how can AI be used in CLM?we'd love to tell you!
As we’ve told you in a previous article, many companies think it’s challenging to manage and update all their contracts efficiently. COVID-19 has highlighted the importance of a strong contract lifecycle management process even further, because many companies had to start looking for a way to sign and update their contracts digitally all of a sudden.
If you want to know how to start setting up a strong contract lifecycle management process, download our checklist!
Start by thinking about which aspects of your contract lifecycle management could be improved, and how that would be beneficial for your company. You’ll probably think of a few examples, such as digitally signing and maintaining contracts, automatically renewing or archiving important documents … But maybe you’ll also think of sustainability: managing your contracts online means less waste.
Whichever advantage is the most important for your company, we believe that every corporation can benefit from a strong contract lifecycle management, and we are happy to tell you what CLM can do for you.
an analysis for randstad.
We made an analysis for our mother company, Randstad, to define the advantages they could get from a strong contract lifecycle management process. We soon discerned quite a few internal advantages, but we also noticed that it could be beneficial for clients, suppliers, employees …
Keep an eye on our blog page to discover more about this project!
what advantages have we seen in practice?
Direct advantages are advantages for the primary parties in the contract process, that go through the entire lifecycle.
Today, most contract negotiations and next steps are shared exclusively on paper or shareable documents (Word, Google Docs …), without further integration. Setting up a contract lifecycle management process does not only mean a more efficient management of the contracts, but also:
- A quicker time-to-market of the entire cycle.
- A simpler process. Today, the focus is mainly on the electronic signage of the contracts, but there are more opportunities within contract lifecycle management. Think of negotiation and renewal.
- Sustainability: many clients define a sustainability clause in their strategic goals, and try to evolve to a paperless way of working. A strong contract lifecycle management process helps prevent paper waste.
the sales department.
A strong contract lifecycle management is also crucial in the sales department. The most important advantages of CLM in these departments are:
- Speeding up the sales process. The faster this process, the smaller the chance that the client changes their mind. This is called sales momentum valorization.
- Restriction of the administrative work.
- Efficiency: this is the ultimate goal of the commercial departments. A higher efficiency translates into speed, quality, operational client binding …
the parties directly involved in the contract lifecycle.
Think of: the legal department, finance, cost control … These parties are more often than not considered a burden in contract negotiations, but they’re definitely necessary. A strong contract lifecycle management process ensures:
- Standardized processes and ways of working, restricting the workload. Not every contract has to be unique, standardization is a real lifesaver.
- Avoiding repetitive work.
- Correct (legal) conservation of the contract information. In many companies, contracts are lost, they expire without anyone noticing … This puts the company in a weak position.
- Compliance with the internal rules. This can mean quality, working conditions, certification … Often, companies sign contracts that are not compliant with the internal working and safety regulations. If something goes wrong, the impact is disastrous.
Apart from the direct advantages, a strong CLM also entails some indirect advantages. We have defined the following advantages based on our own experience:
- CLM allows you to have control over the sales and contracting process, without intruding on the daily operations. The more standardization, the more control you have.
- Helping to realize the strategic sustainability goals within the company, but also within the larger ecosystem with clients, suppliers and third parties.
- Thanks to CLM, you’ll gain insights in the metadata of your contracts. This facilitates the further follow-up and improvement of your processes. Think of billing, in which the contractual agreements often don’t comply with the real data. This can happen for the payment conditions (mostly with a limited impact), but also for prices and reductions.
In client service, we mostly notice a maximization of the client relations and the customer journey: thanks to a strong CLM, you don’t have to put so much time and effort into your administration, which means you can focus more on what really matters to the client.
- A strong CLM creates a culture of trust and co-creation to improve the shared business goals.
- Client retention: the client enjoys the simplicity and efficiency that they may not get from the competition.
- Strong standardization facilitates reporting and dashboarding.
- Thanks to CLM, many companies dispose of a legal and completely traceable digital archive that complies with the latest legal and economic requirements. This is a great advantage in the settlement of disputes.
- Because of the standardization of annex documents (NDA, sales conditions …), companies can avoid the impact of contract negotiations on the legal department and save a lot of time.
risk and compliance.
- Contracts are inherent to risk assessment and follow-up. By creating an integrated contract lifecycle process, the risk and compliance (rules, licences, controls) aspects become a full-fledged part of the standards, and it’s possible to organize a proactive follow-up using the metadata. Without a thorough solution, too much time is put into figuring out the data and not into working on the factors that have a real impact.
seeing results in your own company?
Would you also like to see how beneficial a strong contract lifecycle management would be for your company? Don’t hesitate to contact firstname.lastname@example.org, who would be happy to discuss this topic with you!