What is Contract Management?

    Contract management is the process of managing contract creation, execution and analysis to maximize the operational performance of your business and to reduce financial risk. Contract management’s value comes from the time and money companies save generating, reviewing, approving, signing and renewing contracts, as well as from the added risk management capabilities within that process. These savings can make room for you to expand sales and increase revenue.

    We define contract lifecycle management as the process by which an organization can strengthen and tap into the value of its contract portfolio in order to shorten the sales cycle and reduce customer acquisition costs. The value comes from the time and money saved during the contract process. If you can increase productivity behind managing contracts, you can get deals signed faster and have more time to pursue other deals and expands sales for your business. Businesses apply contract management technology to standardize, streamline and automate contract creation, processing, negotiation, execution through to expiration and archiving.

    Benefits at Each Step of a Contract Process

     Generating

    The cloud enables agile contract generation capabilities that empower salespeople to quickly create new contracts using pre-approved templates. These templates can use information merged from other locations, such as the customer relationship manager (CRM), speeding the process along.

     Sharing

    When you store and edit a contract in the cloud, sharing contract changes is a lot easier. This level of communication ensures that all stakeholders are looking at the same document, thereby eliminating the risks involved with creating multiple versions or emailing contracts back and forth.

     Storing

    Contracts stored in the cloud are easier to find, leveraging customized tags that allow for location in seconds. In our State of Contract Management Report, we revealed that almost 45 percent of contracts are being stored in shared drives, where contracts can become misplaced or lost in a system of folders.

     Tracking

    Salespeople need to know the status of contract negotiations in order to understand when the deal will close. A contract management software automatically records every action taken on the document, creating transparency and predictability in the process.

     Approvals

    Contract management solutions can automatically route the contract to the appropriate approver when it's their turn to sign, eliminating the need to hunt for the right person. Some contract management tools integrate with electronic signature capabilities, eliminating paper and even allowing signatures from a mobile device.

     Renewals

    In a traditional contract process, renewals can fall to the back burner in favor of newer contracts. Automatic reminders, set well ahead of renewal dates, give your salespeople the opportunity to extend revenue and customer relationships. When you leverage your solution alongside a CRM, contract terms and customer information can be easily stored and accessed, giving a headstart on any reviews required before a renewal.

    Contracts take the longest in the Quote-to-Cash process

    Contract Management is not the only part of the sales cycle, but it is often the longest because it involves so many stages and stakeholders. Half of respondents to our State of Contract Management report said their contract process lasts at least four weeks.

    Compare this to the average time it takes to deliver a quote to the customer — about five hours. If you truly want to shorten the sales cycle, contract management is an obvious, but worthwhile, place to start, as it can reduce the contract process from weeks to days.

    Transforming Business Processes with Contract Management

    Contract Management 101 Cover

    Today, organizations are using technologies like CLM and contract management solutions to drive productivity, increase visibility and reduce risk, transforming critical business processes.

    To learn more, read Contract Management 101, our comprehensive guide to contract management and the benefits of using technological solutions.

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    The contract process can involve multiple players from various departments, both internally and externally, depending on the complexity of a contract. CLM solutions are meant to simplify contract collaboration between all players involved, as well as allow each to be more productive in their role.

    Curious how SpringCM can benefit your contract process?

    Contact us today!