ‘What is the status of my contract?’ Without a point of reference, an enterprise can waste time and energy tracking their in-flight contracts,” James Kearney, Director at Qualitas Consulting Group, an Onit partner, explained.

2. Accelerate deal closures

In a corporate landscape where time equals money, it’s easy to see why there can be a push-pull mentality between Legal and Sales: whereas Sales wants to close deals as quickly as possible to meet targets and drive revenue, Legal must scrutinize every detail of each contract to minimize risk and ensure regulatory compliance.

While it’s no secret that streamlining contract cycles can fuel sales velocity, being truly conscientious requires time — and this is where next-gen CLM comes in. By using pre-configured and data-sourced templates, automated digital signatures, and a library of terms and conditions, revenue operations can execute accurate contracts without necessarily waiting for legal operations’ contract-by-contract approval. Additionally, instead of passing versions back and forth, the latest CLM tools allow Legal and Sales to redline contracts simultaneously, often in two minutes or less – a process that is proving to elevate collaboration as well as advance sales cycles by as much as 24%.

“We are seeing more legal departments looking for ways to empower and shift responsibility for lower risk, higher volume contract work to the parties more directly involved in those transactions,” added Kearney. “Finding and properly leveraging a CLM platform capable of reducing the inherent friction between business and Legal, while simultaneously improving the overall fidelity of the final contracts themselves, will be a critical consideration for clients in 2023 and beyond.”

3. Prevent revenue leakage

Contract renewals are vital for recurring revenue recognition and business retention. Missed contract obligations can damage your company’s relationships and reputation (not to mention the potential financial cost). With a next-gen CLM solution, your company can devise playbooks that lay out the ground rules for contract negotiations and amendments and automate AI alerts for obligation management.

You can also stay on top of renewals — and augment efficiency overall — by integrating with an external, cloud-based system. System integrations can drive efficiency by reducing repeated manual labor, synchronizing data that initiates contract creation, and eliminating siloed systems for more vital enterprise-wide collaboration.

“It is imperative that companies take steps to insulate themselves against legacy contracting processes that may have been completely manual or ad-hoc in nature,” Kearney elaborated. “Such processes are typically born out of necessity by tenured staff, who have the institutional knowledge collectively locked up inside their heads. Transforming ‘this is the way we have always done it’ processes and incorporating historical knowledge into a robust CLM solution will help mitigate against the likelihood of both missed obligations and lost opportunities.”

Collaboration first – and future-forward

There is empowerment in collaboration. For businesses and practitioners that wish to grow, differentiate, and succeed, next-generation CLM can be a catalyst for evolution, helping to diminish complexity across the enterprise as it saves time, simplifies workflows, and bolsters contract portfolio value.

When openness and innovation meet, risk is better managed, costs are better understood, and true connection can occur. By breaking down silos, the most innovative and intelligent CLM will galvanize every function within an enterprise to work together, driving your business toward operational excellence with the technology of tomorrow leading the way.

Learn how Onit’s next-generation CLM solutions and AI-powered innovations meet you where you work with end-to-end automation of the contract management process to cultivate partnerships, elevate efficiency, and ignite revenue growth for enterprise-wide success.

State-of-the-art contract lifecycle management (CLM) technology has come a long way in making a difference for enterprise businesses. But is your current CLM solution up to snuff? Here’s what to look for so you can uplevel the streamlining of your contract review, drive revenue generation, and future-proof your portfolio and business.

In any typical workday, week, quarter, and fiscal year, the average Fortune 1000 company may handle several tens of thousands of contracts.

That means that — spanning your enterprise, and pulling in colleagues from Sales, Procurement, and Finance — each contract will need to be negotiated, reviewed, and executed. Then, when that part of the process is complete, with signatures on the proverbial dotted lines, the lifecycle management of that contract begins, including monitoring for regulatory compliance and “re”-review at renewal time.

Now, repeat that process… perhaps 25,000 (or more) times!

This very real scenario — which commands at least half, and as much as 70%, of legal professionals’ time — is what makes end-to-end CLM solutions essential. Whereas manual contract management can cause roadblocks and revenue leakage, the most cutting-edge CLM tools transform the contracting process’s speed and spending, from capture and creation through post-execution management, all while harnessing critical insights and diminishing risk.

