Understand CLM ROI for Your Business

Less than 20% of organizations attempt to calculate the cost and benefits of implementing Contract Lifecycle Management (CLM) solutions into business workflows, hence missing out on a lucrative investment.

A good CLM tool addresses the challenges of modern contract management and provides a structured framework for businesses. There are 4 key factors to consider for effective contract lifecycle management:

  1. Streamlining business processes and eliminating errors in documentation
  2. Reducing operational expenses
  3. Shortening timelines for executing and implementing contracts
  4. Enhancing efficiency and in turn annual revenue

The right solution can reduce repetitive workflows, standardize templates, and ensure that companies meet compliance requirements and satisfy legal obligations. A CLM tool can pinpoint problem areas in contracts and identify possible improvements. It can also provide a library of clauses to quicken the contract drafting process.

How to Calculate CLM ROI

You can assess the ROI of a CLM solution for your business by using an ROI calculator. This calculator takes into consideration obligation management requirements, rogue spends, sales cycles, total time spent on contracts, growing expenses, and missed renewals.

Organizations spend on average anywhere from 7 to 15 weeks to create and execute contracts. By using a CLM solution, organizations can increase efficiency by at least 33% and on top of that improve contract visibility. A CLM solution also allows companies to increase customer satisfaction, mitigate risks and cut down on operational expenses.

You can calculate CLM ROI by using the following formula:

(Profit from Investment – Total cost of ownership) / Total cost of ownership

Though this is not the end of ROI calculations. It also depends on the total number of contracts created & renewed each year and is influenced by business use cases and other key variables unique to every company, some of which are:

  • Change management expenses
  • Implementation and training fees
  • Maintenance and opportunity costs

CLM solutions can help you reduce manual contract administrative costs, save hours on contract research, and provide access to real-time financial data giving you actionable insights about the company and contract. It enables you to anticipate risks, notifies you of expiration and renewal dates, streamlines vendor authorizations, rejects unauthorized approvals, and much more. All this translates to increased sales and betters the company’s reputation.

How Can Cacti Help 

Cacti Global helps companies improve their Contract Lifecycle Management ROI and offers flexible talent management solutions. As a leading Talent-as-a-Service (TaaS) platform, we have expertise in Legal and Legal-Tech, with extensive industry knowledge in SalesForce, CLM, .NET, and DocuSign frameworks. Our CLM Talent Solution reduces overheads & administrative costs and helps you optimize resources and the contracting process as per changing market conditions.

Through faster turnaround time, improved contract visibility, and smooth legacy contract migrations, you will notice significant acceleration in the sales cycle, giving your company an edge. Enjoy easy document analysis, identify critical legal clauses, and let us help you sync your paperwork with your existing infrastructure.

Our clients have trusted us to improve their project deliveries and solve challenges revolving around procurement and supply in their operations. You can book a consultation with us or get customized recommendations for your business by reaching out to us.

Works Cited:

Artificial Lawyer, 2021, A Quick-Start Guide to CLM Software ROI Calculations. Retrieved from Artificial Lawyer:

Mark Ross, D. H., 2022, How to Enhance Value and Calculate ROI for Your CLM Transformation. Retrieved from Deloitte:

Osborn, S., 2023, 4 Insider Tips About Contract Lifecycle Management. Retrieved from Uptima:


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