There is no denying that contracts are the foundation of any business. This is why you need to have an effective method for managing them properly. In this guide, we are going to take a look contract lifecycle management software in further detail, giving you a better understanding of what this is and how it can benefit your business.
The importance of contracts
Contracts are pivotal because they define a business interaction. Because of this, contracts can also mitigate risk, protect intellectual property, establish security levels, manage suppliers and customers, control procurement costs, and forecast expected revenues. When you take all of this into consideration, it is not difficult to see how contracts play such a massive role at any company. Contract management software, such as the solution provided Symfact, is needed to ensure that contracts are handled efficiently and in accordance with the law too. After all, if contracts are managed poorly or they are not managed at all, they will virtually always underperform. This means that compliance risk and legal risk will increase while costs will increase on the buyer side and profit potential will be diminished too. This is something no company wants to experience, which is why it is pivotal to make sure you have an effective approach in place for dealing with contracts at your company.
Contract lifecycle management
From business to business, and sometimes even department to department within an organisation, there are variations when it comes to the definition of a contract lifecycle. However, the following lifecycle stages are going to be present in some way or another…
- Requesting the contract
- Execution of the contract
- Managing obligations
- Contract renewal
Contract lifecycle management (CLM), therefore, is the process of ensuring that all stages of the contract lifecycle are controlled, coordinated, and streamlined. This gives businesses the power to optimize contract performance, especially when it comes to sales and procurement. The contract lifecycle management software tools that are available for businesses today enable them to improve compliance, accurately forecast revenue, and lower their expenditure.
With contract lifecycle management, terms and conditions in the contracts can reflect the key metrics that will measure customer and supplier performance. If you integrate v with operational platforms, for example, your resource planning tools, then you will be able to bring contract item, customer, and vendor information into accounts receivable and payable systems in a manner that is free of errors, automated, and seamless.
While there is no denying that enhancing contract performance is one of the biggest benefits that is associated with contract lifecycle management. There are other advantages you need to consider too. This includes another huge benefit, which is improved risk management. Despite the fact that contract lifecycle management is not a risk management solution per se, it will boost contract reporting, control, and visibility. This gives both regulatory and legal affairs departments the power to lower risk. Plus, the quality of enterprise knowledge management is going to be improved through centralized pricing controls, a shared legal language, contracting best practices, and the other mainstays of contract lifecycle management.
Contract lifecycle management solutions
Now that you have a better understanding regarding what contract lifecycle management is and why you will benefit from it at your business, it is important to get a better understanding of what contract lifecycle management systems look like. A combination of information technologies are employed with contract lifecycle management. This includes the execution of contracts, as well as capturing intelligence, enterprise content management, approval, and more. Common bottlenecks across the contract lifecycle should be eliminated. Plus organizations should be able to do all of the following thanks to their contract lifecycle management software…
- Decrease risk exposure and maintain compliance
- Shrink ‘maverick’ spending
- Gain a complete view of the contract process and all contracts
- Track buy and sell-side milestones and obligations in an accurate manner
- Minimize attorney dependency and review time
- Lower contract cycle time
- Capture savings and optimize renewals
- Generate more profitable agreements
As you can see, there are many benefits that are associated with contract lifecycle management systems, and there are, therefore, many reasons why this is the sort of software that you should be deploying at your business. However, you do need to take the time to consider your options so that you end up with something that is going to give you all of the benefits that have been mentioned above. Luckily, you don’t need to search far, as Symfact ticks all of the boxes.