Could your CLM use an overhaul? Here are five signs:

1. “It’s a challenge to find our contracts.”

To elevate efficiency and drive revenue, you need to know where every contract is. However, manual tools like spreadsheets, network shares, and legacy technology solutions tend to be unwieldy and jam up workflows.

The newest CLM tools with built-in version control and readily searchable repositories serve as a single source of truth, eliminating precious hours of searching for crucial information and helping business operations regain control of all contracts — leading to a 50%+ improvement in productivity and 24% reduction in the average sales cycle length.

2. “There isn’t enough visibility into our portfolio.”

Contracts are the nucleus of every business cell, defining any value exchanged. Without insight into obligations and terms, there can be revenue leakage of more than 9% annually.

For this reason, legal ops, procurement teams, and portfolio managers require visibility to discover and assess risk before it disrupts business. How to do this when elements of risk may be hidden deep within contracts? Introduce CLM with a risk analysis dashboard to provide visibility and initiate proactive contract management. By assessing contracts for varying degrees of risk based on developed playbooks and calculating a risk score, your team will have thorough and profound oversight of your contract portfolio.

3. “We’re not getting the value we wanted.”

Your CLM solution may have initially provided some shiny bells and whistles, but if it’s begun to feel subpar, the most state-of-the-art way to achieve greater value is by integrating CLM with automation and artificial intelligence (AI) to escalate the contract review and management process.

When powered by AI, today’s CLM solutions can redline a contract in two minutes or less and have been proven to reduce end-to-end NDA processing time by a remarkable 70%. A clause usage dashboard can offer an insight-centric approach to contract generation, and the best contract management platforms also have intuitive, user-friendly interfaces that help your company get up and running in less than 30 days.

Of course, the value of vanguard technologies isn’t always realized instantaneously — but integrated systems do deliver on their promise for both scaling and sustaining material growth with the potential of slashing overall business costs by up to 90%.

4. “We’ve missed renewal deadlines.”

Staying up-to-speed on contract renewals can feel like a formidable task — but not remaining on top of deadlines can be deleterious, seriously impacting customer retention rates.

Intelligent CLM is equipped with real-time obligation tracking to manage and measure not only all emerging legal requirements and compliance-related tasks, but also intermittent event-driven obligations, such as renewal dates, expirations, cycle times, and even pricing changes. This way, your team will never overlook or miss an important date again.

5. “We could use better cross-functional collaboration.”

Legal operations doesn’t operate in a silo. To achieve goals with the most successful outcomes, connection and collaboration with Sales, Procurement, and other functions are vital — making the ability for all departments to view, track, redline, and approve documents an absolute necessity as well.

With the latest CLM, all departments can manage contracts in conjunction, with edits synchronized across platforms to secure version control and eradicate duplicate entry. When combined with system integrations, CLM also allows departments to synchronize data and create compliance contracts, NDAs, and MSAs, catapulting accuracy and efficiency and eliminating siloed contract management.

Taking control with innovation

There has been a definitive evolution in the execution and efficiency of contract management. If you nodded in agreement with any of the above statements, the message is clear: It’s time to upgrade your CLM.

In doing so, you can eliminate inefficiencies, enhance insights, and provide deeper visibility into your contract portfolio. Not only that, but the time saved can be funneled into Legal serving as a trusted advisor, corporate role model, and creating an impact where it matters most: building relationships, developing strategy, and skyrocketing the material growth of your business.

Learn how Onit’s next-generation CLM solutions and AI-powered innovations meet you where you work with end-to-end automation of the contract management process to cultivate partnerships, elevate efficiency, and ignite revenue growth for enterprise-wide success.

Contract lifecycle management (CLM) solutions with end-to-end automation diminish risk and catapult both operational and cost efficiency — but they may also come with uncertainty about how (and why) they make a difference. Here, we dispel the misinformation so you can get back your time and empower your organization for success.

Nessie amid a swirl of bubbles in Loch Ness’ cold, murky waters. Sasquatch’s enormous footprints stomping across the forest floor. Pandora, unable to resist temptation, twisting open the jar from which all the world’s evils escape.

