Contracting Made Easy: Streamlining the Contracting Life Cycle Process

Introduction:

Are you tired of the tedious and time-consuming process of managing contracts? Look no further, because I have the ultimate solution for you. In this article, I will share valuable insights on how to streamline the contracting life cycle process, making contracting a breeze. With my practical tips and strategies, you can save time, reduce errors, and enhance efficiency in your contract management.

But, before we proceed, if you are thinking does contracting life cycle management apply to me or what benefits it will bring read this article, Contract Lifecycle Management (CLM): Unleashing Benefits Across 50 Industries and Functions. It may help you understand how it may affect your industry or business function.

The guide will walk you through the entire contract life cycle, starting from contract creation and negotiation to execution and renewal. I will delve into the importance of clear and concise contract templates, the power of automation tools, and how to effectively track and monitor contracts.

By following our expert advice, you can eliminate bottlenecks, improve collaboration among stakeholders, and ensure compliance with legal requirements. Whether you are a freelancer, small business owner, or part of a large organization, our insights are applicable to all.

Don’t let contract management consume valuable resources and hinder your business growth. Let us help you simplify the process and free up time for more strategic tasks. Get ready to revolutionize, and simplify, your contract management with my foolproof techniques.

Importance of streamlining the contracting life cycle process

Managing contracts is a critical aspect of any business, yet it often becomes a complex and time-consuming process. Without a streamlined approach, organizations face challenges such as delays in contract execution, compliance issues, and increased risk of errors. That’s why it’s essential to streamline the contract life cycle process. By doing so, you can unlock several benefits that contribute to the overall success of your business.

Streamlining the contracting life cycle process allows for better control and visibility, ensuring that contracts are managed efficiently from start to finish. It enables organizations to reduce manual tasks, automate repetitive processes, and improve collaboration among stakeholders. By implementing streamlined workflows and utilizing technology, businesses can save time, reduce costs, and minimize the risk of errors or legal disputes.

Common challenges in the contracting life cycle process

Before we dive into the steps involved in streamlining the contracting life cycle process, let’s take a closer look at some common challenges organizations face in this area. By understanding these challenges, you can proactively address them and implement measures to overcome them.

1. Lack of Standardized Contract Templates: Many organizations struggle with inconsistent contract templates, resulting in confusion and errors. Without standardized templates, it becomes difficult to ensure clarity, accuracy, and compliance with legal requirements. 

2. Manual Processes and Inefficient Workflows: Relying on manual processes and outdated workflows can lead to delays, bottlenecks, and increased administrative burden. Manual tasks such as contract creation, review, and approval can be time-consuming and prone to errors.

3. Poor Visibility and Tracking: Without proper tracking mechanisms in place, organizations may lose sight of key contract details, such as expiry dates, renewal terms, and performance milestones. This lack of visibility can lead to missed opportunities, non-compliance, and increased risk.

4. Limited Collaboration and Communication: Ineffective collaboration and communication among stakeholders can hinder the contracting life cycle process. Disconnected systems and lack of centralized platforms make it challenging for teams to work together seamlessly, resulting in delays and miscommunication.

By addressing these challenges head-on, organizations can streamline their contracting life cycle process and unlock its full potential.

Phases of the contracting life cycle process

To streamline the contracting life cycle process, it’s important to understand the key steps involved. Each step plays a crucial role in ensuring the efficient management of contracts. Let’s explore these steps in detail:

1. Intake Request: The journey begins with an intake request, setting the stage for a new contract. This initial step is crucial for gathering all relevant information and requirements, ensuring a solid foundation for the contract creation process.

2. Contract Creation: Drafting the contract terms and conditions comes next. Clear and concise templates are used to capture all necessary details, avoiding ambiguity and reducing the risk of disputes. This stage is essential for establishing the groundwork of the agreement.

3. Contract Negotiation: Parties involved then engage in negotiation, discussing and adjusting terms until reaching a mutually acceptable agreement. Effective negotiation hinges on clear communication, collaboration, and a streamlined approval process to ensure all parties are aligned.

4. Review and Approval: Before execution, the contract undergoes a thorough review and approval process. This step involves scrutinizing the contract details, ensuring compliance with legal and organizational standards, and obtaining the necessary approvals from relevant stakeholders.

5. Execution & Storage: Once finalized, the contract is executed with signatures from all parties, making it legally binding. The contract is then securely stored, maintaining easy accessibility and safeguarding against loss or damage.

6. Monitoring & Performance: Post-execution, the focus shifts to actively monitoring the contract’s performance. This includes tracking key milestones and deliverables, ensuring obligations are met, and identifying any deviations or potential issues.

7. Renewal or Termination: As the contract nears its end, decisions on renewal or termination are made. This stage involves proactive tracking, timely notifications, and efficient procedures for either renewing the contract with updated terms or smoothly concluding it.

