Contract Lifecycle Management (CLM)
Contracts form the backbone of business agreements – no company can function long-term without these legally binding documents. This makes efficient, lifecycle-spanning contact management crucial for companies to minimise risks, ensure compliance and facilitate optimal stakeholder collaboration.
What is CLM?
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 is made up of phases that ensure contracts are created, monitored, amended and terminated efficiently.
How does CLM work? The different phases:
In the first phase of CLM, the contract is drawn up based on negotiated and defined terms.
Relevant parties check the contract for accuracy and completeness. After any required amendments, the contract is submitted for approval.
Conclusion of contract by signing
After approval, the parties will sign the contract to make it legally binding.
This phase of CLM sees signed contracts used and implemented, with their conditions, agreements and obligations put into effect. This process involves the relevant departments, teams and resources required to deliver the services specified in a contract. This may include managing contract amendments or extensions, which occur as a result of negotiations, changes in terms and conditions or other circumstances. The decision to extend or terminate contracts also falls under this phase.
During a business relationship, ensuring that contract activities comply with legal regulations and company guidelines at all times is important. This can be managed through contract oversight.
Termination of contract
The contract termination phase in CLM involves the scheduled or premature termination of a contract. This includes required compliance with termination conditions, fulfilment of final conditions, return of resources and, if necessary, negotiations on follow-up agreements.
Efficiency gains and overview for companies
Harnessing CLM to manage a contract’s lifecycle can minimise risks, ensure compliance with contract terms and improve cooperation between contracting parties. Professional CLM leads to increased efficiency, minimised risk, cost savings, improved negotiating positions, reliable compliance and transparent analysis.
Which companies and scenarios are CLM tools best suited for?
CLM tools are particularly suitable for organisations where contracts are integral, including:
Companies with complex contract structures
CLM software is particularly useful for companies with complex contract structures, such as large organisations with numerous 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 can benefit from CLM tools to ensure that their contracts are always compliant with their strict compliance requirements.
Globally active companies
Companies that operate in multiple countries or worldwide can use CLM software to create and manage consistent and standardised contracts that navigate the diversity of legal systems and languages their business engages with.
Procurement and supply chain management
Organisations with complex procurement and supply chains can use CLM software to manage supplier contracts, ensure compliance, mitigate risk and establish consistent transparency.
Technology and software
Companies in the IT and tech industry can manage their complex license agreements and partnership agreements with efficient contract management via a CLM tool.
Given how critical contracts are in day-to-day business operations, assessing CLM tools and their potential benefits is a worthwhile exercise for any company. For example, automating contract processes can reduce manual tasks and accelerate contract processing. This not only saves time, but also improves transparency to unlock cost savings – particularly concerning possible breaches of contract and conflicts. Companies that can easily establish all information related to their contracts can also establish better negotiating positions. This helps to avoid legal problems from the outset of the contract drafting process, adheres to compliance requirements at all times and optimises working between the contract stakeholders, internal and external.
The advantages of CLM
Increased efficiency
Automated contract processes lead to faster contract conclusions and less manual effort.
Minimised risk
Risk identification, monitoring, and management minimise legal problems and financial threats.
Cost savings
Reduced administrative costs via automation and better control over contract terms.
Smoother negotiations
Access to historical contract data paves the way for informed negotiations and favourable contract conditions.
Compliance peace of mind
Ensuring contracts comply with legal requirements to guarantee legal certainty.
Improved collaboration
Central databases and collaboration functions ensure effective cooperation between teams and partners.
Optimised contract life cycle
Continuous improvements throughout contract lifecycles for efficient contract management.
Fast response to changes
Adaptation of contracts to shifting business conditions or legal requirements.
Reporting and analysis
Preparation of reports and analysis to evaluate the performance of contracts and contractors.
We offer the right solution for your challenges
Transparent financial planning provides clear insights into costs and income by contract, as well as comprehensive evaluations. This function enables greater financial control and evaluation of individual contracts, including their profitability. Pre-built workflows are available for the efficient organisation of contract approvals and their termination. The workflows simplify the co-ordination process and ensure structured contract handling. The Ceyoniq solution also includes a powerful SuperSearch function, which enables fast and precise searching for 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 customisable dashboard and the ability to set reminders. This allows your teams to manage their tasks effectively and always keep track of relevant information. Contract partners can be managed effortlessly by assigning stakeholder addresses and contact details to corresponding contracts. Deadline management allows you to set reminders and a clear contract calendar. This ensures that important deadlines aren’t missed and contracts are managed proactively. An integrated contract generator makes the creation of contracts using text modules and pre-built templates much easier.
Your benefits at a glance
- Tried-and-tested templates for peace of mind when creating contracts
- Fewer manual requirements through automation
- Quicker throughput times via integrated process control
- Enhanced flexibility with access possible from any end device
- Improved security and reduced legal and financial risks through adherence to compliance guidelines and authorisations
- Opportunities to be more nimble in light of reduced administration responsibilities
- Transparency through detailed reporting and overviews of contract conditions
- Improved cash flow through integrated budget planning
- Automated contract content checking and comparison against 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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