Onit, Inc. Enterprise Apps

What Are CLM Tools and How Do They Help Sales, Procurement and Legal?

Sales, procurement, corporate legal departments and more are increasingly turning to AI, automation and other technologies to ease the burden of routine tasks, increase efficiency and better collaborate with other departments within the business. Given the often repetitive nature of contracts, management of buy-side, sell-side and corporate contracts has become a prime area benefiting from CLM technologies.

Why Companies Need Contract Lifecycle Management Tools

Contract management challenges vary by department and role. However, many stakeholders involved with contracts share the same desire for a quick review process and visibility into contract activity.

General counsel and chief legal officers have concerns such as a lack of oversight on current contracts, balancing speed and review and losing revenue when add-ons, upgrades and renewals are missed.

Contract attorneys need to be able to consistently and efficiently compare third-party contracts to company contract standards and extract key provisions from large amounts of contracts to manage their company’s risks. They also need to track critical dates and locate contracts in a searchable repository quickly.

Legal operations professionals face similar but often more practical contract management challenges that speak to their specialization. These challenges include accelerating turnaround time, reducing costs and providing attorneys with tools to help them manage contracts, internal legal requests and overall risks.

Sales departments know that contract delays mean delays in revenue-generating opportunities. They want to avoid black box syndrome when sending contracts for legal review. With this in mind, options such as self-service and AI-assisted first-pass review are especially attractive.

Procurement focuses on effectively enabling spend owners to maximize their suppliers’ value to meet their objectives. When it comes to contracts, they want to balance the needs of multiple stakeholders, manage contracts centrally, decrease risk and reconcile spend against budget.

What Are CLM Tools?

Contract lifecycle management (CLM) tools streamline the contracting process from start to finish, bringing benefits to both the pre-signature and post-signature phases of contracting and creating self-service opportunities for stakeholders. CLM tools can reduce the average sales cycle by 24% and lower the average hours spent on contracts by 20%.

They use technologies such as AI and automation to accelerate the review process and manage contracts from capture and creation, through negotiations and approvals, to execution and post-execution management. An end-to-end solution improves consistency, saves time and surfaces critical insights that allow for proactive, informed decision-making. For example, when applied to NDAs, automation, AI and CLM reduce the end-to-end NDA processing time by 70%.

A typical contract lifecycle process. When handled manually, it can lead to delays, errors, high costs and increased risk.

How do CLM tools accomplish this? Here are some examples of how they work.

An ideal CLM tool provides:

What Are CLM Tools Powered by AI?

In addition to the features mentioned above, the most effective CLM tools harness the power of artificial intelligence (AI). This includes a combination of AI techniques such as natural language processing, deep learning and proprietary algorithms that build and release fully-formed AI models. Here’s how AI supercharges contract management:

How to Learn More about CLM Tools

Here are some more resources that answer the question, “What are CLM tools?”

Schedule a demonstration with us today to learn more about how CLM from Onit can benefit your legal department and other departments across your organization.

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