These are some of the most famous myths — but there are also several surrounding CLM. Although AI-powered CLM solutions have been proven to deliver advanced contract review, document management, and risk mitigation, the 2022 Enterprise Legal Reputation (ELR) Report revealed half (54%) of legal professionals still do not use automated contract processes, leaving a major opportunity untapped for legal operations to impact and transform their businesses.

It’s time to tackle those misconceptions and debunk these outdated CLM myths.

Myth #1: CLM is cost-prohibitive, time-consuming, and difficult.

“Do more with less.” In this global macroeconomic market where cost containment and efficiency are key, that has become a near-constant mantra — and this is where CLM shines.

According to the ELR Report, 40% of legal professionals spend four to five hours each day manually reviewing and managing contracts. That means half of every week, quarter, and fiscal year is tied up in contracts — making half their time unavailable for anything else and essentially costing half their salary. And though some worry it will take too long to train their departments on CLM, the latest solutions are out-of-the-box, intuitive, and ready to implement. Further, the return on investment (ROI) is real for CLM, as it has been proven to shorten the length of the typical sales cycle by 24%.

The reality is there can be no revenue recognition until contracts are signed. CLM tools accelerate the entire contract process, from document generation and redlining to e-signature and finalization. This acceleration can then pilot faster decision-making on how to push contracts through review cycles, renewals, and negotiation — leading to faster material growth and both time and spend saved.

Myth #2: CLM will take over the work attorneys do.

While this is a classic fear and “rise of the robots” sci-fi flicks might try and convince you otherwise, it’s unfounded to believe that Legal will be replaced by CLM applications or any related AI offerings.

It’s true, of course, that AI has been developed to automate many duties, and the most innovative AI-enabled CLM can review and redline a contract in under two minutes, catching errors that our overworked human gazes might mistakenly overlook. Yet there is much tech cannot accomplish: establish strategic relationships with vendors and clients; negotiate deals, give advice, and propose forward-thinking innovation; initiate significant, meaningful, and lasting change. All of these require distinctively human skills and expertise.

That said, what is true is that technology is an enabler for businesses and practitioners who do wish to evolve and grow — and though automation will not replace attorneys, attorneys who do not adopt new tech will likely be replaced by those who do.

Myth #3: Migration of legacy contracts can happen automatically.

Unfortunately, there is nothing in life nor business that is a one-press “easy” button. Some contract management tools may be bolted to systems initially built for other business uses, limiting functionality and creating challenges for data migration.

So if you’ve been told that data migration is simple — that simply may not be true. However, it doesn’t have to feel impossible. Though filing cabinets, shared drives, and Excel spreadsheets may provide an illusion of order, what they don’t provide is overall visibility of your contract portfolio. CLM augmented by AI can help organize inventory, digitize contracts, and define data points. By analyzing and extracting legacy contract metadata — including critical dates, terms, and clauses — you can create and maintain an indexed, searchable, and reportable contract repository, preventing 9.2% in revenue leakage annually.

Myth #4: My department doesn’t need CLM.

Every department hires employees, negotiates with clients, procures vendors, and settles upon agreements. And so, every department can benefit from CLM.

While Legal’s top concern may be the age-old dance of speed vs. detail immersion for risk avoidance, Sales frequently fears contract holdups will hold up further revenue potential. Procurement, meanwhile, must juggle stakeholder needs, supplier value, and budgeting and spend. Yet CLM has been found to streamline the contract lifecycle for all parties. In fact, legal departments of billion-dollar companies that employ contract management technology often reduce their average contract cycle time by over 33%, from 30 days to just 20.

If you’re thinking, “Well, my company is nowhere near that size,” scalable CLM solutions may be even more what the legal tech revolution ordered: AI-enabled platforms assist legal departments to increase their productivity by more than 50% – which is analogous to having twice as many lawyers on staff!

The (top and) bottom line

With these CLM myths busted, you have the unique opportunity to lead the evolution of contract management for your business — saving on speed and spend and influencing topline revenue generation, bottom-line cost efficiency, and operational excellence for unprecedented success.

