A massive chunk of corporate paperwork comprises the very foundation of every successful business- contracts. Manually toiling with volumes of contracts is exhausting, and the risk of manual errors is alarming. But not with Contract Lifecycle Management (CLM) software. Let's know about it!
What is Contract Lifecycle Management?
CLM refers to managing every stage of a contract, from drafting to renewal or termination.
CLM was traditionally a manual task, but it carried risks of ambiguities. Nowadays, advanced
CLM solutions enable enterprises to manage contracts digitally.
The lifecycle of a contract:
The stages in the lifecycle of a contract are:
1.Initiation:Stakeholders submit essential data like parties' details, important dates, etc., to draft the new contract, addendum, or renewal.
2.Drafting:Stakeholders submit essential data like parties' details, important dates, etc., to draft the new contract, addendum, or renewal.
3.Negotiation:It's arguably the longest stage in the contract's lifecycle, involving examining, red-lining, and agreeing with the draft.
4.Approval:Final review and clearance of the draft.
5.Signing:Stamping and signing the approved draft.
6.Execution:Parties perform the obligations they agreed upon under the contract.
7.Renewal/ Termination:The contract either ends or gets renewed.
Manual CLM: Challenges
1.Time-consuming:Nearly 10 minutes goes waste retrieving and re-filing (if lost) a contract! Negotiations through conventional methods like emails and approvals through paper-circulation exhaust time and energy, ultimately reducing overall productivity.
2.Deficient visibility:Manual workflows force HR-legal teams to flip over tons of paperwork to track every contract. It lacks a streamlined bird's-eye view, resulting in undesirable bottlenecks like non-compliances.
3.Risk-prone:To err is human, but forgiveness is seldom in contracts. An error in compliance means a breach, leading to legal consequences. Manual contracts paperwork is vulnerable to thefts or data breaches.
4.Inapt storage:Storage shortages lead to loss or misplacement of documents. Companies spend roughly 25 hours to recreate each lost document! Physical storage consumes space worth nearly $1500 every year.
Now that we know the setbacks in manual CLM, let's see how CLM software is a game-changer.
The benefits of CLM software span all enterprises frequently entering into contracts. CLM software streamlines and automates the contract's lifecycle and pampers them from initiation to renewal.
It provides a transparent yet secure medium to gather relevant sensitive details.
CLM software provides a forum for parties to negotiate clutter-freely. Drafting the contract is simplified, as users can choose clauses from pre-drafted templates of AI-powered template libraries.
Enterprises can avoid repetitive re-drafting of frequently-used contracts by storing their templates in the cloud and re-using them whenever needed.
Intelligent and user-friendly solutions like all-in-one dashboards and track-changes provide users a bird's-eye-view of all their contracts, allowing them to effectively monitor the documents without skimming over pages and switching between emails and spreadsheets.
The dashboards are the mirror of the contracts, reflecting every facet of the same. These dashboards help stakeholders identify the status of each contract and thereby make necessary changes.
CLM software lets stakeholders track the progress made in the contract in real-time using the audit trails, promoting better transparency in the business.
Cut-down operational costs:
Users can instantly e-sign and e-stamp documents with CLM software, avoiding the inconveniences of physically procuring signatures of all signatories and the potential stamp paper frauds. Parties can renegotiate clauses and renew the contract using the original draft stored in cloud storage, saving the cost of re-drafting similar documents.
Enterprises waste nearly $2.5M-$3.5M every year on losing, re-filing, and searching non-existing documents! It not only consumes time and money but also affects enterprise-client relations. Inappropriately organizing and storing documents makes the retrieval process cumbersome. But CLM software saves this unwarranted consequence by securely preserving the documents in cloud storage, allowing only authorized users to access them.
Forget foraging piles of paperwork when you can retrieve the required contracts in seconds using the advanced search features.
Overlooking crucial deadlines is typical with manual CLM; it challenges the accurate monitoring of each contract. But with CLM software, stakeholders get automated notifications, reminding them to comply with contractual conditions.
In-built AI-powered calendars remind stakeholders of renewal or termination dates via emails, so the business runs smoothly by avoiding potential legal consequences.
Ready to automate your contract workflow?
Your enterprise needs an easy yet progressive platform like The Legal Capsule to automate your CLM efficiently. With The Legal Capsule, you can:
Draft contracts using legally-sound clauses from the library and save them for future use;
Negotiate with counterparties using the red-lining and commenting feature without switching to third-party platforms;
Instantly e-sign and e-stamp your contracts, and track all Stamp Paper requests;
securely store your contracts in the cloud repository, and access them wherever and whenever needed;
get periodical email alerts on important dates and much more.
Automate your CLM using The Legal Capsule, and reap the benefits today!