The life of a contract is rough. The journey from written to signed can take months. And it will take a few detours before getting there. Changing hands, being torn up and born anew - again and again.
Often, the contract will then disappear in a dark closet or the cobweb-covered corner of some cloud storage. Never to be seen again.
Instead, having an excellent contract lifecycle management system in place is hugely beneficial for any company. Contracts are at the core of so many fundamental parts of business. They help prevent disputes and reduce legal risk as well as outline where a company’s revenue originates - and how.
However, most businesses fail to harness the potential of contracts. They fail because they don’t manage the entire lifecycle of their legal documents. By caring for and working with contract lifecycles, contracts become assets to a firm. Once seen as assets, contracts can be leveraged to generate greater value.
Managing contracts and their entire lifecycle will make a huge difference. At the human level and on the bottom line.
What is contract lifecycle management?
Contract lifecycle management is simple at its core. It is about handling every step of the life of a contract.
A contract starts life as a draft and goes through a number of amendments under a collaborative effort from all parties involved in negotiations. It is then finally reviewed, agreed and signed. When signed, a contract is then filed away as well as being followed in accordance with the contract’s contents.
These steps are the lifecycle of a contract.
Contract lifecycle management is the overseeing of that process which gets a contract to the signed stage - and beyond. Without management of the lifecycle of a contract, errors and delays can be easily made in a contract’s creation and completion.
And every error and delay is expensive.
Conversely, effective contract lifecycle management allows individuals to work smarter. Implementing all-in-one contract lifecycle management software allows for automation which helps mitigate legal risks.
Reasons why contract lifecycle management is needed
As mentioned before, most businesses do not handle contracts well. This leads to uncertainty, missed deadlines and a complete lack of overview.
Oversight of a contract’s lifecycle handles any issues as they appear - and provides a wider peace of mind for all involved. Plus, when done effectively, contract lifecycle management can be used to enhance and leverage contracts to be more than just a legal backstop in disputes.
Instead, creating and completing contracts in a proactive and productive manner can provide firms with many advantages. In fact, employing the use of software like ours at Contractbook offers the following benefits:
A significant advantage to using technology like ours is the vastly improved efficiency that comes from using it. Digital signatures are utilised, negotiations are moved online and individuals are automatically kept abreast of what is required from them throughout the process. A vast amount of time is saved as a result on many individuals' part, improving productivity on both the contract at hand and on other tasks.
Thanks to the vastly reduced time it takes for a contract’s lifecycle to be completed, the costs surrounding each contract are much reduced too. That is money that can go straight back into a business to drive growth and efficiencies elsewhere.
Templates, secure storage and automation all work together to ensure that a company’s compliance is of the highest standard. Plus, it makes it far easier to achieve too.
Using Contractbook’s software makes a company look forward thinking and modern. Plus the simplification of the process makes the procedure painless for all parties involved. Companies appear far more professional and competent as a result.
Improves data protection
Storing contracts in a secure cloud storage location can help improve data security. Keeping data secure is essential as it is a legal requirement by every firm that must adhere to the GDPR.
Streamlines your data flow
Having everything you need in a simple flow makes it easy to leverage the data inside your contracts. You can achieve fully automated onboarding flows and have always updated data on your company, your contracts and your colleagues.
When all of these advantages are combined, it results in companies being able to generate real value. That value comes from optimising the management of contracts to their full potential. By saving time, improving compliance and making a company look forward-thinking, efficient contract lifecycle management becomes so much more than getting a document signed.
Contractbook’s 5 steps of CLM and our contract lifecycle management software
Contractbook believes there are five steps within contract lifecycle management. They are all integrated seamlessly in our software to help you optimise each and every one of the contracts you need.
Our technology helps you write a contract in draft format of your own design. You can do so using our flexible editor or our automated contract drafter. Or, you can use a template from our extensive library. Templates are useful to help save you time as well as give you confidence that a contract will be a legally reliable one.
One of the biggest obstacles to overcome when completing a contract is how cumbersome an administrative exercise it is. So often, this is purely down to the amount of people and teams involved.
In our software, draft contracts can be easily shared with fellow workers as well as outside parties - such as the signatory or the signatory’s legal representatives. In doing so, there is one central document from which everyone works. Furthermore, any comments or amendments made will be recorded. Having your work reviewed by team members is easier as a result as well as more efficient. All negotiations can be made when the draft contract is shared too.
In short, the collaboration phase helps capture all necessary parties’ input to help finalise the end contract.
In the past, getting hard copy signatures on contracts was one of the reasons completing them took such a long time. By including the signing stage within Contractbook’s contract lifecycle management software, signatures are digitised making the process that much quicker. Without contract lifecycle management technology, individuals often have to print or scan or mail contracts to help complete them.
Signing documents in this way is safe too thanks to the inclusion of two factor signatures. Additionally, having digitised signatures can also help you in the future if there are any disputes with the contract due to the inclusion of time and location stamps.
Once completed, contracts so often get filed somewhere never to be seen again unless an issue arises. Yet, if they are properly organised and filed, like Contractbook’s software allows, contracts can be easily found so that they can be continually updated and used from cloud storage.
Using cloud storage importantly makes them accessible from anywhere - as well as far easier to find. Additionally, storing them within Contractbook’s software makes issues such as GDPR compliance far easier given that contracts will include personal data. Furthermore, you can quickly pull data from several contracts and use it to run analysis. Such analysis could prove to highlight areas of weakness amongst other helpful statistics to improve your contracts in future.
After the signature and organisation stage, there is still work that can be done from a contract. The execute stage in Contractbook’s software helps allocate tasks to employees to ensure that contracts are used as effectively as possible. Generating a view of all the tasks that should be completed post the completion of a contract also lets all parties know where they stand and what is required from them.
CLM: contract lifecycle management key takeaways
Managing a contract through every one of its stages is key to getting the best contract possible for both you and all other parties involved. The efficiencies generated by software like Contractbook’s helps foster better relationships between all parties as the process is simplified helping to minimise any unnecessary delay or frustrations.
For that reason, as well as the other advantages listed above, improving all aspects of a contract’s lifecycle and its management cannot be underestimated.