Contract lifecycle management is a method that makes it easier to deal with thousands of contracts starting from initiation, compliance, implementation and renewal. The real need of CLM is felt when contract portfolios grow in numbers and it becomes difficult to manage every stage of each of the individual contracts.
Why do we need CLM (Contract Lifecycle Management)
- The methodical use of Contract lifecycle management allows an organisation or commercial entity to cut down on unnecessary errors and initiates automatic contract generation. The use of Artificial Intelligence has also been used to good effect to extract advantages in CLM to reduce errors.
- In the beginning the major task is to focus and integrate all the major contracts in a place that is central and accessible. After this is done the next task is to capture the data. The captured data is tracked and subsequently creation of templates which begins to facilitate and empower business and legal users.
- Approval is a very important step whereby different departments review their respective contracts so that the risk is minimised. Subsequently the negotiator prepares a checklist to find out the nitty-gritty’s about how the present contract is different from the original or last contract.
- Finally the contract is signed and validated. Proper storage of the contract is also a necessary and important security issue.
- The goal of CLM is also optimization and if for example it is found that a particular process takes up unprofitable and unnecessary time, then that particular area may be is pinpointed and modified to get optimum results.
- Throughout the contract people from various departments collaborate with each other for the proper functioning of the systematic method.CLM ensures that these collaborations are smoothly arranged without friction so that transparent exchange may take place. Of course in some case where a lot of regulation is required, some check up like highly controlled audits are carried out.
Anyone will be willing to install this CLM in their business system, so no middleman can create the problem in business dealing. As the name says it is a lifecycle management, so once we can install this system it would give a recurring result against every deal. We could confer responsibilities upon CLM to cut through the competition in market. Time management will be easily captured through CLM that is major reason people want to utilize the benefit of CLM.