Contract Lifecycle Management (CLM)
Contracts form the backbone of business agreements – without binding agreements, no business network can function in the long term. Therefore, the efficient management of contracts across the entire lifecycle is crucial to minimize risks, ensure compliance and optimize collaboration with partners.
What is Contract Lifecycle Management?
Contract Lifecycle Management (CLM) is the proactive, methodical management of a contract throughout its entire lifecycle: from its creation and signing to its administration and finally its termination and archiving. This lifecycle comprises various phases that ensure that contracts are created, monitored, amended and terminated efficiently.
How does Contract Lifecycle Management work? The different phases of CLM:
In the first phase of the CLM, the terms of the contract are negotiated, defined and the contract is drawn up.
The parties involved check the contract for accuracy and completeness. Changes may be made and the contract is submitted for approval.
Conclusion of contract by signing
After approval, the contracting parties will sign the contract, which makes it legally binding.
In this phase of contract lifecycle management, contracts are actively used and implemented after they have been signed. This is done by applying and enforcing the conditions, agreements and obligations set out in the contract. It involves the relevant departments, teams and resources to ensure that the services specified in the contract are delivered. This may include managing contract amendments or extensions, for example due to negotiations, changes in terms and conditions or other circumstances. The decision to extend or terminate contracts is also part of this phase.
During the course of the business relationship, it is important to ensure time and again that the contract and activities comply with legal regulations and company guidelines. This is done in contract controlling.
Termination of contract
The contract termination phase in CLM comprises the scheduled or premature termination of a contract. This includes compliance with termination conditions, the fulfillment of final conditions, the return of resources and, if necessary, negotiations on follow-up agreements.
Efficiency gains and overview for companies
Effective management of the entire contract lifecycle using CLM can help to minimize risks, ensure compliance with contract terms and improve cooperation between the contracting parties. Professional contract lifecycle management leads to increased efficiency, risk minimization, cost savings, a better negotiating position, reliable compliance and transparent analyses.
For which companies and application scenarios are CLM tools suitable?
Contract lifecycle management tools are particularly suitable for organizations in which contracts play a central role. This includes, for example
Companies with complex contract structures
CLM software is particularly useful for companies that have complex contract structures, such as large organizations with numerous business partners, suppliers and customers or those with multidimensional sales models.
Industries with strict compliance requirements
Companies in regulated industries such as financial services, healthcare or energy that must meet strict compliance requirements can benefit from contract lifecycle management tools to ensure that their contracts are always compliant with current regulations.
Globally active companies
Companies that operate in different countries or even worldwide and have to deal with different legal systems and languages can use contract lifecycle management software to create and manage consistent and standardized contracts.
Procurement and supply chain management
Organizations with complex procurement and supply chains can use CLM software to manage contracts with suppliers, ensure compliance, mitigate risk and ensure transparency across the board.
Technology and software company
Companies in the IT and tech industry, which often have complex license agreements and partnership agreements, can achieve efficient contract management by using a CLM tool.
As contracts are a central component of day-to-day business in almost all companies, it is worthwhile for each company to individually evaluate the advantages of a CLM tool and decide whether such a solution is worthwhile based on the potential benefits. For example, the automation of contract processes reduces manual tasks and speeds up contract processing. This not only saves time, but the added transparency also enables cost savings in connection with impending breaches of contract and conflicts. Companies also gain a better negotiating position if they can view all information at a glance. This also helps to avoid legal problems from the outset, to adhere to compliance requirements at all times and to optimize effective collaboration both internally and with external partners.
The advantages of contract lifecycle management
Increased efficiency
Automation of contract processes leads to faster contract conclusions and reduces manual effort.
Risk minimization
Identification, monitoring and management of risks in order to minimize legal problems and financial risks.
Cost savings
Reduction of administrative costs through automation and better control over contract terms.
Better negotiations
Access to historical contract data enables informed negotiations and favorable contract conditions.
Compliance guarantee
Ensuring that contracts comply with legal requirements to guarantee legal certainty.
Improved collaboration
Central databases and collaboration functions promote effective cooperation between teams and partners.
Optimization of the contract life cycle
Continuous improvements throughout the contract lifecycle for efficient contract management.
Fast response to changes
Adaptation of contracts to changing business conditions or legal requirements.
Reporting and analyses
Preparation of reports and analyses to evaluate the performance of contracts and contractors.
We offer you the right solution for your challenges
Transparent financial planning provides clear insights into costs and income per contract as well as comprehensive evaluations. This function enables better financial control and evaluation of the profitability of individual contracts. Prepared workflows are available for the efficient organization of contract approvals and the end of contracts. These facilitate the coordination process and ensure structured processing. The Ceyoniq solution also includes a powerful SuperSearch function, which enables fast and precise searches in contract data and documents. E-signatures also support a fast and secure signing process.
You benefit from a user-friendly interface with convenient functions such as a customizable dashboard and resubmissions. This allows your teams to manage their tasks effectively and keep track of all relevant information at all times. Contract partners can be managed effortlessly by assigning addresses and contact persons to the corresponding contracts. Deadline management allows you to organize resubmissions, reminders and a clear contract calendar. This ensures that no important deadlines are overlooked and enables your team to manage contracts proactively. The integrated contract generator makes it much easier to create contracts using text modules and prepared templates.
Your benefits at a glance
- Security when creating contracts thanks to tested templates
- Reduction of manual activities through automation
- Faster throughput times thanks to integrated process control
- Flexibility through access from any end device
- Security and minimization of legal and financial risks through adherence to compliance guidelines and authorizations
- Faster and more flexible due to reduced administration effort
- Transparency through detailed reporting and an overview of contract conditions
- Improved cash flow through integrated budget planning
- Automatic checking of contract content and comparison with internal regulations using artificial intelligence
Get in touch.
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Ceyoniq Technology GmbH is a group company of Kyocera Document Solutions.
Ceyoniq Technology GmbH
Boulevard 9 | 33613 Bielefeld
Together we develop strong ideas and implement tailor-made and individual solutions for companies and public administrations – contact us, we look forward to hearing from you!
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