An organization largely depends upon contracts. A well-drafted agreement aids significantly in maintaining better commercial relationships. A contract avoids legal disputes and litigations between parties.
In the majority of scenes, many companies prepare and manage contracts manually. This is a discontinued process where parties must move around different applications. There are chances of errors while working manually. This would lead to losing the organization’s time, money, and reputation.
This article will discuss the advantages of contract lifecycle management.
What is Contract Lifecycle Management?
Contract Lifecycle Management (CLM) is a software solution used to manage a contract from the start to the renewal stage. There are different stages in it. The CLM begins when a customer asks for a company’s product or service. It starts from that point and ends after the product is delivered or the receipt has been accepted.
The CLM helps to automate the entire contract management process through various steps. This helps to minimize the time to complete the project.
6 Benefits of Contract Lifecycle Management
Here are the benefits of CLM:
Minimizing the Negotiation Cycle
- Negotiation is an essential part while drawing a contract. This process helps the organization have beneficial terms and set the business deal at their convenience.
- The contract lifecycle management services remove the headache of sending manual documents and have faster negotiation cycles.
- This service helps to send contracts in a secure environment.
- Both parties can work on the contract in a real-time environment, thus saving lots of time.
- This also allows an understanding of the demand and supply properly. So, according to it, the contracts are drawn. The changes can be implemented on a real-time basis.
Faster Contract Execution
- The CLM has facilities for e-signature solutions. This reduces the time and energy to email, print, sign, scan, and mail the contract back.
- The parties can have signing options for the completion of every workflow. This process has gained popularity for the ease of doing business.
- With faster execution, the project can start and be delivered on time.
Data Security
- The CLM provides enhanced data security at each phase of the cycle.
- In advanced CLM processes, user access is protected by two-factor authentication. The company can set passwords and share documents with its clients.
- This protects the contract from a third-party view. The cycle follows data protection regulations. So, making it legal and safe to use.
Reduce Risks and Enhanced Compliance
- Risk is an integral part of any business. So, it is always necessary to have contracts for all business-related work.
- Having a CLM draw out contracts would provide more visibility and control to both parties. This helps to minimize the risk to the maximum extent.
Faster Contract Authoring
- The CLM helps the company build contract templates and oversees language consistency throughout the document.
- Using the pre-approved clauses, any individual without legal knowledge or legal back office support can draft contracts.
- The automatic contract management system provides a real-time environment while reducing human interventions during post-execution.
Contract Renewal Management
- Contract renewal seems easy, but many companies fail to renew it before the due date. This leads to a loss in business and a bad name in the market.
- With CLM, the companies can set automatic reminders that would remind them before the contract expires.
- This would keep the business running. No interruptions in delivering the products or services would happen.
Conclusion
With the increased competition, companies are looking at CLM to automate the contract drawing process. This helps them focus on their business while minimizing the risks of errors or legal issues while drawing the contract. The CLM minimizes the negotiation cycle, reduces risks, improves compliance, quicker contract execution, efficient contract renewal, and faster contract authoring. With so many benefits, companies should adopt CLM in their process. This provides more time and energy to focus on their core business while CLM draws error-free contracts.
Stay in touch to get more updates & news on Discover Tribune!
