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Why CLMs Should Matter to IT Leaders

January 16, 2024 3 min read
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In the information technology (IT) space, because they’re responsible for designing and implementing an IT operating model that covers organizational structure, governance processes, digital transformation, and much more in service of driving growth, cost optimization, and an improved customer experience, IT leaders are constantly seeking ways to increase overall inefficiencies. And one oft-overlooked yet critical aspect of IT management–and a key to its improvement– is contract lifecycle management, especially at large organizations. After all, the larger the company, the higher the number of IT vendors and the more complex the contracts. But what kind of role can a CLM play, and how can it be effectively harnessed?

Visibility & Control

IT leaders are often asked for a view of all contracts across the organization, even if the contracts themselves technically sit under sales, procurement, finance, marketing, or some other department. They’re expected to keep up with software vendor contract renewals, contract statuses, risk profiles associated with certain contracts – you name it. And the manual tracking methods commonly used to manage them–Microsoft Excel, Google Docs, old legacy CLMs with functionality that hasn’t been updated in years, or in worst cases, paper–result in scattered, out of date information and difficulty enforcing compliance and identifying potential risks.


With a CLM that offers a robust digital repository, IT leaders have a centralized space of all contracts, offering them a real-time, birds eye view of the state of affairs, from seeing how many contracts are in what stage to assessing the total contract value of all software vendors used by the organization. As an added bonus, centralization leads to more seamless collaboration, which in turn leads to faster decision-making, reduced bottlenecks, and improved cross-functional communication.

Risk Mitigation

Their teams can also easily dig into the contract metadata itself to identify contractual risks, like non-compliance, harried deadlines, or ambiguous terms and actively combat them via AI-powered features that ensure the right terms and templates are being used and the approvals are routed to the right people at the right time.This functionality and the security it provides is invaluable, especially as they become increasingly involved in broader, business-driving or cost optimization initiatives.

Cost Optimization

In today’s socio-economic landscape, budgets across every industry and every segment are getting slashed in the name of spartan-like efficiency, and IT budgets are no exception. What’s more is that they are also commonly saddled with the unexpected costs arising from contract disputes, non-compliance penalties, or missed negotiation opportunities – in addition to the standard burden of proving a return on tech investment via platform adoption within their orgs. Luckily, CLMs can pack a powerful punch when it comes to IT cost optimization if they’re armed with intuitive interfaces, deep integrations, and robust data analytics.


An easy-to-use platform (along with training, of course) is key to driving adoption across the company, and a high adoption rate is the gold standard of successful software implementation. High adoption also means less time and money on and off-boarding new software vendors, less time and money managing internal change, and a general increase in overall efficiency because all stakeholders are actively using the same platform. The longevity that high adoption provides can even act as leverage when negotiating favorable terms when renewal comes around because you can buy “in-bulk”.


CLMs offering powerful integrations with some of the most popular software out there–Salesforce, Slack, Coupa, just to name a few– can also be game-changers to IT leaders and their budgets, again because they offer ways to streamline disparate processes that result in time and money wasted. For example, if a CLM is integrated with procurement software like OneTrust, the back and forth needed to onboard a new vendor, uncover vendor performance, or dig up historically negotiated terms  is greatly reduced because the systems are already sharing information, streamlining it, and cutting down on the duplicate work that would be necessary to keep both updated.

Data Analytics

Using a CLM’s robust data analytics capabilities, IT teams can use contract data to compare what you agreed to and what you use, especially if the platform itself automatically logs and configures that data for easy searchability. For example, comparing license terms to usage rates reveals underutilized seats you can save money on at renewal time or offer a warning to scale back use if there are over-usage fees. Keeping an eye on upcoming renewals also gives you time to reflect on service downtime or problem resolution issues that you can use during contract negotiation.

The tip of the iceberg

In the past few years, CLMs have emerged as critical tools that can both positively and negatively impact the success of IT-driven projects, and that trend is growing. We’ve walked through just some of the ways that IT leaders can harness the power of an end-to-end, deeply integrated, AI-driven CLM platform to drive adoption, mitigate risk, and increase efficiency, but as the technology continues to develop and the contract management space continues to evolve in answer, the possibilities are endless.






Explore how Ironclad can streamline IT contract management processes or request a demo today. 


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