Contract Lifecycle Management involves various stakeholders from distinct departments who contribute as well as derive benefits from a successful and accurate contracting process. Though the benefits of CLM are now common knowledge and span from risk mitigation, bettering the bottom line, and increasing compliance to making the organization more agile and efficient, in order to make the most of the Contract Lifecycle Management Solution, it becomes necessary to emphasize on how each function/ department of an organization can gain individually.
Here is how the following departments along with Legal Team are able to extract the highest value from Contract Lifecycle Management Software:-
Once the sales team have made their case to the client and worked out agreeable price and conditions, the contracting process should not be what slows down the business growth or impedes customer relationships. CLM software eliminates back-and-forth contract editing and redlining process with template libraries and automated notifications. It does not require lengthy requests to get contacts reviewed and signed by different stakeholders as the workflow is pre-defined. CLM Software shortens the sales cycle – which means the potential to earn higher revenues and commissions.
Through AXDRAFT, OLX group was able to save 550 hours of legal work and gain about $49,500 of revenue annually. This could be achieved by reducing the time from 35 minutes to 2.5 minutes on drafting legal documents.
Any average organization has hundreds of buy-side agreements involving facilities and maintenance, various products, outside services, other equipment, consulting, etc. CLM software gives visibility into all the contracts through a well-organized platform. This enables the procurement team to identify opportunities related to volume discounts, eliminate missed deadlines, prevent auto-renewal of contracts that do not serve the business anymore, etc. Easy access to historical price volumes, terms of termination, service level agreement conditions, etc protect businesses from unnecessary costs and penalties.
As per IMF, contract lifecycle management solutions would offer the procurement function an incremental opportunity of over $1,701 million in the period of 2019-2029
Finance and Accounting
The finance team receives requests from multiple teams regarding approving payments, discounts, new payment receivable conditions, and so on. CLM solution automates approval trees, ensuring only the right POC receives the requests, in turn quickening the process. Plus it helps to recognize high-paying clients, delayed payments, and special terms & conditions, which translates into reducing the financial risk of the company as there is clear visibility into obligations, reported & contracted revenue, due dates, renewal terms, etc.
Further, the central repository supports the audit team to readily review the contracts, and the template libraries ensuring uniformity and alignment with the accounting standards.