A Pramata Article

Contract Lifecycle Management System (CLM):Challenges, Benefits and Implementation

Your complete guide to contract lifecycle management implementation

What’s in this article:

What is a CLM?
CLM Challenges
CLM Benefits

Is your business drowning in contract paperwork or missing renewal deadlines? Or maybe you’re just plain fed up with your current contract lifecycle management (CLM) inefficiencies.

If so, it’s time to upgrade your CLM system.

Modern CLM software is more than fancy technology. It streamlines your contract management operations and enhances staff productivity by eliminating manual tasks. Embracing CLM automation can revolutionize the way you do business by making your contract management more efficient.

Here’s a complete guide to contract lifecycle management implementation and how it can solve common challenges from CLM alternatives.

What is a contract lifecycle management (CLM) system?

A contract lifecycle management system is a digital solution for all contract management-related tasks. It bridges the gap between legal and other departments for efficient contract management.

CLM software provides clearer terms and language agreements for drafting contracts. It streamlines collaboration across legal and teams across your organization to ensure that all contracts align with your business’s best interests.

It can also provide more accurate legal contract compliance. Through automation, it complies with regulations and term agreements by reducing human error risks from manual reporting. This makes contract revisions and approval times smoother.

CLMs efficiently organize your enterprise’s contract data so you can easily reference it at any time. This includes metadata and contract creation templates for a quicker sales process.

With the ability to track and evaluate contract performance data, you can ensure that all terms are being followed. And by accessing this data within seconds, you can assess for needed adjustments before renewal

Contract Lifecycle Management Challenges

There are many challenges in contract lifecycle management, especially if you’re using an inefficient system. From being stuck in old ways of operating to software feature shortcomings, here are some common issues.

Double-entering information in your current CLM system? This is one of the signs your business needs an upgrade. Not only is this less productive, but it also increases business costs when your staff spends more time than necessary on tasks that could easily be automated.

Common manual contract management tasks include:

Reviewing and entering contract data in a CLM system or spreadsheets
Searching and retrieving contract data from multiple locations
Analyzing data and creating reports manually to ensure accuracy
Creating new contracts and workflows from scratch every time
Tracking multiple authors and editing history to find the final version

Manually processing contracts is a sign of inefficiency. It slows productivity with time-consuming searches and long data-filing workflows. It also increases the risks of inaccurate contract data from human error.

Don’t overcomplicate contract management. Let an automated CLM system do the heavy lifting for you.

Have you been missing contract renewal deadlines? CLM systems send automatic renewal alerts so new business opportunities don’t slip through the cracks.

renewal management

If you’re still missing renewals, even with a CLM system, Pramata has your back. We have some of the most accurate and vetted renewal calculations in the industry.

Commercial contracts are a crucial component to drive sales productivity. You should quickly know the details of any contract to negotiate price increases and more before the renewal notification period.

Remember, CFOs often tighten budgets because of costly inefficiencies. The right CLM system can help prevent your project funding from being cut because of efficient contract management.

Did you know contract professionals take more than two hours on average to find contract data? If you aren’t tracking this information, especially with multiple locations like local hard drives and spreadsheets, you’ve got a contract visibility problem.

Common reasons for contract data searches include:

Looking through contracts to prepare for renewals or answer questions from the business
Referencing historic contracts as a template to create new ones
Reevaluating prior terms and conditions for rate increases
Reading legal contract obligations to ensure compliance
Utilizing SLA agreements for negotiation

Finding basic contract information or answering daily requests for sales and finance teams shouldn’t be difficult. The ability to find needed information quickly is especially crucial for new employees or smaller teams.

If your team constantly spends more time trying to answer simple contract questions than doing their jobs, it becomes a domino effect of unproductivity. Time-consuming searches take valuable time away from broader business goals.

Prevent staff burnout with a fully searchable CLM database where everyone can find what they need in a few clicks. No more manually tracking down contract documents and associated metadata because everything is in one place.

If your CLM system isn’t making work easier, it’s time to get a system that gets the job done better.

Signs that your CLM is making contract management harder than it should be include:

Too complicated or lengthy deployments
Costly legacy contract migrations
Unused CLM features that you’re paying for
No contract visibility, causing your staff to ask basic contract questions and for status updates constantly
Inaccurate or not up-to-date contract data from manual processes caused by human error
No integrated CLM tools to manage contract agreements and retrievals in one place
Hours or days spent trying to find and organize contract information

Bottom line: CLM systems should make your job easier, whether you have current software or not. It’s that simple.

Benefits of a CLM system

If the contract lifecycle management challenges mentioned above hit close to home, here’s how modern CLM software can help solve them.