Learn how Onit’s next-generation CLM solutions and AI-powered innovations meet you where you work with end-to-end automation of the contract management process to cultivate partnerships, elevate efficiency, and ignite revenue growth for enterprise-wide success. 

Is your organization making the most of your contract portfolio? Learn how to take control and up-level your portfolio’s value with solutions that can reduce revenue leakage, provide more meaningful oversight, and unlock tremendous material impact — all while helping your department connect more deeply across the enterprise.

If a company is a house of business, then contracts are its foundation — so much so that many industries often have 90% or more of their annual revenue locked into contracts, according to McKinsey & Company.

On the flip side, a lack of efficient contract management can lead to diminished visibility, inconsistent workflows, damaged vendor and supplier relationships, and an erosion of value to your contract portfolio at an average of 9% — and as much as 15% — revenue loss each year.

Here are six ways your contract portfolio may be losing value and how you turn that around today:

1. Lack of pricing tier awareness.

Contracts determine the financial flow of an organization, with each one carrying its own set of terms and risks. There is term-based pricing, release orders that may delay the purchase, and evergreen contracts that could contain and express entirely different obligations — as well as any agreement your company, well, agrees to. However, when the buy side often proffers a “take as long as you wish” philosophy while the sell side supports cash-in-hand as fast as possible, making certain to keep clear note of more flexible (even unfavorable) tiers can empower your department to avoid revenue leakage.

2. Missing deadlines and renewals.

For many contracts, there is a certain sequence that can lead to penalties if not followed. These can be financial in nature such as fees, fines, and compensatory damages, but they may also include long-term ramifications, like damaged reputation or even vendor or client loss. Establishing customer expectations and clarifying consistent protocols like project timelines, production schedules, and delivery dates can help your department stay on top of important milestones and eliminate lost time and missed revenue opportunities.

3. Not holding vendors to terms.

Procurement contracts cement the partnership between buyers and suppliers. What vendors does our company use? What rates were negotiated? It’s all black-and-white in the contract. But if a company is lax about delivering what was agreed upon, all negotiations can be invalid. Don’t let a lack of visibility into spend performance get away from your business, as diligent enforcement of negotiated supplier terms is a primary source of revenue.

4. Playing “ostrich” with the risks.

Contracts are, by nature, conduits of risk mitigation — so even the simplest one can lay an organization bare to liability if not handled properly. Especially in a tumultuous macroeconomic market laden with pandemic supply chain issues and geopolitical conflict, it is crucial to maintain current regulatory knowledge, know how to adapt quickly to new financial guidelines, and be aware of which contracts in your portfolio have clauses built in to address risk. The ability to not bury your head in the sand and quickly pivot to examine contracts for risk compliance will speed time to future revenue.

5. A sense of disorganization.

One reason a contract portfolio may lose value is the simple chaos of our busy business lives. A study published in the Journal of Contract Management revealed that seven in 10 companies find it challenging to find vital documents, despite contracts being a critical business tool and source of value. The need to search for contracts is a thief of time better spent on higher-value tasks, such as analyzing data insights or becoming an advocate for meaningful diversity and inclusivity. Launching, migrating, and archiving a secure, central, and digital document repository with a keyword search tool will promote better transparency across functions and contribute to faster revenue recognition.

6. Reluctance to add automation and AI to the mix.

Manual contract management programs that involve spreadsheet-based processes are not only time prohibitive and labor-intensive — often usurping at least half of most legal professionals’ workdays — but also devoid of the insight that advances true efficiency. However, contract lifecycle management (CLM) solutions powered by artificial intelligence (AI) take visibility and efficiency to the next level by automating manual workflows and alerting teams to necessary updates and improvements. As a result, the most innovative can redline contracts in under two minutes, applying your company’s playbook and accelerating contract review by up to 70%.

A crossroad of opportunity and growth

The creation and execution of contracts comprise accountability, obligation, and trust. Visibility is also essential for discovering and assessing the risk that could disrupt business. Examining your contract portfolio regularly will help your department retain control, reduce rogue spending, and embrace collaboration across the enterprise. With this new era of CLM, innovation is at your fingertips to execute contracts more effectively and efficiently. This way, your team can focus on what matters most: unlocking the value of your existing contract portfolio, optimizing strategic and meaningful new partnerships, and skyrocketing your department’s revenue generation and operational excellence.

