Contract Management in 5 Stages

Breaking down the contract lifecycle management (CLM) procedures into manageable phases is a crucial component of the analysis. The entire process must be broken down into discrete stages, beginning with generation and moving through a clear flow of actions to completion, in order to uncover general trends. Once those processes have been identified, they can be separated and examined separately to check for room for improvement. We'll examine a brief overview of the processes in the contract management process, as well as information on how contracts are currently managed and how technology may streamline contracts in the future.

• Generation: A contract's lifespan must begin with the creation of its first draft. Almost no businesses are beginning over with new contracts, yet this can still be a drawn-out procedure. The majority of respondents (62%) still use Microsoft Word, either online or offline (50%) to generate new contracts, even if 40% of them have advanced to use an interaction with Salesforce.

• Negotiation: Following the creation of a contract, back and forth negotiations between all parties are required to reach an agreement on the final terms. Only one in six of the respondents to the poll were able to finish contract negotiation in nine hours or less, indicating how time-consuming this part of the process is for them. In order to complete a contract, 71% of our respondents will create at least three different iterations of the document, and nearly half of them spend 20 hours or more doing so.

• Routing: Today's contractual professionals use a variety of platforms to share contracts both internally and externally. While email (69%) and cloud storage systems (60%) are the most often used routing tools, a sizable portion of today's contract workers (29%) and (18%) still rely on antiquated methods like postal mail and fax. The fundamental drawback of each of these contract sharing strategies is that they remove both the contract and the users from the CLM system.

• Approval/signature: The majority of today's contractual specialists have grown into the ability to use contemporary tools when it comes time to finalize a contract by obtaining signatures. A CLM tool with established workflows has been integrated by almost two thirds of the respondents. However, about 5% of respondents still transmit contracts as paper copies or email attachments for clearance. At scale, these manual processes encounter significant issues. The delays and inefficiencies of these exchanges can mount up quickly, with about 25% of teams indicating that at least 5 different people are involved in the contract approval process.

• Storage: Today's businesses frequently use cloud storage after a contract is signed. About two-thirds of respondents maintain finished contracts using cloud storage, either solely or in conjunction with on-premises servers. Only 8% of the businesses  surveyed said they kept their agreements in paper file cabinets. Despite the fact that the majority of firms keep contracts on the cloud, 43% of respondents say they have never been able to find one.

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