Wikipedia describes Contract Lifecycle Management (CLM) as “the proactive, methodical management of a contract from initiation through award, compliance and renewal. Implementing CLM can lead to significant improvements in cost savings and efficiency, limit organizational liability and increase compliance with legal requirements.” What’s not to like?
However, if you search for Contract Management Software in Capterra you will generate 430 results! How do you go about choosing the best system for your requirements?
The common desired features of Contract Lifecycle Management (CLM) systems comprise:
- Automated contract creation: According to IACCM research, the transaction costs of contract formation lie somewhere between $6,900 to $49,000 (depending on complexity), making it fertile grounds for efficiencies through automation. Writing a contract manually is time-consuming and prone to omissions and errors without professional support, typically provided by the legal department or outside counsel. However, through the use of automated document assembly tools, the process can be streamlined and made consistent, allowing other departments, such as sales and procurement, to leverage the advice and guidance of legal colleagues to generate 1st draft documents themselves. The technology-supported procedure speeds up the start of the contracting cycle and releases valuable time for the legal team to concentrate on other value-added tasks. The Mattersmith Productivity Centre Platform includes Precedents in its suit of tools which allows the generation of documents using a simple question and answer interface.
- Secure contract identification and storage: Once the contract is made, it is of fundamental importance that the contract itself and any other important documents should be securely stored and easily accessible. However, as reported by the Journal of Contract Management “71% of companies are unable to find 10% or more of their contracts.” The Mattersmith Productivity Centre Platform includes Doc-Tracker which is a workflow tool to manage documents. A dashboard shows performance against the agreed times for completion, key data about the contract, whilst individual case files contain important information about the document, including a description of the work to be done, the parties to the document, and saved searches of documents.
- Contract negotiation and review: the negotiation of terms is one of the most critical stages of a contract’s lifecycle. Productive and efficient negotiations rely upon good preparation, and one aspect of good preparation is having the positions, documents, and intended outcomes accessible in a user-friendly manner. CLM software which includes technology assisted review, whether by key word search or machine learning, can accelerate the analysis of the document whilst making sure that key issues and risks are considered. Workflow tools facilitating the request and approval of amendments. Close collaboration between legal personnel and the commercial team who will engage with the practical operation of the contract once in place reduces discrepancies and negotiation time. Ideally, the CLM platform will contain an expert system shell, enabling subject matter experts to publish guidance and content within the organisation. The Mattersmith Productivity Centre Platform includes Doc-Analyser which searches unstructured text and integrates with our expert system, Knowledge, enabling seamless access to a clause library of pre-approved clauses and playbooks created, based on our experience of commercial contracts.
- Audit trail: During negotiation of a contract, it is important to be able to track all the versions, correspondence, and edits to show a clear audit trail if you are unlucky enough for your contract to end up in litigation. The Mattersmith Productivity Centre Platform version of this feature is Doc-Tracker, by which users have the ability to store emails, upload versions of the document, and a messaging feature for collaboration both internally and with the counterparty.
- Process automation: Administrative workflows and business operational processes can be automated with simple workflows, notifications, and document version management. Eliminating ad hoc processes reduces risks, making contract management more predictable.
- Generating management reports and alerts: Contracts are “living” documents because they provide governance of the relationships to which they refer. Those relationships are your business and so contracts should not be filed away and forgotten about, which so often happens. This is why CLM systems, such as the Mattersmith Productivity Centre, provide alerts of milestone dates and enable data to be captured about contracts which is displayed via a dashboard in real time data.
Some of the benefits of a successfully implemented CLM strategy include:
- Saving money – reduce the risk of penalties for non-compliance, missed opportunities regarding special terms, and rebates and payment errors.
- Reducing the risk of contract disputes or litigation – ensure contractual obligations are identified and tracked.
- Delivering excellent customer service – fulfil contractual obligations therefore ensuring customer satisfaction and the potential for future business opportunities.
- Cost reductions – standardise the contractual process and streamlining contract administration therefore reducing labour time and costs.
- Avoiding ‘expiry surprise’ – an integrated CLM system will flag an expiry in good time, so that appropriate steps can be taken.
The Mattersmith Productivity Centre utilises Etimologic technology to offer some or all of its features to enable you to adapt and expand your specifications as your requirements develop. Mattersmith has populated the platform with guidance and knowledge to assist businesses to help themselves with their commercial contract requirements, however the technology is available in its original form to enable it to be populated with your own information if this is more suitable for your requirements. If you would like to talk to us about how we can help improve your contract lifecycle management, please get in touch: Contact Us | Contact Sales Team | Mattersmith Pro.