As your business grows, it becomes more important to have a system to manage your contracts. Contracts are the lifeblood of any business, and they outline the terms and conditions of transactions, establish relationships between companies, and protect against legal issues. That’s why every business needs an effective contract lifecycle management (CLM) system. Below, we’ll discuss the 14 key reasons your growing business needs an effective CLM system.
Eliminate Human Error
Human error is a significant cause of data breaches in many organizations. Employees share company devices with family members without realizing the risk of classified data getting to the wrong hands and putting a lot of upcoming contracts in jeopardy. Leading CLM solutions, like SpotDraft, help reduce the likelihood of human error by automating contract-related processes.
Reduce Time to Market
Implementing a CLM system is crucial for reducing time-to-market (TTM) for your products or services. By centrally managing contracts and their associated terms and conditions, CLM systems help you avoid the need to renegotiate or recreate contracts every time a new product or service is launched.
Improved Customer Service
When customers purchase a product or service from your company, they do so with the understanding that they will receive certain things in return. Your ability to meet these customer expectations is mainly dependent on the quality of your contracts. With a CLM system in place, you can be sure that your contracts are well-organized and up to date, which will help you provide better customer service overall.
Minimized Legal Tussles
To comply with government regulations and industry standards, your company must protect any confidential or sensitive data related to its contracts. Managing contracts manually can make it difficult to protect all crucial data and keep every player covered. However, using an effective CLM system can help minimize legal tussles by keeping data safe and secure, so you don’t have to worry about the legal issues that come with the leaking of contractual data.
Improved Visibility and Tracking
When you have a contract lifecycle management system, every employee in your company will be able to see the status of every contract. This level of transparency is crucial for ensuring that everyone is on the same page and working towards the common goal of fulfilling the terms of the contracts.
With a good CLM system, you can easily personify contracts. This means you can give contracts names and assign them to specific team members responsible for executing the contract according to plan. This helps businesses track who is responsible for what and makes it easier to identify potential bottlenecks in the process.
Contract lifecycle management systems also help businesses mitigate risks by providing a framework for managing risk throughout the entire contracting process. This includes everything from identifying potential risks early on to developing mitigation plans to tracking performance against those plans. Some of the common risks you’re likely to encounter in the contracting process include:
- Scope creep
- Budget overruns
- Delivery delays
- Legal and regulatory compliance risks
A CLM system offers a central solution to all or most of these risks, leaving you with enough time to manage other pressing issues in your business.
Timely Delivery of Goods and Services
CLM systems help streamline the contract management process so that all parties involved can deliver goods and services on time. This is possible because all the relevant information about a particular contract is stored in one place, making it easier to track the progress of each contract and ensure that everyone is on schedule.
Eliminate Contract Chaos
As businesses grow, they often find themselves with a contract management system in disarray. This can be caused by several factors, including manual processes, lack of standardization, and insufficient oversight. A good CLM system will help to eliminate contract chaos and provide greater visibility and control over the contracting process.
Increased Efficiency and Productivity
Ultimately, an effective CLM system can help businesses increase efficiency and productivity in several ways, including automating key contract management processes, such as document generation, approvals, and renewals. Additionally, a good CLM system will provide users with a central repository for all contract-related information, making it easy to find and track specific contracts.
Reduced Contract Costs
In addition to improving efficiency and productivity, a good CLM system can also help businesses reduce costs associated with contract management. For example, businesses can save time and money on outside legal services by automating the generation of contract documents. Businesses also won’t have to spend on constant data breach monitoring since all information will be stored securely in the cloud.
Easy Integration with other Software
A standard CLM system should easily integrate with other software that your business uses, such as your Customer Relationship Management (CRM) system. When picking one for your business, ensure you settle for one that integrates with most of your business automation tools. This will allow for a more seamless workflow and eliminate duplicate data entry.
Improved Interdepartmental Collaboration
A good CLM system will improve collaboration between different departments within your company and between your company and its partners. By having everyone on the same page regarding contractual obligations, you can avoid any misunderstandings or missed deadlines.
Faster Contract Creation and Execution
With a CLM system in place, contracts can be created and executed much faster than done manually. This is because all of the necessary information is readily available in the system, and there is no need for multiple people to track down different bits of information.
Swift and Favorable Contract Renewal
When it comes time to renew a contract, a CLM system can make the process much smoother. The system sends an automated reminder to the legal team or contract owner about the renewal dates to quickly review and update the contract as needed. This can help to ensure that your company always has favorable terms in its new contracts without having to start all over again.
A CLM system is an essential piece of software for any growing business. It can save time and money while also ensuring that all contracts are handled consistently and organized. If you doubt whether to use a CLM system, these 14 CLM benefits should convince you that it’s the right choice for your growing business.