CLM software is a time-saver for related administrative tasks. Through automation, you’re not just finding and filing data. Instead all the information you need is right in front of you. Your CLM system:

Streamlines the process of drafting, reviewing and negotiating contracts and SLAs
Provides access to automated reports for more accurate data and analysis
Finds contract data quickly with advanced search capabilities

It should also make your organization look better. The right system can help you answer questions from customers and key stakeholders more efficiently. Your sales teams can find contract data, evaluate it, and respond more quickly to drive decisions and revenue.

Spend less time stopping what you’re doing to answer contract questions through contract data visibility. Teams all across your business have questions about contracts all the time.

With self-service features for contract inquiries, your team can access this information themselves. This is especially helpful for people in non-legal roles.

Here’s how your company benefits from centralizing contract visibility in one location:

Quickly find and review contracts, including metadata, easily
Get real-time contract status updates and a report of who reviewed them in seconds
Customize contract request forms and templates so you don’t have to create new ones every time
Collaborate across departments seamlessly with centralized contract database access
Protect customer contract confidentiality with role-based access and robust security system measures

Investing in a valuable CLM system increases your staff’s productivity and the bottom line. It streamlines administrative tasks that are typically done manually.

Empowering your employees with the tools they need is essential for successful contract management.

Look up customer contracts and past amendments more easily with a CLM system as your digital source of truth. When your staff can easily find prior agreements, it can improve your contract’s terms for add-on deals because you’re on the same page as your customers.

This streamlines renewals and reduces contract value leakage because you’ll have a reference to structure new ones. An efficient CLM system gives you better transparency into legacy contracts to see if their terms require negotiation.

CFOs often see CLM systems as just “nice to have” software. Not true! CLMs provide much more value for the bottom line by accelerating deals, reducing vendor costs and eliminating revenue leaks.

A solid CLM platform helps by:

Ensuring you capture all contracted revenue by uncovering price uplifts and negotiation opportunities
Helping you avoid unwanted vendor renewals with alerts and reporting and consolidating redundant vendor contracts based on favorable terms.
Identifying how many customers have similar contract terms as the new ones you’re currently working on for add-on deals
Reporting what your contract volume looks like on a weekly, monthly and annual basis to better manage your time and resources
Providing contract templates to keep your sales process moving

It’s imperative to show your CFO the value and ROI of a higher-performing CLM system and how it helps your business drive your team’s revenue more efficiently.

Understanding contract lifecycle management implementation

Implementing a new CLM system can make for an exciting time. That’s why it’s imperative that your business has a clear roadmap throughout the process.

Here’s how to prepare for a CLM software implementation and what to expect from start to finish.

What to do before CLM implementation

Ensure that you have a successful contract lifecycle management implementation by preparing thoroughly. Regardless of whether your team has experience migrating legal tech CLM solutions, these critical details ensure that your organization is ready for a smooth transition.

Get your organization ready for change

Don’t get stuck in the old ways of doing things. The key to a successful CLM implementation is its adoption by the people meant to use it. That’s why your organization (not just your legal team) must be ready for change before implementing a new CLM system.

Get the following early people at your organization on board first:

Sales department leaders
Legal teams
CFOs and finance leaders
Business partners
Key stakeholders
IT managers

Explain how each of these roles will benefit from a CLM system and the ways it will make their jobs easier. Consider how each department will be involved in the initial discussion and final decision-making. Explain the contract visibility and self-service benefits for these positions.

Discuss the challenges each team faces without an efficient contract management solution. This way, you can better showcase the ROI from a new CLM software. It’ll show leaders in your organization how your current contract management process impacts the business, and it’ll encourage them to try something new.

Understand your current contract management system requirements first

Do you know how to migrate to a new CLM software based on your contract process and system requirements? After your organization decides it’s ready for change, you must understand how your current systems will integrate with new CLM software.

Introducing a new solution shouldn’t be a complete overhaul. It should seamlessly integrate with your company’s existing tools. And it should be radically simple.

Here’s what to look for in your contract management system first:

eSign software and CRM system integration capabilities
Your organization’s information security requirements
Assigned IT staff responsible for the technical side of implementation
Additional details of what your business needs before deployment
Existing tools, software, system and CLM processes

If your business doesn’t have a large IT department or members readily available to implement the new system, ensure you choose a CLM that helps with the heavy lifting and offers the additional support you need. Don’t let your legal team become an “engineer” for configuring custom solutions.

Simple contract management has to include simple integration. You shouldn’t have to start from scratch when investing in new CLM software.

Confirm how many possible users need access

While some CLM systems offer unlimited users (like Pramata!), consider who needs access. It’ll give you a more accurate estimate of the number of user licenses you’ll need to estimate pricing before buying.

This step also provides valuable insights into your current workflows. It uncovers who really needs access. By taking an honest look at your organization’s contract management process, you can create a plan that meets your business’s needs for successful implementation.

