Why Document Management Is an Important Part of CLM
Document management is key to a successful contract lifecycle management (CLM) system. Proper document management guarantees that everyone on your team knows the exact location of every document and is aware of its precise stage within its lifecycle. Without it, CLM would not exist.
What is document management?
Document management is the systematic organization used to store, control, and track electronic documents. Efficient document management will decrease turnaround times and mitigate risk by managing all contracts and documents in one secure, cloud-based platform.
You can visualize document management as a digital way to organize standard paper documents. These organizational actions include:
- Location of stored documents
- Check-in/check-out methods
- Version control
- Security and access control
- Audit trails
When you use a digital document management system, the challenges of implementing such fundamental features decrease dramatically. In addition, as opposed to physical paper methods, you’ll find that digital document management provides efficiency, cost reduction, compliance, and auditing capabilities.
What is CLM?
CLM software makes contract location and internal document management more accessible, including document design, development, and execution. It provides all the solutions to these issues in one convenient package. A proper CLM platform contains the elements you need to resolve drafting questions, edit between various company levels, and send changes in documents to multiple individuals.
The importance of document management
Your organization requires a document management strategy that improves company-wide access to information and stores documents in a secure repository, with instant access using multiple search parameters. Furthermore, you’ll want this same strategy to reduce operating costs and mitigate litigation risks.
Document management within CLM combines the following features into one platform:
Your organization needs to track each document change. Document management ensures that everyone involved is working with the same document and that it ends up in the right hands with all updated changes in place.
Benefits of document management
You’ll miss out on the full benefits of document management software if you only use it to organize and retrieve documents. Document management is most beneficial when the following features are in place:
- Instant cloud-based access on multiple platforms and mobile devices
- A powerful search feature to retrieve documents and produce quick answers to questions presented
- Version control, allowing you to always work with the most recent document
- Permissions are granted to pertinent staff only for accessing varying stages of the document
- Support for Word-based documents and other universal formats
Document management solutions can automate and expedite the document review process, making vast digital data more manageable. You’ll find this particularly helpful when reviewing e-Discovery.
Your company will see the additional benefit of sending notifications and alerts to appropriate personnel. Use these alerts to inform all parties of assignments, requirements, information, deadlines, terminations, and contract renewals.
Key stages of document management
As the main component within CLM, document management generally follows the contract lifecycle management stages. Centralizing contract storage and allowing instant document retrieval is the priority.
The CLM stages that automate and streamline document processes are:
Streamlining document management within CLM
Digital contracting is the new model used for business contracts. Streamlining your document management is key to implementing company-wide collaboration. Your document management system should allow for the following essential functions:
- Repository for storage
- Track contracts
- Find contracts
- Pull records
- Answer questions when needed
- Search function
Ironclad’s dynamic contract repository contains metadata that will describe the data and pinpoint its location but does not contain the actual data itself. Updates to the primary location are instantly published within the entire system, eliminating duplicate legal documents and work.
When you have a contract repository as a set place to analyze and store data, your legal team will increase their efficiency while working with relevant documents.
Tracking and storing contracts
Confirming that all the parties involved have received their most current contracts can be difficult when your documents are scattered and not stored well.
Just such a case occurred with one Ironclad client, the Texas Rangers. Before implementing a document management system, the Rangers primarily had their contracts scattered in emails and Word documents. But their newly built, $1.2 billion stadium with premium seats needed a document management system that could handle 2000+ additional contracts to sell those premium seats.
Katie Morgan, the Texas Rangers Director of Business Analytics, explained that their previous contract storing and tracking method “just wasn’t feasible.” They needed to expedite and keep track of every contract while still being able to “tie everything back together.” She emphasized that “we were at a deficit if we didn’t find a company like Ironclad.” When the pandemic hit in 2020, the Rangers were able to use Ironclad’s CLM platform to review and seamlessly update hundreds of contracts with new data, something they would not have been able to do previously.
Dropbox, one of the world’s leading cloud-hosting and file-sharing platforms, was another organization that manually filed documents within physical folders. After signing up with Ironclad, Dropbox now stores documents and automatically names them for easy retrieval.
Finding relevant contracts is no longer an issue for Dropbox Twenty. Twenty to thirty pieces of metadata are collected per contract, allowing Dropbox’s legal team to track and find important information. Furthermore, Ironclad’s document management features enabled the turnaround time to go from two weeks to just minutes, or in the words of Ashlee Best, Legal Operations Manager for Dropbox, “as fast as you can click.”
You can use instant metadata searches to collect and filter through contracts when you have an apt repository. With this level of document management, you can find the most relevant documents while simultaneously increasing accuracy and speed.
Metadata tagging is an essential part of digital document management. Metadata tags are grouped into three distinct categories:
- Descriptive metadata—keywords, file name, designated author, etc.
- Structural metadata—how a document is stored within an organization
- Administrative metadata—date created, date edited, file type
Document management success
Secure storage and collaboration
Document management systems can range in size from small scope and reach up to large, worldwide configurations that serve multiple brands across the globe. For example, L’Oréal USA handles hundreds of contracts involving 35 different brands worldwide. They had 80% brick-and-mortar sales when the pandemic hit in 2020 and had to convert to a digitized platform rapidly. They credit Ironclad for a successful transition into the world’s first beauty tech company.
Document contract management allowed L’Oréal to secure storage and collaborate on multiple documents with all parties during contracting processes. As a result, they grew their online sales by over 60%, jumping five years in their e-commerce development plan within a matter of months. “We went from a tool for lawyers to a full-on collaboration platform for everyone in the contracting process, from Sourcing to Finance to IT,” says Elyssa Dunleavy, AVP Advertising Counsel, L’Oréal USA.
Process and workflow
As a start-up, Signifyd (a platform that protects online merchants from payment fraud and consumer abuse) did not need digital contracting. Instead, they began their manual document management with an intake form and a completely new contract for each customer request. These manually processed contracts used time-consuming emails to get internal approvals. Eventually, prospective customers would receive their contracts.
As Signifyd doubled their annual revenue, their contract volume also increased, and their terms became far more complicated. These developments called for the custom features found in Ironclad’s document management system, including individual adjustments and higher performance standards. “Once you understand the process,” notes Signifyd Contracts Manager Zuhair Saadat, “creating a multi-product contract can be completed in like a minute.”
AppDynamics, the fastest-growing application performance management solution, implemented Ironclad’s document management features to guarantee contract compliance. As part of a $3.7 billion acquisition, AppDynamics had to make sure they achieved 100% in sales compliance. Ironclad helped them get there.
Ironclad received an award from the leading independent analyst publication, The Forrester Wave™, for Contract Lifecycle Management For All Contracts, Q1 2021 Ironclad was also named one of the 20 Rising Stars on the Forbes Cloud Top 100 Companies. With its document management and dynamic, centralized repository, you’ll see how Ironclad’s digital contracting platform can sort relevant documents in seconds. Try Ironclad today by requesting a trial.
- What is document management?
- What is CLM?
- The importance of document management
- Benefits of document management
- Key stages of document management
- Streamlining document management within CLM
- Document management success
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Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney. Use of and access to any of the resources contained within Ironclad’s site do not create an attorney-client relationship between the user and Ironclad.