Organisations of all sizes juggle multiple contracts, across different stages of the contract lifecycle. Leading contract lifecycle management software is crucial to help you reduce risk, improve productivity and maximise the value of your contracts.
What is the contract lifecycle?
The contract lifecycle is the evolutionary process through which a contract is drafted, reviewed, signed and executed. Lifecycle is the description of a contract’s frequently compartmentalised journey.
The key stages of contract lifecycle management
There are eight recognised steps:
- Requests: All stakeholders share what they expect from a new contract, amendment or contract renewal.
- Authoring: Involved parties put the terms and conditions of a contract into writing. Any authorised personnel can execute the authoring phase. All stakeholders are clearly identified and pending terms are specified.
- Negotiations: Parties negotiate the parameters drafted during the previous phase. After back-and-forth communications and redlining, the conditions agreed upon give clarity on the expectations of all involved parties. This is a particularly important dimension as it ensures no ambiguity.
- Approvals: Every party reviews the draft contract. Approval time is contingent upon how many stakeholders are involved. An accessible, up-to-date record of changes made to the contract is a must, and the CLM software enables this audit trial.
- Signatures: A chief employee or a stakeholder with high clearance signs the contract to ratify its enactment. Software that offers e-Signature capabilities makes it much easier to sign one-off or bulk contracts, in or out of office, in an increasingly mobile landscape where manual signatures are time-consuming and inefficient.
- Obligations: All parties acknowledge their responsibility, and key milestones, dates, deliverables and payment windows are defined.
- Compliance: General contractual rules, standards, and practices are complied with, in addition to those specified in a particular contract. Proper compliance management helps reduce late fees and bottlenecks and sets the stage for future, stress-free contracts.
- Renewals: Parties are given the opportunity to revisit discounts, renegotiate terms and leverage other opportunities.
Streamlined contract authorship
Contract authorship is a complex and multi-dimensional process. Without reliable CLM software, some documents could be created without reference to preferred contract templates and pre-approved clauses, which could open the door to risk, non-compliance and ambiguity. It empowers clients with a standardised, version-tracking feature that maintains the consistency of a single, unswerving contract – no matter how often the contract circulates. This sees an end to delayed negotiation periods and roadblocks in the contract lifecycle, which can reduce the value of contracts.
Optimised contract negotiations
Reliable CLM systems simplify the contract tracking, reviewing and revision processes during negotiations. Easily readable and palatable changes mean that all parties can easily edit contracts, and familiarise themselves with the details in the process.
Expedited contract approval
The approval process can be cumbersome because chains of command are often intricate and vary between interested stakeholders. Manual contract workflow management requires contract managers to personally oversee the assignment of tasks and remind everyone involved in the approval process to perform their assigned duties. Any delay stalls the approval process. The workflow automation enabled by CLM software alerts the right people at the right time. It cuts contract approval time by eliminating potential bottlenecks, and thanks to automated notifications and timely updates re any chain-of-approval changes, keeps things moving.
Managing obligations and compliance
Due diligence and the speedy fulfillment of obligations is vital to a healthy contract lifecycle. CLM software enables the contractual requirements, but also supports the more strategic aspects of contract management such as data analysis and identifying potential opportunities.
The post-approval importance of contract lifecycle management systems
CLM software provides the visibility parties require to effectively manage contracts post-execution. It can automatically inform parties of whether standards and/or terms on a contract have been met. It also monitors obligations and compliance so that both parties meet expectations civilly and without any need for litigation.
Why CLM is crucial
Outdated contract management tools can result in failure to observe binding terms and conditions, which might result in damaging legal consequences. CLM software gives all parties anywhere, anytime access to deadlines and requirements so that they can navigate the contract process devoid of problems. It organises contracts and related data in an accessible hub, so that those with relevant permissions can view and access all relevant documents in a single location.
Cobblestone’s Contract Insight from Four Business Solutions
With Contract Insight® CobbleStone has pioneered contract lifecycle management since its inception. This intelligent contract lifecycle management software is relied upon by thousands of contract, risk, sales and legal professionals worldwide, and it benefits thousands of users in large and small organisations throughout the public and private sector. Its plethora of features empowers businesses like yours to:
- manage contracts more efficiently
- mitigate risk
- oversee compliance
- draft documents quickly
- track costs
- receive alerts
- sign documents with E-signatures
- reduce contract management costs and lost productivity due to outdated contract administration procedures.
If you’d like a demo of Contract Insight or simply to find out more about what we do, please call John O’Brien at Four Business Solutions on 0800 6250 025.
Four helps small and multi-national organisations enrich the way they work. From supply chain to procurement and contract management, we have decades of experience helping companies forge ahead in the global market.
John O’Brien is the CEO at Four Business Solutions, global business consultants and software integrators providing business processes improvements in Finance, Supply Chain and Operations, across a broad range of industries.