The 7 Stages of Contract Lifecycle Management (CLM)
Introduction
Contracts, whether they are employment agreements, business contracts, client agreements, licensing agreements, or more complex documents like confidential agreements and procurement contracts, play a crucial role in business operations. Managing these contracts can be quite a challenge for organizations.
Just imagine the workload of an HR or a Sales lead who has to coordinate with various departments, create and review contracts, identify process improvements, and guide teams through the entire contract lifecycle. It’s important to note that contract lifecycle management is different from contract management, even though the terms may sound similar.
In this blog, we will explore the concept of contract lifecycle management and its 7 stages in simplifying the management of contracts for businesses.
What is Contract Lifecycle Management (CLM)?
Contract Lifecycle Management (CLM) refers to the systematic management of contracts from initiation to execution, ensuring compliance and maximizing value.
It encompasses all stages, including contract creation, negotiation, approval, execution, and renewal or termination. Contract Lifecycle Management (CLM) focuses on improving efficiency, minimizing risks, and enhancing collaboration throughout the contract management lifecycle.
The 7 Stages of Contract Lifecycle Management (CLM)
Contract Request
The first stage involves the submission of a contract request. This could be initiated by various stakeholders, such as sales leads, HR leads, CXOs, or directors. A CLM software allows users to create a contract request form, capturing essential details like the purpose, parties involved, and desired terms.
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Example: John, the sales lead, submits a contract request to draft a new sales agreement with a potential client. He fills out the necessary information on the Contract Lifecycle Management CLM tool, including key deliverables, payment terms, and contract duration.
Contract Creation
Once the contract request is approved, the contract creation stage begins. CLM tools offer pre-approved templates or allow users to create customized contracts. These tools facilitate easy collaboration by enabling multiple stakeholders to review and provide input simultaneously.
Example: Sarah, the legal team lead, receives the contract request and uses the CLM software to draft a comprehensive sales agreement. She incorporates standard clauses, negotiates terms with the client, and ensures legal compliance.
Contract Negotiation
During this stage, the contract undergoes a negotiation process between the parties involved. CLM software enables secure and efficient negotiations by providing a centralized platform where stakeholders can collaborate, track changes, and communicate in real time.
Example: Sarah and the client’s legal representative engage in negotiations, discussing pricing, warranties, and intellectual property rights. They utilize the Contract Lifecycle Management CLM tool’s features to track changes, leave comments, and reach a mutually beneficial agreement.
Contract Approval
Once the negotiation is finalized, the contract moves to the approval stage. CLM tools automate the approval workflow, ensuring that all necessary stakeholders review and provide their consent. This stage enhances accountability and reduces delays in the approval process.
Example: After finalizing the sales agreement, Sarah submits it for approval to the sales director, finance director, and the client’s legal team. Each stakeholder reviews the contract using the CLM software and provides their approval electronically.
Contract Execution
Upon receiving the necessary approvals, the contract enters the execution stage. CLM tools facilitate seamless execution by offering electronic signature capabilities, eliminating the need for physical paperwork. This ensures faster turnaround times and reduces the risk of misplaced or lost documents.
Example: Once all parties have provided their electronic signatures using ZoopSign, the sales agreement becomes legally binding. The CLM software automatically stores the executed contract in a secure repository for easy future access.
Contract Management
During the contract management stage, Contract Lifecycle Management CLM tools provide a centralized repository for storing and organizing contracts. This allows users to search, track, and manage contracts efficiently. The software also provides reminders for important milestones, such as contract renewals or termination dates.
Example: ZoopSign’s zDrive feature enables users to store, categorize, and retrieve contracts effortlessly. Sarah can easily access the executed sales agreement, track its progress, and set automated reminders for contract renewal.
Contract Renewal/Termination
In the final stage of the Contract Lifecycle Management CLM process, contracts are either renewed or terminated based on predefined criteria. CLM tools streamline this stage by providing automated workflows for renewal or termination notifications, ensuring timely action and minimizing the risk of missed deadlines.
Example: As the contract’s expiration date approaches, the Contract Lifecycle Management CLM Software sends automated reminders to Sarah, prompting her to review and initiate the renewal process. If the contract is not renewed, the system facilitates the termination process, ensuring compliance with agreed-upon terms.
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Next Step in CLM: ZoopSign — Simplifying Contract Management
To further enhance contract management, organizations can leverage ZoopSign, a leading CLM software that offers a wide range of features tailored to meet the specific needs of businesses.
ZoopSign simplifies the entire contract management lifecycle by providing:
- Document Tracking: ZoopSign’s Doc-Track feature enables users to track the progress of contracts in real time, ensuring transparency and accountability throughout the process.
- eSigning: With ZoopSign’s electronic signature capabilities, contracts can be signed digitally, eliminating the need for physical paperwork and expediting the execution process.
- zDrive: ZoopSign’s secure repository, zDrive, offers a centralized location for storing and organizing contracts, making it easy to access and retrieve documents whenever needed.
- Enhanced Security: ZoopSign prioritizes data security by implementing robust encryption protocols, ensuring the confidentiality and integrity of sensitive contract information.
- Collaboration and Workflow Automation: ZoopSign enables seamless collaboration among stakeholders, providing a platform for real-time discussions, trackable changes, and automated workflows for approvals and reviews.
Free Contract Lifecycle Management CLM Software in the Market
While there are various CLM software options available, ZoopSign stands out for its user-friendly interface, comprehensive features, and exceptional customer support. Book a free demo today to experience the power of ZoopSign and witness how it can transform your contract management process.
In today’s digital age, contract management is evolving rapidly, and CLM tools have become indispensable for organizations looking to streamline their processes, enhance efficiency, and ensure compliance. By using secure Contract Lifecycle Management CLM software like ZoopSign, businesses can simplify document work, enhance security, and transform the way contracts are managed. Embrace the power of CLM and elevate your contract management capabilities with ZoopSign today.
FAQs:
1)What is CLM software in India?
CLM software, or Contract Lifecycle Management software, is a digital tool that helps businesses in India streamline and automate contract management processes.
2)What are some key features of CLM tools?
CLM tools offer a range of features such as document tracking, electronic signature capabilities (eSigning), secure document storage (zDrive), collaboration tools, automated workflows, and enhanced security measures.
3)What sets ZoopSign apart as a CLM software in India?
ZoopSign stands out as a comprehensive CLM software in India, offering a user-friendly interface, secure document tracking, eSigning capabilities, secure document storage in zDrive, advanced security protocols, and smooth collaborations.
4)Is there free CLM software available in the market?
Yes, there are free CLM software options available in the market. ZoopSign, for example, offers a free demo as well as a freemium plan to showcase its features and how it can benefit organizations in simplifying contract management.
