You have all the software you need to build a contract lifecycle management system for your business.
In this guide, you’ll learn what contract management software is and why you should use platforms like Office 365, Salesforce, or your existing G Suite to build your own contract lifecycle management (CLM) tool.
What is Contract Management Software?
As the name suggests, contract management software (CMS) is a tool that allows you to manage every stage of your contracts easily. Contract management generally relies on contract management software supported by computer programs, data, and libraries.
You can use contract management software for all aspects of contracts, including contract lifecycle management and contractor management on projects.
What Is Contract Management?
Contract management starts when the formal contract is initially drafted (i.e., the pre-award phase). Then, it proceeds through the signing of the contract by all parties (i.e., the award phase). This is where a lot of people stop caring about contracts.
However, the contract management process continues until the agreement reaches its end date (i.e., the post-award phase). Once the renewal phase hits, it’s time to start managing your contract all over again.
This cycle happens for every contract in your company. Contract management software ensures that contracts don’t get lost or forgotten and that all the conditions are being met by both parties. It also allows you to access contracts quickly and easily whenever you need them.
What Are The Stages Of A Contract Lifecycle?
You likely already inherently recognize the many stages of a contract. However, contract management lets you zoom in to see the contract lifecycle more clearly.
Here’s a breakdown of what contract lifecycle management entails.
Every contract starts with a request. During this phase, all involved parties gather the data they need to draft a contract. This is the most critical (and often the most time-consuming) stage of a contract lifecycle because it requires both parties to find all the relevant information needed to make the contract work for all parties.
Once all parties have the required information, they can begin writing a contract. Each party will write their terms and solidify clauses by including all relevant information to their contractual obligations.
Once the contract is drafted, it’s time for all parties to negotiate specific parameters to get the best outcome. The length of the negotiation stage will vary depending on several factors, including the parties involved, the number of people involved, the contract’s scale, the negotiation method, and more. This period can be shortened dramatically by using contract management software.
After the contract has been successfully negotiated by all parties and both sides agree on its terms and conditions, the contract is ready to be approved. This step might require one or both parties to get additional people involved, such as executives, department heads, board members, and other relevant parties. Once all relevant parties have approved the contract, it’s time for signing.
This is when all relevant parties sign the contract, and it becomes official. Contract management software simplifies this step by allowing for electronic signatures, which can drastically reduce the amount of time spent on this stage.
After the contract has been signed, each party is responsible for holding up their end of the agreement by following the obligations laid out in the contract. This is often referred to as compliance. CLM can help track compliance for both parties and find problems early before they lead to business hazards such as late fees or legal ramifications.
As a contract nears its expiration date, it needs to be renegotiated and renewed. CLM can help businesses stay on top of expiration dates so renewals can occur before a contract expires.
What Are The Tools You’ll Need to Build a CLM?
Over the last five years, Microsoft, Google, Salesforce, and others have dramatically boosted its capabilities and released dozens of powerful applications that were previously unavailable.
Not to worry. We’ve identified five key Office 365 tools that you can use to develop a CLM.
What Are The Five Examples of Office 365 CLM Tools?
- Windows 365
- Microsoft List
- Microsoft Forms
- Power Automate
- Power BI
Wait, I can Set up a CLM for Free? What’s the Catch?
Many people aren’t aware of the newer capabilities because they haven’t been advertised very well. They might also be remembering 15 years ago (before the cloud was a thing) when on-prem systems like SharePoint didn’t iterate fast enough.
The times have changed for the better. Today’s systems are vast and powerful enough to allow you to build your own CLM software for free.
What Are Some Catches?
If your company is already using a suite of tools, you likely have everything you need to get started (i.e., they’re available in your subscription out of the box.)
One more catch - Some of the bells and whistles of a CLM product on the market might serve your business well, but the concept behind this guide is to build a minimum viable CLM — not one that has every feature. So, this MVP CLM might only scratch the surface of what you need.
That being said, here are the key features of our self-built CLM.
What Are The Key Features?
- Customizable request form
- Delivery and assignment of a contract to a point-of-contact (e.g., contract manager or lawyer) for authoring/negotiation
- Approvals based on thresholds and other factors
- Tracking and pushing e-signatures
- Tracking status
- Boolean search enabled repository with contract renewal and expiration reminders
What Data Points Are Captured?
- Contract Type
- Contract Value
- Sign-off Status
- Automatic Renewal
- Termination Date
What Are The Benefits of a Free CLM?
Of course, the first benefit of a Free CLM is that it’s free.
In addition, here are a few reasons why your company can benefit from having software that helps with creating, editing, tracking, and renewing contracts across their entire lifecycle.
- Develop an audit trail for contract approvals
- Monitor organizational rules and processes
- Stay on top of compliance and deliverables
- Monitor deadlines during each stage of the contract lifecycle
- Allocate workload and resources appropriately throughout the contract lifecycle
Sounds Great! How Do I Set up a CLM?
DocJuris has developed a step-by-step approach to configuring a free CLM. Please reach out to us above to access this white paper, so you can get started!