Throughout a contract’s existence, it will go through six steps in order to serve its purpose.
The streamlined contract process – from start to finish – is called contract lifecycle management, or CLM. This process helps avoid bottlenecks, vulnerable security threats, miscommunications, and errors.
In a nutshell, mastering CLM is essential to your business’ growth.
Each step in the CLM process provides valuable and actionable insights. Understanding the six steps will help optimize your contracts’ performance and improve your organization’s resource allocation. Here are the six steps:
An effective contract management lifecycle begins with the gathering phase. As soon as a specific individual or department starts researching and requesting information, detailed documentation should start from the get-go. This will expedite the contract creation process.
Thankfully, with CLM, you can leverage a template-based contract to ensure every contract is accurately drafted faster than you thought was possible. Some businesses manage thousands of contracts simultaneously. Why recreate the wheel? By utilizing contract management software, you can simply generate a template to save hours in just a few minutes.
Traditionally one of the biggest contracting bottlenecks, approvals can require significant back-and-forth with in-house and external decision-makers. This step can be tedious because it can quickly become disorganized as outdated contracts are released into the wild via email attachment. Don’t miss a beat – avoid the chaos and establish a contract workflow that works for your organization.
On the surface, this is a seemingly simple step, however, it can majorly slow down contract execution. Utilize an electronic signature to increase security, speed up the process and make e-filing simple.
Now you get to sit back and watch your contract do its thing. Yes, and no. CLM software enables you to create customized alerts and reminders – big or small – when certain terms and conditions are met. Use this data to optimize contract performance and efficiency. To get the most value out of your contract, it’s important to remain actively engaged while the contract is in play. Dive into the data to course-correct along the way or learn how to adjust once it’s time to renew.
The last step of the contract management lifecycle can be considered the most crucial. It’s not uncommon for contract renewals to be overlooked with so much going on. Set up automatic reminders and allot time to review contract results so you can renegotiate if necessary, with renewal right around the corner.
Your ability to navigate the six steps in a contract management lifecycle can drastically improve the cost savings and efficiency within your organization. Consider investing in a CLM software that alleviates the pressure on you and your team while it does the heavy lifting for you.
More about Ironclad
Ironclad is the leading digital contracting platform for legal teams. By streamlining contract workflows, from creation and approvals to compliance and insights, Ironclad frees legal to be the strategic advisors they’re meant to be. Ironclad is used by modern General Counsels and their teams at companies like Dropbox, AppDynamics and Fitbit to unlock the power of their contracts data. Ironclad was named one of the 20 Rising Stars as part of the Forbes 2019 Cloud 100 list, the definitive list of the top 100 private cloud companies in the world. The company is backed by investors like Accel, Sequoia, Y Combinator and Emergence Capital. To learn more, visit our homepage.
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