Contract lifecycle management is a process that streamlines and automates the contract process during key stages of the contract lifecycle process. This can help companies with their workflow in managing numerous contracts at once, and can also help during every stage of the contract lifecycle, including initiation, autoring, execution, compliance and renewal. This might seem like a complex process, but contract lifecycle management is actually quite simple. With that in mind, here is how you can use contract management software to effectively manage the lifecycle of your contracts.
How Contract Lifecycle Management Works
Of course, any contract process is initiated once a contract is requested or needed to manage an ongoing business transaction. Once two businesses decide that a contract needs to be put in place, contract lifecycle management comes into play almost immediately. To start, a contract needs to be drafted. Using contract lifecycle management, an automated template can be created. During the planning and pre-contract phases, this template can be altered as needed to be within the confines of the deal that is being created. You can also create new templates as needed for different types of relationships or business situations.
That being said, a contract is rarely ready to be signed as-is. This is where contract lifecycle management becomes essential, as it is necessary for you both parties to track any changes made to a contract during the negotiation phase. THis helps save on legal fees and also keep both parties abreast of any changes that are created. In addition to this, contract lifecycle management can serve as a central repository where both parties can interact with the contract. This promotes transparency during the contract management process and allows both parties to know exactly what is going into the contract and what terms may be contentious.
Beyond this, contract lifecycle management helps you to holistically track the contract performance in a data-driven manner. This means that by using contract management software and tracking the entire lifecycle of the contract, you can track key performance indicators of the contract and see if they have been adequately filled to the satisfaction of both parties. Using contract lifecycle management, you can run customized reports based on the specific criteria of the contract. These can be based on anything from commision rates, to business territory, or renewal lengths of the contract. Doing this will help in the re-negotiation phase and make sure that both parties have done their due diligence on the overall performance of the contract.
While contract lifecycle management is a relatively new concept, its benefits for businesses are innumerable. Streamlining and automating the contract process is essential for businesses who run on a large number of relationships and contracts, as well as those that need to create unique contracts for new types of relationships frequently. As such, contract lifecycle management can be used in a variety of contexts, and using a contract management software to make sure that the whole process runs smoothly is essential for success.
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