Contracts play a central role in any business’s success. A diligently drafted agreement can ease the process of selling and buying whereas a half-heartedly designed raw contract can cost a company its reputation, financial losses, and more.
Companies, therefore, are becoming cautious about developing error-free contracts to reduce the risks associated with poorly drafted agreements. Even though many companies are enthusiastic about bringing technology into Contract Lifecycle Management (CLM), others are unsure or skeptical. Added to this dilemma is the fact technology alone doesn’t guarantee contracting success, having a strong and robust CLM process is equally significant.
In this blog, let us discover the importance of rethinking your contracting processes, embracing technology, and integrating the latest features to sharpen the potential of the CLM software.
What Is a CLM Solution?
A CLM solution is a software application that automates and streamlines all the stages of the contracting process. In simple words, it basically serves the purpose of drafting contracts that safeguard and secure the interests of firms.
Enterprises not only use CLM solutions to create contracts but also to maintain relationships with their customers, partners, suppliers, and workforce. However, as per a World Commerce and Contracting report, less than 11% of the organizations consider their contracting process as “very effective” – leaving a big scope for improvement.
So, the question is – how to fill this gap?
For an effective contracting experience, it is not all about adopting technologies but also about rethinking and remodeling your contracting approach.
Rethinking the Contract Management Model
Before diving head-first to buy a new technology that promises 360-degree transformation, first look at the existing challenges of your contracting processes.
Answer a few burning questions.
The answers will lay bare the gaps that are hindering a smooth data flow across the contract lifecycle.
CLM software can help enterprises gain efficiency at the document level but to improve the overall quality of contracts, you need to provide an ecosystem where different stakeholders can come together, collaborate, review the terms, and share their feedback.
Smart CLM software enables organizations to create an ecosystem through a single platform where different teams can collaborate and exchange ideas, evaluate terms, and enhance contracts. It empowers and mobilizes the participants to enthusiastically pitch in on key business initiatives and opportunities. A single platform providing cross-departmental participation makes contracts an effective human process rather than being a static document.
The benefits of this approach clubbed with a smart CLM solution can be impressive in terms of the impact on agreements. Some are listed here:
- The ease of exchanging ideas and reviewing terms is simple and quick.
- Seeking feedback from legal, HR, Sales, IT, Procurement, and other departments is swift.
- Elimination of data silos, inefficiency, complexity, risks, and frictions is real.
- Transparency throughout the stages of a contract lifecycle management.
- The involvement of critical & knowledgeable people on the team lessens the odds of poorly designed documents.
- Smooth relationship with customers because of the frictionless negotiations around pricing and statements of work.
Other advantages include short contracting cycles, improvements in win rates, real-time visibility at all stages of the CLM, compliance, smooth execution, and more.
Apart from the remodeling of the contracting model, some companies are also keeping an eye on the technologies that are transforming the CLM scope.
Key Technologies That Can Define the Future of Contract Management
The future of CLM solutions looks promising with the development of key technologies like:
Internet of Things (IoT)
IoT offers a technological advantage when it comes to regularly providing data that can be used to measure contract performance.
Artificial Intelligence (AI) & Machine Learning (ML)
The principles and algorithms used in AI & ML technologies can make sense of huge datasets and improve Contract Data Management.
Analytics and visualization of contract insights will play a huge role in determining the potential of contracts.
Smart contracts, when merged with technologies like IoT, will automate all the elements of an agreement and boost the efficacy of the entire process.
Robotic Process Automation (RPA)
The introduction of RPA along with other standards in contracting can unlock the full potential of an agreement and overcome the challenges of incomplete contracts.
Application Programming Interfaces (APIs)
APIs can help in the smooth flow of data locked in contracts and create a knowledgeable impact.
Enterprises of all sizes – small, medium, or large – recognize the importance of crafting, negotiating, and signing a clear and fully developed contract devoid of ambiguous language, clauses, and other pitfalls. For this, CLM software is playing a crucial role. So much so that it is leading to the automation of the entire process, improving decision-making abilities, resulting in significant cost savings, reducing risks, and more. To support this argument, the global market size of CLM software is expected to reach $3.47 Billion by 2030.
With present-day systems, companies can change the way they have been crafting business agreements and convert them into a collaborative, smart, and swift process, with benefits for all concerned.
Forsys, a Conga strategic partner, is experienced in seamlessly implementing CLM software without disrupting daily operations and in providing additional support ranging from assessment to managed services. For more information, talk to our experts.