Contract lifecycle management systems allow companies to capture, automate and analyze the entire contract lifecycle from initiation through approval, compliance and renewals. It eliminates data silos, automates workflows and reduces the overall time spent – which means it adds to business value.
When you add AI, the value of a contract lifecycle system increases drastically as technology continuously learns and improves to support in-house counsel.
The Pitfalls of Managing Contracts Manually
Many corporations rely on manual (or mostly manual) processes to handle contracts from inception to execution and beyond. Not surprisingly, these methods include cutting and pasting into templates, writing and sending emails, searching for documents and saving to multiple drives. The process is inefficient and poses risks such as a failure to enforce negotiated supplier terms, inadequate delivery to customers, errors and a reactive vs. proactive approach to contract management. These challenges increase drastically considering that the contract process extends across multiple departments, geographies and external participants.
Signs that Your Corporate Legal Department Needs a Contract Management System
How can you tell if you need a contract lifecycle management system? Start by taking a look at your overall contract management methodology. If these problems keep occurring, it’s time to explore new options:
- Inability to manage changes – Businesses need to be up to speed on renewal dates, pricing changes, emerging legal requirements and other events that require discussions with customers or vendors specifically about the contractual relationship. The ability to manage contracts – particularly changes over time and the renewal process – can directly impact customer retention rates.
- Information silos and manual processes – A business can impair contract management progress and quality if it can’t maintain everything in a centralized location, accessible with permissions to involved parties and with changes tracked in real-time.
- Inconsistent legal language – Gaps in standardized language introduce risk and confusion. If participants can’t determine if contracts contain accurate language or what is different between them, lawyers might have to get involved in every single deal. This also increases the risk of being noncompliant or leaving revenue on the table.
- Lack of insight into contract processes and variables – Agreements outline the terms of the value exchanged. When corporate legal doesn’t have insight into contract terms, obligations and value, it cannot ensure the business is getting the correct value for deals and money may be lost.
Contract Lifecycle Management Systems Quantified
Businesses that implement a seamless contract lifecycle management process compress their time to revenue, mitigate risks by having fewer contractual exceptions and increase customer satisfaction.
How do the numbers add up? We’ve collected the latest statistics in a new infographic to demonstrate the impact of CLM and AI.
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