Busting the myths around investing in a CLM Solution
Invest in a CLM Solution: You say why? We say why not
Every contract can be different and it usually is. Clauses can be expressed differently in different words and acronyms – even misspellings can be there. These details are often scattered among multiple clauses in the same contract. The contract process needs to be strategized such efficiently that your time, resources, and staff get managed.
Here are a few reasons why investing in CLM technology should be a top priority for all businesses.
They say “They have local document repository, cabinets where contracts are perfectly stored in an ordered manner which is sufficient for their small-scale business”/ “They have HOMEGROWN CLM which is sufficient to streamline the contract process”.
Then we say: what if your contracts grow from hundreds to thousands? Is it still feasible to store it in messy cabinets?
Spreadsheets combined with manual approaches are old-fashioned; they lack data integration and integration with other systems like CRM or ERP, organizational access (such as a repository), and important alerting features, and can’t be scaled to match growth. In an age of digital transformation, manual processes are a one-way path to obsolescence.
Let’s say you want a copy of a recent version of your contract from your client which is an insurance company and wants to know what are the liability limits. But contracts are scattered in pdf, and hard drives, some in shared folders, and some in spreadsheets. You have to manually go through spreadsheets, and finding such contracts is a cumbersome task. You have a deadline and have no idea where to begin. Here CLM would be a great help as it helps you to centralize your data.
Having an automated contract management solution will be incredibly helpful for your organization to maintain centralized control of the contracts, and also reduce the need for bulky and messy file cabinets which will save a good amount of money.
Small-sized company may have a smaller number of active contracts at some point in time but what if your contracts grow from hundreds to thousands– a level of complexity get increased which is impossible to manage without technology?
Managing your contracts ensures that the investment you have in all your contracts, which is so financially and legally significant, can be used to your best advantage. The reporting and search capabilities of a CLM system mean that you can manage your obligations, ensure your rights, manage provisions, penalties, milestones, expiry dates, rights of access, etc.
They say: “They have a manual process of contract approvals; how a CLM can help to inline an approval process”
Then we say: Having a strong hold on contract workflow can make the approval process quick and hassle-free.
Contracts are complex documents that should be assessed appropriately and if there isn’t a solid review process in place the data may be overlooked. This can leave an organization in a disadvantageous position going forward.
Automation is an integral component of streamlining approvals. Does your spreadsheet have the capacity to give alerts during the expiration of a contract? Manual methods lead to gradual drop-offs in tasks, and there is no justification in today’s technologically advanced world to operate processes using old ways. So, if you are looking for faster approvals CLM is the answer.
To optimize the overall process of contractual activity, a centralized CLM tool is necessary if a company is using many, siloed local repositories for its contracts, each of which provides only limited features for processes like contract approvals.
The ultimate goal of automating a contract management system is to lessen the business and reputational risks of corporations by ensuring they comply with the terms and conditions of every contract.
They say: “Our legal department is responsible for contract management”
Then we say: What happens when documents will grow? They just become this giant, disconnected, and unmanageable warehouse of information.
Are your legal department spending hours reviewing complicated legal documentation to make sure they have caught every addendum, amendment, or required data-points required? If the answer is yes, then you must consider CLM software to centralize data in an organized way so that your legal team won’t get tied up for long hours reviewing contracts. As business owners, you ensure that your working lives are organized so you can concentrate on the core work.
They say: “Why should we migrate legacy contracts into a CLM”
Then we say: Contract migration into a CLM is the way that yields benefits from having a single and unified repository to identify & mitigate the risks.
Contracts carry an enormous amount of information, and knowing what has been committed in past can help take better future business decisions.
Migrating legacy contracts into a CLM leads to a structured database that can help in identifying hidden or forgotten information which may result in additional revenue recognition or obligations that could have caused heavy penalties to the organization. Also, it is an effective measure to track any compliance or regulatory changes.