What Is Contract Lifecycle Management Software?

Contract lifecycle management software powered by proprietary artificial intelligence can be trained on millions of contracts to instantly identify key clauses and metadata from any contract to provide accurate real-time analysis. AI software can pull your own clauses unique to your business. When creating a contract, contract lifecycle management software takes advantage of legal-approved templates built from clauses in your stored contracts, so that deals are on your own terms and conditions. 

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Why Should I Use Contract Lifecycle Management Software?

The Importance of Contracts

Contracts are the foundation of a successful organization. They are the driver of countless business processes, propositions, etc. These legal documents will either save or break any organization. The most challenging aspect of construction, negotiation, and execution of contract lifecycle processes is that they require hundreds of hours of work, multiple collaborators, and multiple departments.

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Benefits of Contract Lifecycle Management Software 

With contract lifecycle management software, every approver across the organization can be held accountable directly from one location to collaborate, negotiate, review, approve, and sign. By removing barriers throughout the contract lifecycle, contract lifecycle management software accelerates the contracting process. Several solutions are available to assist in locating contracts, gathering signatures and approvals, completing the drafting process, and more. Having a clearly defined process online allows things to be completed faster, resulting in a significant reduction in the time that goes into each contract. Utilizing contract lifecycle management software provides more time to be spent on legal and business analysis, and allows you to be proactively in charge and always on schedule. Organizations can collaborate and negotiate in one unified workspace, with all edits, approvals, mark-ups, and execution taking place on one platform instead of multiple platforms. 

There is a considerable amount of time spent on redlining documents, drafting emails, and discussing provisions across a range of channels in traditional negotiations. There is a great deal of labor in the process, as well as inefficiency and bottlenecks. Data dashboards in contract lifecycle management software provide valuable insights and visibility into workloads, distribution, and where in the life cycle delays are occurring. Using data-driven solutions, businesses can also automate their contracting processes across multiple facets of their operations, not just the legal department. With contract lifecycle management software, users can create digital playbooks that are easy to follow. When another deal is made with contract lifecycle management software, you'll have the tools to accelerate the legal process.

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Factors to Consider When Buying a Contract Lifecycle Management Software

• Rigid Approval Process: It is imperative that the contract lifecycle management software has multiple levels of user permissions and a multi-tiered approval process in order to protect the integrity of your contract. To prevent unauthorized modifications to contracts, the admin can set editing or view-only controls. It is also important to maintain the latest version of a document using document versioning. Where necessary, the system must allow reverting to previous versions.
• Third-Party Integration: Contract lifecycle management software must be integrated with ERP or accounting systems so they can analyze the ROI of contracts. For budget forecasting and other financial reports, accounting needs quick access to contract terms. It should also integrate with key business and productivity apps like cloud storage, sales software, document management, and customer relationship management software.
• Security: It is always a major factor when it comes to vendors. You should look for security features such as two-factor authentication, data encryption, user permissions, and access management. Verify that the vendor is legitimate and has a long-term reputation.
• Automation: How can contract management be automated to maximize efficiency? Templates may be selected for entire contracts and clauses, reports can be generated, and stakeholders can be notified when approval is complete.

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What are the 7 Steps of the Contract Lifecycle Management Process?

There are seven steps to the contract lifecycle management process.

1. Template authoring: Template authoring creates templates that content authors use to create contracts. 
2. Contract creation:  In order to manage a contract, an individual or team must submit a request outlining the terms of the contract. A sales agreement, NDA, loan agreement, or licensing agreement might be an example of this type of contract. After a request has been made, the legal team drafts the contract. With contract lifecycle management platforms, you can easily input approved, consistent language into a document with one-click options for preferred terms and positions. Using them also allows counterparties to make their positions clear in a negotiation, enabling transparency and producing an automatic issue list without having to manually compare documents and make changes.
3. Contract review: Once the initial draft of the contract is created, a lawyer has to revise and review the validity and quality of the contract. 
4. Contract approval: The contract in question has to be viewed by all parties in order for the contract to be approved. 
5. Contract execution: It is often necessary to obtain final approval before execution - and then the collection of signatures, which can take a considerable amount of time when several signatories are involved.
6. Contract performance: Contract performance requires all members of the contract to fulfill their promised obligations.
7. Contract expiration: In the event that a contract has reached the end of its term, it is either renewed or terminated, either automatically or manually, according to mutual agreement. Contract Lifecycle Management platforms can help manage this process too, with auto-renewals and notifications to relevant parties at the required time in the contract lifecycle.