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Generally, contracts begin with a request from a specific individual or department, outlining the needs for the contract. Here are the nine steps to the ideal contract lifecycle. Following these steps reduces the likelihood of a risky contract, prevents important contracts from falling between the cracks, and allows you to optimize your contracts’ performance, improving the overall value of your portfolio. Realizing this value requires implementing nine essential steps into every single contract, no matter how seemingly small or inconsequential they may seem to be. When you see the full picture - all of the steps that go into a complete contract lifecycle - then you can unlock the full value of your contracts. Contract lifecycles go well beyond simply drafting, negotiating and signing a document. To make the right decisions in regard to contract lifecycle management, it’s useful to understand exactly what the contract lifecycle looks like. Instead of spending days or weeks drafting contracts, and then missing out on revenues due to missed milestones – or inadvertently exposing your company to risk with errors, noncompliance, or unmet terms and conditions – you can improve your workflows and bottom-line with CLM. It provides actionable insights at every stage of the contracting process, while also eliminating bottlenecks, improving security and decreasing the potential for errors. Without insight into all of your contracts (which could number in the thousands) it’s virtually impossible to effectively manage every agreement at every stage of the lifecycle, from drafting to execution to post-execution analysis.ĬLM streamlines this process. Contracts are living documents and failing to properly manage them can expose your company to risk and significant losses. And as a business grows, so does the number of contracts that need to be managed.Ĭontract lifecycle management, or CLM, refers to the processes that streamline the creation, oversight and management of contracts. They form the foundation of any enterprise, influencing revenues, expenses, workflows, procurement, and virtually every other operational aspect of the company. Understanding Contract Lifecycle ManagementĮvery business has contracts.
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