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.
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.
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.
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.