8 ways a CLM platform helps secure your contract process
Leave risky business to a young Tom Cruise. In real life, taking the shades off and seeing business deals clearly with contract management software means you can meet increasing demands without letting things fall through the cracks. A contract lifecycle management (CLM) platform standardizes the contract process online for optimized risk management and compliance—so every contract is secure from start to finish.
PricewaterhouseCoopers found that 12% of an organization’s total annual costs are spent on the manual part of contract management. Higher costs are also more likely down the road if a compliance issue or terms dispute leads to court. Add to that the very scary fact that 10% of contracts are lost or go missing (Faulkner Information Services).
There’s hope: Contract management software is built to make you more efficient while tightening up your sensitive documents. Well-executed contract management through a digital platform can hugely increase revenue, reduce cost, and automate compliance, all while shortening legal contract review time by 80-90% (Forrester).
With a CLM software, you can get the correct information to the right person at the right time—with everything filed, stored, and found in a safe and central cloud-based repository. The technology-driven contract management process ensures audit trails and version control, so having more contracts doesn’t lead to more confusion or costly errors.
8 ways to reduce risk with CLM software:
As global regulations increase, an audit—or risk assessment—is a necessary step in due diligence. Contract management software not only makes performing a successful contract audit easier, it makes implementing changes and enforcing them easier, empowering an organization with faster processes and the flawless compliance that accelerates growth.
With a CLM software, you can use templates to create a contract with the click of a button and know all the necessary components are included. Online negotiation eliminates version control issues, as parties never have to download and re-email a document; and all edits, redlines, and changes are tracked. Approval workflows automatically loop in Legal when necessary—no chasing, no waiting. As changes are made to accommodate terms, sweeten deals, and move negotiations along, greater visibility accelerates the process:
1) Stakeholders are aware of these changes as they are being made, regardless of who’s making them.
2) Legal is looped in to ensure terms and conditions are optimal, products are received on time, and there’s no risk or liability deemed unreasonable.
A well-managed contract portfolio can control expenses, and protect revenue, stopping financial leakage that can hurt profitability and expose the organization to litigation, failed counterparties, and compliance violations. A CLM platform’s approval workflows help automate compliance, and renewal alerts keep you up-to-date. Run reports with an insights dashboard to create a more thorough and complete picture of the business. With this added perspective, you’re better able to gain new insights, leverage future opportunities, further enhance efficiency, and become more strategic.
Identify which areas to improve and effectively weigh various aspects of contract risk. When an audit is performed and an analysis is complete, it’s the perfect time to assess the full-lifetime value of a contract, prioritize supplier/customer relationships and commitments accordingly, and identify areas that can be automated. Tagging and categorizing contracts according to best practices enables you to target contracts close to renegotiation, such as ones that might prevent you from growing profitably, and identify contracts that are more attractive because they contain repricing opportunities (savings), or previously undiscovered opportunities for growth.
Applying risk mitigation by avoidance, elimination, transfer, or bearing the risk often involves the creation or modification of contract clauses. Having pre-approved clauses is a key factor for the successful contract risk management of any company. Placing clauses at the template level ensures the appropriate and necessary clauses are always included, regardless of who creates a contract.
Along these same lines, monitor changes to the law and create risk management processes and procedures to protect information, especially when contracting with vendors. Identify minimum security protocols and standards for vendors, and apply them during the vendor selection and contracting process. This includes protocols for cybersecurity, where regulations and best-practices are constantly maturing. By automating processes—through templates, approval workflows, and more—CLM software enables organization-wide agility to changing terms, business climates, and market conditions.
Many companies, with the advent of SaaS, are beginning to look to the Cloud to help manage and store their contracts. Well-managed contracts can ensure that financial and operational risk is minimized while performance is maximized—increasing process efficiency, reducing costs, and improving visibility. With centralized contract management processes, putting all people, processes, and contracts in one place—and the aforementioned capabilities (workflows, templates, online negotiation, organization), CLM platforms take the unknown out.
The quickest way to neutralize a situation is by creating trust and security. Contract management platforms enable collaboration through ease of online, in-document editing and negotiation.The software ensures all parties see and accept the clauses and terms of the contract in real-time, so that everyone agrees to an acceptable, realistic amount of risk up front, while accelerating Procurement cycles, deals, and forming strategic relationships that pay dividends—in first access—to goods and preferred pricing.
8. Eliminate Risk Across Teams
When a CLM platform’s intuitive capabilities are integrated into all processes, contract managers can eliminate risk with the push of a button. Templates can be updated and then refreshed, updating fresh data in seconds, which ensures that everyone who’s using that template to create contracts is compliant.
You can create checkpoints and build them in as approval workflows within your contract processes. Tailor these steps based on existing workflows or types of contracts. A CLM software’s modern tools make contracts and contract management simpler, faster, and easier for everyone involved across departments.
Founded in 2014 and headquartered in San Francisco, Concord enables over 200,000 companies around the globe to connect all their people, processes, and contracts in one place. Built with intuitive features—like online negotiation and editing, deadline alerts, and approval workflows, Concord gives users everything they need for the entire contract lifecycle, making growth and compliance synonymous.