The Future of Contract Lifecycle Management
Contracts are an essential part of the business world but they present significant operational and financial challenges. Effective Contract Lifecycle Management reduces the risk of litigation and ensures compliance with obligations while enhancing opportunities for the company.
Traditional contract tools have attempted to bring the analogue process of contracting into the digital era but their capabilities are limited. New contract management solutions have been built to address these limitations.
1. Automation
Contracts are fundamental to commerce. They ensure payment and fulfillment, allowing businesses to expand and grow. But they’re often lengthy and complicated, leading to high levels of manual work and the potential for errors. In order to streamline and minimize the time and effort needed for managing contracts, companies have turned to automation.
During the 2000s, contract tools began to emerge that were based on integrated automation. These solutions monitored contracts in-flight, tracking changes, storing files, and integrating with eSignature tools. However, these tools weren’t general-purpose business systems, and they were expensive to purchase and implement.
Then, in the 2010s, Software-as-a-Service (SaaS) models made it possible to buy these tools for a fraction of their original cost and to pay a subscription fee to access ongoing product development and support. These digital, centralized contract management platforms were called Contract Lifecycle Management CLM.
Today, AI is making these systems even more powerful. AI-powered systems can help create and draft contracts, automatically parse existing documents, and identify key terms and clauses in seconds. These systems can also automate workflows and notify stakeholders when important deadlines are approaching. This is transforming contract management from a system of record to one that’s live and intelligent. To learn more, schedule a demo with Icertis, the leader in intelligent Contract Lifecycle Management. We can show you how your business can use intelligent contract automation to optimize your business processes and achieve higher productivity.
2. Collaboration
Contracts often require collaboration among teams within a company to negotiate and agree upon their terms. A good CLM solution streamlines these processes and ensures everyone involved is working on the same version of the contract. This helps prevent mistakes that can result in penalties, lost revenue, or worse, diminished customer trust and brand reputation.
Until recently, most CLM tools were standalone products. They were either expensive and highly customized or inexpensive and limited in capability. The former required months, if not years, to implement and were difficult to maintain and update. The latter were easy to implement but could only handle a small slice of the contracting process.
The best-of-breed CLM solutions now integrate with business apps like CRM, ERP, and sourcing. These integrations help the team members most invested in contract management collaborate efficiently. For example, a CRM-integrated CLM tool allows sales departments to track prospect information and auto-populate it into contracts. This can make the process much faster and more efficient and significantly reduce legal operating expenses.
These integrated solutions are enabling businesses to better organize and track important contracting processes like performance measures, renewals, and special clauses. They also allow users to stay up-to-date on contracts and avoid penalties, lost revenue, and diminished customer trust. As a result, they can increase their competitive advantage in the marketplace.
3. Analytics
CLM systems can collect, store and process data at unprecedented rates. This data is useful for companies in a variety of ways, including identifying opportunities for cost savings, enhancing contract negotiations, and improving overall productivity.
AI is able to automate many contract management tasks and processes that were once manual and error-prone. This frees up human team members to perform more important and creative work, such as analyzing the data collected by AI and determining how to best utilize that information in future contracts.
However, it’s critical to remember that AI cannot operate autonomously. It must be guided, fine-tuned, and monitored in order to function effectively. The goal is to provide the best possible results and save teams time and energy, not replace them.
Contract management tools with AI capabilities can help companies achieve these goals by transforming raw contract data into structured document papers that are ready to be reviewed, negotiated, and signed. These systems can also automatically check for errors, highlight any issues that need to be addressed, and ensure that each contract goes through the same process every time.
The use of these new technologies will continues to drive growths in the contract management markets. As the business softwares landscapes becomes increasingly complex smart contracts platforms will continues to grow in popularity as a ways of streamlining processes and improvings efficiency across all departments.
4. Security
Contracts are one of the most vital elements of commerce, collaboration, human cooperation and society. It’s no surprise that they can be complex documents to manage and execute, especially as companies evolve from traditional manual processes and rely on a variety of tools for handling large volumes of contracts.
Traditionally, the contract management software market has focused on selling specialized solutions that handle a single aspect of the process. For example, eSignature solutions have typically been sold as standalone systems, despite their important role in the overall Contract Lifecycle Management process. However, in the 2022 market, there has been a growing trend towards consolidating these specialized tools into comprehensive, end to end solutions. In particular, a number of the leading CLM providers, including Icertis, Coupa, Apttus and Zycus have seen their solutions grow in popularity as a result of incorporating automation and other cutting-edge technology features.
Another major trend to watch for in the future of Contract Lifecycle Management is the use of machine learning to improve the security and integrity of these systems. With the right approach this technology can help ensure that all data remains secure at every step of the contracting process. It also makes it easier to comply with regulations and reduce the risk of breaches. This is a significant improvement over more traditional approaches that use manual processes to move contracts forward and it helps organizations meet the growing requirements for stronger cybersecurity, supply chain risk management controls and business intelligence.
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