This sequence provides a comprehensive overview of the contracting life cycle process, ensuring each stage flows seamlessly into the next for optimal contract lifecycle management.

Implementing technology to streamline the contracting life cycle process

One of the most effective ways to streamline the contracting life cycle process is by leveraging technology. Contract life cycle management software and automation tools can significantly enhance efficiency, reduce manual work, and improve collaboration. Here are some key technologies to consider:

1. Contract Management Software: Contract management software provides a centralized platform to store, track, and manage contracts throughout their life cycle. It enables easy access, version control, and real-time visibility, empowering organizations to streamline contract management.

2. Electronic Signatures: Electronic signature solutions eliminate the need for physical signatures, allowing parties to sign contracts digitally. This reduces the time and effort spent on printing, scanning, and mailing documents, accelerating the contract execution process.

3. Automated Workflows: Automation tools can streamline contract workflows by automating repetitive tasks, such as document generation, approval routing, and notifications. Automated workflows improve efficiency, reduce errors, and ensure timely contract processing.

4. Data Analytics and Reporting: Contract management solutions equipped with data analytics capabilities provide valuable insights into contract performance, compliance, and risk management. These insights enable organizations to make informed decisions and optimize their contract management strategies.

By embracing technology and incorporating these tools into your contract life cycle management process, you can unlock significant benefits and streamline your operations.

Benefits of streamlining the contracting life cycle process

Streamlining the contract life cycle process offers numerous benefits. Let’s explore some of the key advantages you can expect to gain:

1. Time Savings: By automating manual tasks and streamlining workflows, organizations can save significant time in contract creation, negotiation, and execution. This allows teams to focus on more strategic activities, increasing productivity and efficiency.

2. Reduced Errors and Disputes: Clear and concise contract templates, automated processes, and improved visibility reduce the risk of errors and disputes. Streamlining the contract life cycle process ensures that contracts are accurately drafted, monitored, and executed, minimizing potential legal issues.

3. Enhanced Collaboration: Streamlining the contracting life cycle process promotes better collaboration and communication among stakeholders. Centralized platforms and automated workflows foster seamless interaction, enabling teams to work together more effectively.

4. Improved Compliance: By streamlining contract management, organizations can ensure compliance with legal and regulatory requirements. Automation tools can help track key milestones, renewal dates, and compliance obligations, reducing the risk of non-compliance.

5. Cost Savings: Efficient contracting life cycle management leads to cost savings by reducing administrative overhead, eliminating manual errors, and mitigating risks. By streamlining the process, organizations can optimize resource allocation and drive financial benefits.

6. Speed of Business: Having a commonly understood approach will yield in faster transaction times and less bottlenecks. Systematic use of data will help improve margins on deals.

7. Strengthen Relationships: Having a systematic contracting life cycle management program will allow you to see the internal client and supplier/customer relationship in a very informed manner. You will be able to make faster and meaningful decisions based on having a 360 view from contracts to commercial activity through reporting and dashboards.

8. Value Creation: Systematic use of data and knowledge will help improve top and bottom line for the business. Recently, my colleague mentioned that he attended a GC roundtable. When the mic came to one of the general counsel they started by saying they “made” the company $300M dollars by putting in a new contracting life cycle management system. After a brief moment of silence, all the pens and pads started moving and everyone at the round table wanted to know how they did it.

Best practices for streamlining the contracting life cycle process

To achieve optimal results in streamlining the contracting life cycle process, it’s essential to follow best practices. Here are some recommendations to consider:

1. Standardize Contract Templates: Develop standardized contract templates that capture all essential elements and ensure clarity and consistency across contracts. This reduces the risk of errors and improves compliance. Some contracts are worth standardizing across the company while others are not. In a perfect world that is not a good answer. But, in the practical world it works best. For example, the procurement team can standardize all its template under the supplier agreement management program and other teams can do so for their types of contracts.

2. Automate Repetitive Tasks: Identify repetitive tasks in the contracting life cycle and automate them using contract management software or workflow automation tools. This saves time, reduces errors, and improves efficiency.

3. Establish Clear Approval Workflows: Define clear approval workflows to ensure smooth and timely contract processing. This may be a good time to revisit the corporate delegation of authority documentation. This prevents bottlenecks and delays and enables effective collaboration among stakeholders.

4. Centralize Contract Storage and Access: Store contracts in a centralized repository that allows for easy access, version control, and real-time visibility. This ensures that all relevant parties can access the latest contract information when needed.

5. Implement Contract Tracking and Reminders: Proactively track contract milestones, renewal dates, and compliance obligations using contracting life cycle management software. Set up automated reminders to ensure timely action and avoid missed opportunities.