Create easy-to-use playbooks for your new CLM

Convincing sales and finance departments of the ROI from a new CLM system isn’t always easy. It’s a smart idea to create an onboarding process if you need to get buy-in from stakeholders.

With estimated pricing from user licenses and a transition plan, you can better prove to leadership that a new CLM software will generate more money than it costs.

If you don’t have contract management playbooks and need to start from scratch, here’s how to start:

Reference historic contracts and their patterns
Analyze contract data insights and common trends
Record general negotiation best practices
Document standard and non-standard contract terms across your contract history

With this analysis, you can create resources for current and new employees to reference. Skip the hassle of sifting through thousands of documents to know what your business typically does with its contracts and create these foundational guidelines instead.

Start by migrating your legacy contracts

While CLM systems automate contract data extraction and organization, it’s imperative to include your legacy contracts so your teams can access their valuable information. This way, you can fully benefit from the features a new CLM software offers—and your legal team isn’t stuck being “corporate librarian” after implementation.

Businesses often make the mistake in CLM implementations by only focusing on what it will do in the future and forgetting about historic contracts. Making legacy contract migration an afterthought or an add-on service after deployment could end up costing you more.

What to expect during CLM implementation

Now that you know how to prepare for CLM implementation, here’s what you can expect throughout the process.

Cleans up your current contract storage

The first step of contract lifecycle management implementation is cleaning out all non-contract clutter.

It removes the following unnecessary information for a structured, digital contract repository:

Non-contract files
Duplicate documents
Inactive customers, vendors and other counterparties

The new CLM system also OCRs and converts all uploaded documents to digital PDFs. This way, your new software can understand and tag your contract data efficiently.

cleanse

Pramata makes this cleanse step effortless by doing all the heavy lifting for you. Simply upload all your files, and we take care of the rest.

Organizes your contracts & data

After cleaning unnecessary clutter, the next step during implementation is organizing your contracts more efficiently and intuitively. The CLM extracts key contract terms and dates for accuracy and stores them in a centralized digital system.

For example, Pramata’s CLM system organizes your contracts and data by:

Extracting and tagging core document metadata
Grouping documents by counterparty
Organizing document families and parent/child hierarchies
Determining document statuses
Calculating renewal dates, notification periods and status

You can search for contracts by type and custom filters. With complete contrac visibility, your organization can know where each contract stands and how to find all contracts easily when they’re neatly filed and labeled.

No more contract status updates and mystery documents.

Deploy your new CLM system

The final step of contract lifecycle management implementation is deployment. This last phase gives you one place to access your fully digitized contracts, run reports, create and monitor request and workflows, and more. Finally eliminating those “paper trails”, multiple spreadsheets and lack of centralized visibility.

Contract lifecycle management software comparison: CLM alternatives vs. a radically simple CLM system

While using free CLM alternatives like spreadsheets or cheaper options like dated systems is tempting, it’ll cost your business more in the long run. Or worse, overpaying for a CLM system with more bells and whistles than you’ll ever use or need.

Here are the differences between more manual CLM options and a radically simple CLM system—and why making the switch is worth the investment.

CLM alternatives

Using alternative, manual contract management solutions instead of CLM software makes contract management harder than it needs to be. It shouldn’t be difficult for sales teams to navigate or waste your team’s workday spending hours searching for contract data.

Common issues with manual CLM alternatives include:

Contract data in multiple places
Slower sales processes
Limited contract data visibility across the business
Complicated revamp procedures for migration
No system setup assistance
Higher risk of sales escalations
Prolonged hours of manual contract data review
Increased risk of inaccurate contract data from human error

Dated contract lifecycle management practices can prevent your business from future growth and success. They can also contribute to wasted time and money. Remember, not all CLM systems are created equal. A good one will get the “basics” right and further tailor solution based on your organization’s needs.

Radically simple CLM system

Don’t pay the costs of using dated CLM alternatives when user-friendly CLM software can solve these issues for you. Avoid going through complex or failed CLM implementations.

Using a radically simple CLM system, like Pramata:

Allows for self-service access to the contracts you need when you need them

Prevents sales escalations with end-to-end contract visibility

Accelerates contracts and deals with fewer legal touchpoints

Drives faster sales results without adding headcount

Centralizes cross-team collaboration with contract visibility

Provides access to valuable contract data insights without manual tracking

Gives a user-friendly experience across departments for easy onboarding and more responsive customer success

With a radically simple CLM, all you have to do is upload your documents, and the software does the rest—and with more accurate results. It also migrates your current contracts into the new management system within weeks.

Make the switch to a radically simple CLM system

There’s no need to overcomplicate contract management. If your current CLM system is increasing costs or is just hard to use, these are signs you need to switch to an easier, more reliable solution.

Whether you’re a legal leader or CFO, CLM software is an important investment to consider.

Are you ready for a radically simple solution?

See a demo or try Pramata risk-free to see the benefits for yourself today!

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