Contract Management Lifecycle (CLM) Decoded: Unlocking the Benefits of Managed Contracts.

TLDR:

This short article discusses Contract Lifecycle Management (CLM) solutions, which help streamline contract processes, improve compliance, and enable data-driven decision-making in organisations large and small. It advises starting with foundational elements of CLM before adding more advanced features on maturity. It also provides a checklist for implementing a CLM system, stressing the need for defining objectives, choosing the right solution, involving stakeholders, and planning data migration and training. The article concludes with the importance of CLM in enhancing business operations and relationships.

Introduction

In the dynamic and competitive business landscape of the Middle East, organisations face numerous challenges in managing their contracts efficiently. With an ever-increasing volume of contracts, diverse international legal systems, and complex supplier relationships, traditional contract management methods often fall short of delivering optimal results. Whether you are new to contract management or seeking to enhance your organisation's processes, this short paper will provide a roadmap to navigate the world of CLM. 

The CLM Solution Landscape

The current CLM landscape includes a diverse range of global technology providers, each of them distinguished by their experience and the features and functionalities they offer. 

In our view, if your organisation has not yet implemented a CLM solution and is considering doing so, we recommend starting with the foundational elements. These aspects represent low-hanging fruit, delivering substantial benefits that are relatively easy to deploy. Once these foundational elements have matured, your organisation can then focus on bolting on additional modules to attain more strategic benefits...in short when starting out it is always best to ’learn to walk before you can run’.

Foundation elements would comprise:

• Contract Repository and Storage: acts as a centralised and secure database, facilitating easy access to contract documents and enabling users to search, retrieve, and view contracts based on specific criteria

• Contract Obligations Management: ensures adherence to contractual milestones and obligations, such as renewal dates and performance metrics, by sending automated reminders to stakeholders

• Contract Approval Workflow: automates the approval process, tracking progress, sending notifications, and expediting contract approvals

• E-Signatures and Digital Signatures: streamlines the signing process electronically, ensuring enhanced security and compliance with electronic signature regulations. 

Advanced elements may typically include:

• Contract Creation and Authoring: allows users to efficiently create new contracts using standardised templates, clauses, and pre-approved language, streamlining the contract creation process through real-time collaboration and draft reviews

• Contract Negotiation and Collaboration: fosters real-time collaboration among stakeholders during negotiations, allowing comments, feedback, and change tracking

• Contract Compliance and Risk Management: monitors compliance with internal policies and external regulations, identifying potential risks and triggering alerts for timely mitigation

• Contract Analytics and Reporting: provides valuable insights into contract performance, value, and KPIs through customised reports and dashboards, facilitating data-driven decision-making and contract optimisation

Lastly, an effective CLM deployment must also ensure smooth integration with other business systems, ERP’s and procurement platforms. For example, within a Source-to-Contract process, the CLM solution must be able to prepare a contract as a continuation of a completed ‘sourcing’ process, allowing users to add specified products and prices directly to the contract, create catalogues directly over the prices, place purchase orders from catalogues, and keep track of expenditure. Or SRM where supplier information is managed centrally and flows natively through the process into the contract lifecycle phase.

Benefits of Implementing CLM

A basic CLM platform can help organizations streamline contract processes, ensure compliance, and enhance collaboration. While an advanced CLM solution provides additional benefits, such as harnessing data-driven insights for strategic decision-making, optimizing supplier relationships, and ensuring adaptability for future business growth.

• Enhanced Efficiency: CLM streamlines contract processes, automating repetitive tasks, and reducing manual effort. This efficiency translates to faster cycle times, increased productivity, and improved resource utilization

• Improved Compliance and Risk Mitigation: By monitoring contract obligations and regulatory requirements, CLM ensures compliance and helps identify potential risks. This proactive approach mitigates legal and financial liabilities

• Cost Savings and Better Deals: Effective CLM supports better negotiation strategies and optimised contract terms. Organisations can secure cost savings and enhance supplier relationships.

• Data-Driven Decision Making: CLM solutions offer contract analytics, providing insights into contract performance and trends. This data-driven approach empowers informed decisions and strategic planning.

• Enhanced Collaboration: CLM facilitates real-time collaboration among contract stakeholders, fostering cross-functional alignment and effective communication.

A Checklist for Implementing CLM

We recommend keeping the following steps in mind when looking to implement a CLM solution.

• Define Objectives and Requirements: Before choosing a CLM solution, outline your organisation's specific needs and objectives. Consider factors such as contract volume, industry requirements, and integration with existing systems.

• Choose the Right CLM Solution: Research and evaluate variousCLM solutions to find the best fit for your organisation. Look for user-friendly interfaces, customization options, security features, and scalability.

• Involve Key Stakeholders: Involve all relevant departments, such as legal, procurement, and finance, in the implementation process. Their insights and collaboration are vital for successful adoption.

• Data Migration and Training: Plan for data migration from existing contracts to the new CLM system. Provide comprehensive training to all users to ensure a smooth transition.
  

Conclusion

CLM has become a fundamental aspect of successful procurement operations, and leveraging technology and adhering to best practices are essential for maximising its benefits. The journey to efficient and compliant contract management is a continuous one, but building strong foundations can set you up for future benefits. 

When you are looking to streamline your procurement processes and achieve savings, our proven procure-tech solutions can help. Whether you need to automate your purchasing workflows, manage your supplier relationships effectively, or gain better visibility into your spend, we've got you covered. We would love to connect and discuss how our solutions can benefit your business, you will find our contact details below for a complimentary consultation.

Thank you,

Marshall & the TechConnect:ME Team.

About Marshall

Marshall is a co-founder at TechConnect:ME, he has over 13 years experience in the procurement technology & professional services space, including roles in some of the top tier procurement technology, research & analytics companies. Marshall has worked across the Middle East, Asia & Europe and holds degrees in mathematics and economics. You can catch Marshall on his LinkedIn at: 

https://www.linkedin.com/in/marshallmathias/

or his email: 

marshall.mathias@techconnectme.com