Harnessing the power of contract lifecycle management

Key steps, advantages and how to secure funding

Philipp Rosenauer
Partner Legal, PwC Switzerland

Contracts are the lifeblood of any business, forming the basis of relationships with customers, suppliers and partners. However, managing contracts can be a complex and time-consuming process. Contract Lifecycle Management (CLM) technology offers a solution to these challenges, streamlining contract processes and unlocking the full potential of your agreements. In this blog post, we will explore what CLM is, as well as its advantages, steps for successful implementation, pitfalls to avoid as well as how to articulate the business value of CLM to secure funding for your project.

What is Contract Lifecycle Management (CLM)?

Contract Lifecycle Management (CLM) is the process of managing contracts, from creation through to expiration, renewal or termination. CLM technology enables organisations to automate and streamline contract management processes, providing a centralised platform for creating, negotiating, executing, monitoring and analysing contracts. This not only saves time and resources, but also helps organisations to minimise risk and ensure compliance with contractual obligations.

Advantages of CLM technology

Improved efficiency:
CLM technology automates manual tasks, such as contract creation, approval routing and obligation tracking. This saves time and reduces the risk of errors, allowing your team to focus on more strategic tasks.

Centralised repository:
With a centralised contract repository your organisation can easily access and manage contracts, improving visibility and collaboration across departments.

Enhanced compliance:
CLM solutions can automatically flag non-compliant language, ensuring contracts adhere to internal and external regulations and minimising legal and financial risks. Also, CLM can help to identify and mitigate risks by monitoring contract performance, tracking obligations and sending alerts for upcoming deadlines or renewal dates.

Data-driven insights:
CLM platforms provide data and analytics capabilities, enabling organisations to make informed decisions based on contract performance metrics.

Steps for a successful CLM implementation project

Define your goals:
Begin by identifying your organisation's specific pain points and objectives related to contract management. This will help you establish clear goals for the CLM implementation project.

Assemble a cross-functional team:
Include representatives from legal, procurement, sales, IT as well as other relevant departments to ensure a comprehensive understanding of your organisation's contract management needs.

Evaluate CLM solutions:
Research and evaluate potential CLM solutions, considering factors such as features, scalability, integration capabilities and cost. Request demos and engage with vendors to find the best fit for your organisation.

Develop an implementation plan:
Create a detailed plan outlining the steps, timelines and resources required for the CLM implementation project. This should include milestones, training schedules and data migration strategies.

Train your team:
Ensure that your team is well-trained in using the CLM platform in order to maximise its potential. Provide ongoing training and support to encourage adoption and to address any issues that arise.

Pitfalls to avoid and overcome

Insufficient stakeholder buy-in:
Engage stakeholders at an early stage in the project, clearly articulating the benefits of CLM and addressing any concerns in order to ensure their support.

Inadequate data migration:
Develop a comprehensive data migration plan, accounting for contract categorisation, metadata and legacy systems integration.

Resistance to change:
Address resistance to change by demonstrating the value of CLM, providing adequate training and emphasising the positive impact on users' daily tasks.

Underestimating the importance of user adoption:
Monitor user adoption and provide ongoing support to ensure the success of the CLM implementation project.

Articulating the business value of CLM to secure funding

Quantify the ROI:
Calculate the potential return on investment (ROI) of a CLM solution by estimating cost savings, increased efficiency and risk mitigation. Consider factors such as reduced contract cycle times, decreased legal and regulatory risk and resource optimisation.

Highlight competitive advantages:
Emphasise how CLM technology can provide a competitive edge, enabling your organisation to quickly adapt to market changes, streamline operations and improve customer and supplier relationships.

Showcase success stories:
Share case studies and success stories from similar organisations that have successfully implemented CLM solutions. This will help demonstrate the tangible benefits and potential impact on your organisation.

Align with business objectives:
Clearly articulate how CLM implementation supports your organisation's broader business objectives, such as improving compliance, increasing revenue or enhancing operational efficiency.

Develop a comprehensive business case:
Create a compelling business case for CLM investment, detailing the expected benefits, costs, risks and implementation timeline. Be prepared to address potential concerns and questions from decision-makers.

Conclusion

Contract Lifecycle Management (CLM) technology offers numerous advantages to organisations looking to streamline their contract management processes, minimise risk and unlock the full value of their agreements. With the right planning, strategy and execution, CLM can revolutionise the way your organisation manages contracts and delivers long-lasting benefits to your business.

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