Learn how Onit’s next-generation CLM solutions and AI-powered innovations meet you where you work with end-to-end automation of the contract management process to cultivate partnerships, elevate efficiency, and ignite revenue growth for enterprise-wide success.

The challenges around finding a good CLM tool continue to occupy the minds of CLOs and GCs. In a recent survey, 70% said they are looking to improve their existing contract management software, which is not surprising since a sophisticated, enterprise CLM tool can accelerate revenue, reduce risks and provide consistency and standardization.

When it comes to implementing technology to help handle your contracts, all contract software is not created equal. The following list shares key characteristics you should look for in a CLM tool.

A CLM Tool for All Phases of Contract Management

Getting a deal inked is only half of the process. Many contract management systems focus heavily (or even solely) on the pre-signature contracting phase. This is understandable since that phase requires a lot of heavy lifting in terms of workflow, collaboration and communications – often across multiple departments.

However, as corporate legal departments know, the contract lifecycle doesn’t end when the papers are signed. The contractual obligations must be managed to ensure critical dates, times and deliverables are met and accounted for. CLM technology that accomplishes this includes capabilities such as:

• Batch review – Extract data from multiple legal documents at once for due diligence, applying contract updates or importing legacy contracts.
• Repapering – Identify which contracts need repapering due to regulatory, policy or commercial changes in less than five seconds.
• Contract abstraction – Identify key legal clauses, terms and details in documents for easy analysis and management.
• Audit compliance – Automate large-scale legal contract review during regulatory changes and export relevant details to .CSV reports and in-document notes.
• Due diligence – Automate the batch review of contracts for routine legal due diligence, making time for higher-value tasks.
• Legacy contract migration – Analyze legacy contract metadata rapidly to extract critical dates, terms and clauses to assist in the import.

Unlimited Users

Contracts reach far beyond legal and across the enterprise, including sales, marketing, HR, procurement and more. All depend on contracts to move the company forward. Yet, many CLM tools require pricy licenses for each user – a situation that prioritizes dollars rather than speed, collaboration and productivity. With unlimited licenses, any stakeholder involved in a contracting process can access the system for self-service, submissions, updates and more.

Pre-Trained AI for Your CLM Tool

Historically, training AI is a time-consuming and costly endeavor that requires specialized AI-specific skills and resources. It’s understandably an endeavor that corporate legal departments are equipped to handle.

Your CLM tool should come with out-of-the-box functionality with pre-trained AI, and it should incorporate thousands of existing clauses created by legal experts. This means you can start using it – and seeing its value – right away.

Independence from Legacy Products

Since contract management challenges extend across an enterprise, some popular CLM solutions are reliant on specific legacy products or platforms. In this context, the contract management feature may be an addition with limited functionality bolted to a system built for an entirely different business use. This can present challenges, as it limits contract management potential. Beyond limited functionality, you may not be able to use or have access to the product (or have to pay for additional licenses). Additionally, the legacy product may require you to invest time in implementing and training to understand it beyond the contract management functionality. A better solution is to have a CLM tool independent of legacy products – a full-fledged system robust enough to handle the challenges of contract management on an enterprise level.

CLM Tool Integrations

Your CLM should work where you work, meaning integrations are vital. Most contract stakeholders – including lawyers – rely on Microsoft Word for contracts, which means you want to make sure your CLM system has a Microsoft Word add-in. The same is true for any other tools you use heavily or are used in your company. You want to make sure your CLM solution offers seamless integrations, so you don’t have to switch back and forth between solutions or resort to data entry to continue the information flow. This includes integration with existing legal systems such as matter management, spend management, legal holds, legal service requests, analytics and more.

Proven Expertise and Support

Never underestimate the value of your experience with a CLM technology provider. When you’re purchasing something as crucial as CLM, you want an expert sales representative who can understand your needs, ensure your CLM solution is a good fit and offer services and partners that can help with configuration, implementation and support.

The right CLM solution can mean significant savings in cost, better use of your staff’s time, increased efficiency and more. Schedule a demonstration with us today to learn more about how Onit CLM can work for you.