5. Artificial Intelligence (AI): AI can only help you so much. There are a few use cases that are proven in the market with various levels of effectiveness. One such use case is auto-redlining – it works effectively with only certain types of contracts and industries and I have only really seen it work with only a handful of vendors. The other more prevalent use case is the data tagging (used for historical contracts or signed contracts). This AI model ensures data is picked up from the unstructured document and tagged in the database with data points e.g. dates and clause information. There are other use cases where AI compares and contrasts third-party paper to the in-house template. And, similarly, there are use cases where AI assigns risk score to third party paper. Your best bet is to work with someone who has experience across the market. It will save you a lot of heart burn. Otherwise, proof of concept is the way to go but it takes quite a while to shed that ‘you dont know what you dont know’ feeling.

By incorporating these best practices into your contract management strategy, you can streamline the process and maximize its efficiency.

Contract management software options

When it comes to streamlining the contracting life cycle management process, choosing the right contract management software is crucial.

There are just too many choices in the market!

Overheard at the CLOC Vegas conference, “Oh no! there are 700 vendors selling contract management in this hall, how am I going to decide?”

Here are some popular options to consider:

1. Use rating and referral services: Here are some examples, G2, Gartner, Theorem, etc.

This in an arbitrarily selected list just to give you a flavor —

2. DocuSign (https://www.docusign.com): DocuSign has electronic signature solution and contracting life cycle solutions.

3. Agiloft (https://www.agiloft.com): Agiloft is an end-to-end contract management solution

4. Onit (https://www.onit.com): Onit has a variety of products in legal and enterprise space, including contract lifecycle management solutions.

5. Enterprise tools e.g. workflow – low-code cobbled together with another similar tool.

700. more entrants coming to market every day 🙂

I am not covering peripheral solutions that can do specialized tasks e.g. redlining, comparison, etc.

Before selecting a contracting lifecycle management software, evaluate your organization’s specific needs and requirements to ensure the chosen solution aligns with your goals.

What happens when you choose the wrong contract management solution

Well wisdom says technology isn’t bad by itself. It usually is a confluence of missed steps, broken promises, etc.

Since CLM is still in its shiny phase, I recommend peers to leverage an expert when going on this journey. If you have time in the day to go through all the learnings then great. If not, then trust a professional to take you through. Again, the caveat is that if it is a small scale effort then it doesn’t matter but if the department or enterprise stakeholders are involved then proper change management, planning, selection, knowing the gotchas needs to be taken care of.

There are just too many stories of failure on the sliding scale. Some of them could have been with any system but others could have been avoided.

When choosing a contracting life cycle management solution, consider the following factors:

1. Ease of Use: Opt for a user-friendly platform that is easy to navigate and requires minimal training for users. With ease usually comes limitation so be ready when you grow out of it. But, training will be required. So, plan to have a long tailed training program.

2. Integration Capabilities: Ensure that the contract management software can integrate with your existing systems, such as CRM or ERP, to streamline data flow and enhance efficiency. And, hire specialists who have done this before with the business. From experience, when time comes there is usually no one on the project who has both business or technical vision to know what to do. Just making the technical solution is not going to get you the feeling most people got at the Salesforce Einstein copilot demo. It takes quite a bit of work to get the data cleaned, create and execute an executive vision of what to do with the data.

3. Security and Compliance: Choose a solution that offers robust security measures, including encryption and access controls, to protect sensitive contract data. Verify that the software complies with relevant legal and regulatory requirements.

4. Scalability: Consider your organization’s growth plans and select a contract management solution that can scale with your business.

5. Customer Support: Evaluate the level of customer support provided by the software vendor. Look for responsive support channels and resources, such as user guides and training materials.

6. Implementation Partner: Evaluate the implementation partner network to ensure you are going to marry into a robust eco-system. This way you will not spin your wheels when you have issues. If you find a solid partner then hire them to play a role on the project. They will cut your teething time down and increase chances of success multi-fold.

By carefully considering these factors, you can choose the right contract management solution that meets your organization’s specific needs.

Conclusion and key takeaways

Streamlining the contracting life cycle management process is vital for organizations to save time, reduce errors, and enhance efficiency in contract management. By following the steps outlined in this article and implementing technology solutions, you can overcome common challenges and unlock the benefits of simplified contracting life cycle management.

Remember to standardize contract templates, automate repetitive tasks, establish clear workflows, and centralize contract storage. Leverage contract management software and tools to track contracts, improve collaboration, and ensure compliance. By choosing the right contract management solution and adhering to best practices, you can revolutionize your contract management and drive business success.

Don’t let contract management consume valuable resources and hinder your business growth. Start streamlining your contract life cycle process today and experience a more efficient and effective way of managing contracts.

Ready to transform your contract management process?

Contact us today to streamline your journey from drafting to execution.

Let’s make contracting effortless together!

Disclaimer: This article is provided for educational and information purposes only. Neither Swiftwater & Co. or the author provide legal advice. External links are responsibility and reflect the thinking of their respective authors – those are provided for informational purposes only.