When it comes to Contract Lifecycle Management, there are 4 things to consider:
Contract lifecycle management (CLM) solutions drive efficiencies and savings in many areas of the business. The right solution will compress time to revenue, cut operational costs, and mitigate risks. This is achieved through fewer contractual exceptions, and it increases customer satisfaction.
The legal team will see a decrease in their repetitive workload, allowing them the freedom to handle more strategic tasks. Sales reps who were frustrated with a lengthy contract process notice that contracts are being executed faster. CFOs and other team leaders are able to use the data to make important decisions for the company.
A CLM Solution works from standardized templates. This ensures that each new contract generated adheres to company guidelines. Human error is unavoidable, but standardization provided by a CLM tool can help. Throughout the contracting process, a CLM tool can help pinpoint the causes of problem areas in a contract. It provides pre-written solutions to these problems from a library of clauses.
To accurately assess the potential for CLM return on investment (ROI), use an ROI calculator. This calculator factors time spent on contracts, missed renewals, and obligation management needs. The ROI calculator doesn’t stop there. It can also calculate sales cycles and realization, rogue spending, and expanding spend under contract.
Research suggests that the world’s most efficient businesses have cut around one-third of the cost on contracts. This is huge when compared to the average corporation. Efficiency is key, and that requires visibility. In this case, your current contract base and number of users who need to access them in various capacities.
Number of Contracts: plug in the total number of contracts created or renewed each year. Considering it takes an average of 7 to 15 weeks to create and execute a contract. The fact that a CLM solution can boost efficiency by at least 33% shows you how much this could benefit your company.
A number of Contract Users: Contract users can be anyone from requestors to legal, contract managers, the procurement team, sales – anyone and everyone who needs to access a contract on a regular basis. Where are those contracts stored (in shared drives, spreadsheets, emails, and file cabinets)? How much manual processing time does that waste? All these questions are important to consider. Industry research indicates you can save up to 20%, with something as simple as a central repository and integrated data.
Numbers are the biggest persuader when it comes to potentially investing in a contract lifecycle management solution. A savings ROI calculator can help you build the business case. It will also help determine which cost-saving or revenue-generating projects to prioritize.
By Sheri Osborn, Consultant