Intelligent contract management solutions can unlock the hidden potential of businesses, streamline portfolio management, and maximize revenue. The cost-effectiveness of implementing CLM solutions for businesses is becoming evident, and a good CLM tool can help achieve full compliance.
However, the legal tech landscape can be filled with misconceptions as this technology is emerging and still a work in progress. Here we debunk some popular CLM myths:
Myth #1: CLM Solutions are Expensive, Difficult to Use, and Time-Consuming
Legal professionals spend hours manually reviewing contracts and managing them. The cost of manual contract management is quite high when you factor in the number of hours spent doing these reviews.
Although the initial cost of investing in a dedicated CLM solution exists, the return on investment (ROI) justifies it, especially since CLM solutions are proven to reduce the length of regular contract sales cycles. Further, CLM solutions don’t have a steep learning curve. They are user-friendly and intuitive, as well as facilitate faster decision-making.
The best CLM solutions provide contextual training guides to users and step-by-step tutorials on contract management implementation within organizations, which makes adoption faster, seamless, and hassle-free.
Myth #2: CLM Takes Care of Legacy Contract Migration Automatically
Unfortunately, modern CLM solutions aren’t there yet and don’t fully support automated legacy contract migration. Data migration is not simple, but CLM augmented by AI can help digitize contracts, establish data points, and organize the inventory.
Legacy contract migration services are offered by firms that provide CLM implementation services as an add-on and can help to streamline contract management processes once and for all.
Cacti Global’s Managed Services can assist firms with contract management, compliance, regulatory management, document reviews, data rediscovery, and IP management. Cacti’s CLM offerings can analyze and extract metadata from agreements, create well-indexed and searchable contract repositories, and reduce annual revenue leakage by enhancing contract reporting and analytics.
Myth #3: Small Companies Don’t Need CLM
Reducing contract turnaround times can significantly boost savings, speed up efficiency, and help scale businesses. The true advantage of CLM is that it makes routine processes much more efficient and enables obligatory monitoring so you don’t run into unexpected problems. CLM solutions can streamline information exchange between disparate departments in organizations and centralize contract management.
Organizations can save money by creating standardized contract templates and deploying them where needed to save time. CLM software also creates confidence among business owners by helping in assigning due dates for contract obligations and setting up automated reminders and alerts. It ensures companies stay on track with their commitments and don’t miss out on important deadlines like renewals and expiry.
All of the above are functions undertaken by small as well as big companies, hence when small companies implement CLM they too can reap its benefits just the same as any big organization.
Myth #4: CLM Will Replace Legal Attorneys
While there is a classic fear of machines replacing humans, it is not a reality. CLM technology’s objective is to automate mundane tasks and save time by reducing repetitive work. Modern CLM solutions can allocate mundane tasks to machines and free up time for humans to focus on more intelligent activities.
However, CLM technology cannot replace the experience gained by humans nor mimic human-centric qualities like emotional intelligence in cases like making critical decisions. These solutions cannot forge strategic human partnerships which means the technology is not capable of fully replacing practicing attorneys. Automation will not replace lawyers in the future, rather it will aid them in their practice, thus making their jobs easier.
Myth #5: AI Slows Down Contracting Process
A prevailing myth in the industry is that all AI is created equal and it takes too long to train algorithms to review documents. But that is not the case. AI is not meant solely to be used by legal departments and can be deployed for contract management in global corporations.
Accelerating the speed of contract management can help enterprises make actionable decisions backed by data and reduce the risk of their contract portfolio. AI-powered contract management can increase revenue growth and free up ample time which enterprises can use to cultivate strong partner relationships. Minimizing spend while maximizing productivity will aid in reducing operational costs and AI-based legal contract reviews can make teams much more efficient.
CLM is evolving and new use cases are cropping up every day. We’ve done our best to debunk popular CLM myths. Also note that there are many benefits of employing CLM software to give you confidence. Whatever your business requirements are, using a proven and reliable CLM solution can promote efficiency, and operational excellence, help you save on cost, increase security, and improve compliance.