Everything You Need To Know About Contract Lifecycle Management by@priya11
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Everything You Need To Know About Contract Lifecycle Management

by Priya KumariAugust 10th, 2022
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According to Gartner, as many as 64% of customer service leaders would be interested in accentuating their business revenue models in 2022 of which CLM will play a pivotal role.
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Contract lifecycle management (CLM) is a software-defined, cloud-based project and regulatory management solution that helps you manage contracts while they are in process. It also provides automated and intelligent tracking of information associated with pending contracts and end-of-life contracts, as well as helps you capture contact details for reference. The CLM solution supports all types of contract administration including sourcing, procurement, and legal services-related contracts.

Integrating contract lifecycle management with a provider account management system enables stakeholders to manage their contracts, connect customers to contract processes, and make decisions using the information in the cloud. Contract lifecycle management also helps organizations organize contracts across multiple versions and versions of contracts, as well as through distance learning or global collaborative alliances (GCA).

According to Gartner, as many as 64% of customer service leaders would be interested in accentuating their business revenue models in 2022 of which CLM will play a pivotal role. Gartner also defines, customer lifecycle management solutions as follows:

“Contract life cycle management (CLM) denotes a solution and processes for managing the life cycles of contracts and agreements created and/or administered by, or affecting, an organization. These include third-party or internal contract agreements, such as outsourcing, procurement, sales, nondisclosure, intellectual property (IP), leasing, facilities management, employment, and other licensing, plus any other agreements or contractual documents containing obligations that affect the organization now and/or in the future. CLM spans all processes associated with the life cycle of each contractual agreement, from initial request through contract discovery, authoring, redlining and negotiation, valuation, approval, execution, order tracking/matching, compliance/obligation management, amendments, dispute management, auditing, reporting, and fine-tuning to eventual archiving.”

Request for Proposals (RFPs), Request for Offers (RFOs), and other contract lifecycle management processes rely on contracts. Contracts govern the relationships between buyers and sellers and ensure that terms are fulfilled by each party.

In this blog post, we will discuss the 5 W's of contract lifecycle management, what problem it solves and why is it a must-have strategy for enterprises. So, without further ado let’s delve right into the details.

The 5 W’s of Customer Lifecycle Management

The customer lifecycle management process helps employees get the inside scoop on your customers and their product experiences. From understanding who they are and how to get them to buy to developing effective product strategies and creating innovative marketing campaigns, this process is absolutely indispensable to optimizing the entire customer experience.

The customer lifecycle management model helps manage customers' needs throughout their entire buying cycles and beyond often resulting in a successful purchase of your product or service, and repeat purchases. This model ensures that you are aware of the ever-changing expectations of your customers and take timely actions so that you seamlessly optimize customers’ experiences, and enter into long-term and fruitful business relationships with them. Let’s have a look at the 5 W’s that lie at the core of this promising model:

  1. What? (A Contact Lifecycle Management Mechanism Becomes Indispensable For Every Contact)

Today’s organizations are expected to be hyper-efficient. Enterprise Contract Management (ECM) builds upon the burgeoning contract market and takes advantage of the cloud and mobile, by providing a single view across all contracts for better analytics and efficiencies.

When it comes to customer lifecycle management, there are 3 main benefits that companies can expect. These are acceleration, protection, and optimization. Acceleration is the benefit of having a system in place that allows product teams to turn around and complete processes quickly.

Protection is having a platform in place that gives you insight into the customer’s needs and company goals so you can execute accordingly. With automation at hand and these two benefits, there’s also an opportunity for companies to optimize customer accounts so they can provide the most value at each stage.

For example, by using contract management, you can put all your contracts into a single platform, which makes everything more accessible. You can do this by putting together a contract repository and assigning a contract manager and team to manage it. This way, all of your contracts become part of one cohesive system and are accessible to employees across departments through the same tool.

  1. Why? (It Bolsters Your Revenue)

CLM is the heart of any enterprise contract management program, transforming existing processes and systems into one that allows you to access your contract data easily and more efficiently than ever before.

This will enable your business to make better use of its time and resources, deliver winning customer experiences faster via automated analytics, get pricing advice in real-time, find new customers more quickly, improve financial performance by better targeting invoice discounting opportunities, reduce operational risk with smarter routing, improve ROI by proactively identifying opportunities for savings both immediately and in the forecast.

For example, legal operations teams can accelerate their contract management process by using a rules-based system that automatically gathers and searches the data they need. They are able to proactively manage their risk profile and train agents on best practices, with consistency in contract performance evaluations. With improved transparency, legal professionals can also use their business intelligence (BI) tools to better serve internal clients by increasing visibility into contracts’ performance metrics in line with desired outcomes.

  1. When? (Right Now and in Future As Well)

Contract management software is advancing to the point that legal departments—especially those responsible for managing thousands of contracts—can now use it in a way that makes sense for them.

For example, if you're a lawyer or legal personnel who manages contracts, you must care not just about the present but must also have a futuristic outlook. The next five or ten years will determine how successful your organization will be—and that means investing in contract management software now (and in the future).

  1. Where? (Right Here; Almost Omnipresent Within Enterprises)

Now, the contract is everywhere. It is in a company’s repository and anyone with proper permissions can see it. With enterprise contract management, anyone with a copy can view it and make changes to it.

This opens up different channels of communication and transparency that allows for better collaboration between departments or divisions within the company. For example, Vertiv, a global technology manufacturer, has driven a successful deployment of enterprise contract management and now enjoys instant visibility into all of its contracts, even those executed overseas.

Prior to implementing an enterprise contract management system, agreements were scattered across the globe, with paper agreements locked in physical file cabinets or on the desktops of its employees. The company underwent a successful transition from a decentralized paper system to a global, searchable central repository so teams everywhere can quickly review purchasing contracts and other agreements and compare them to make sure the company is getting the best terms.

Vertiv, a leading manufacturer of specialty industrial automation and control systems, is transforming how it manages its contracts. The company has recently deployed Enterprise Contract Management to gain insight into all of its agreements, which are now anywhere in the world. And it's working: Vertiv says it can instantly verify the terms for all its business deals, even those conducted overseas. The transition from paper to digital files was accompanied by a searchable central database that makes it easy for teams everywhere to review contracts and miscellaneous agreements, thereby securing the best policies simultaneously.

  1. Who? (Remember, it always starts with “You”: Not “You” the Individual But “You” the Enterprise)

Each piece of the CLM puzzle has a role to play. But if you only choose one, choosing a CLM vendor that is tailored specifically to your role risks losing competitive advantage by being unable to participate in emerging market opportunities or onsite/off-site hosting.

Contract management is a critical element of the work you do. But how can it be most effectively done in your organization? By focusing on the Five W's of Customer Lifecycle Management, you are ensuring that your contracts are managed in light of today's business priorities rather than as an afterthought or byzantine series of manual processes. Contract management processes needn't be inclined or biased toward a specific department, rather should be designed by legal professionals to fit into a holistic concept enterprise solution.

In Conclusion

Customer Lifecycle Management (CLM) is a well-defined and thorough process that helps you understand your customers along the entire path of their journey. This helps you better understand how they see your brand, services, and products and then design a strategy that influences both loyal and new customers' perceptions of your brand. The CLM industry is moving fast, and it's important to stay on top of developments. To keep abreast with the dynamism of the CML industry, firms must choose enterprise software and service vendors who enable full-service management for suite to suffice your contract management system requirements such as contracts in-transit processes, compliance monitoring & reporting, and advanced analytics.