How Technology is Making Contract Management Smarter

5 min read

Here’s what you should know about emerging contract management software solutions.

Contract lifecycle management is a daunting endeavour. From drafting, to negotiation, to execution, to compliance management and more, managing a contract across its lifecycle demands a significant amount of administrative work – and that’s to say nothing of renewals. Traditional contract lifecycle management methods have historically been reactive rather than proactive, frequently involving lost files, missed deadlines, data entry errors, and a variety of other pitfalls.

That’s where contract lifecycle management software is changing the contract management game. Contract lifecycle management apps are enabling in-house legal teams to proactively draft, review, and manage contracts across your whole organization – without the risk of a major mistake.

But how do these apps work, and how are they changing the face of contract management? Here’s what you need to know.

What is Contract Lifecycle Management?

Contract lifecycle management is the process through which contract management is automated via technology. Contract lifecycle management views contracts as not stationary objects, but rather, as dynamic documents that move through various stages during each contract’s life.

A contract lifecycle includes a variety of stages such as initiation, drafting, approval, execution, management, and either the renewal or termination of the contract. During initiation, the parties verbally agree to create a contract for some sort of service or exchange. The drafting phase of contract lifecycle management is exactly what it sounds like: The drafting of the contract.

Between the drafting and approval stages, the parties negotiate terms. Once both parties are happy with the contract terms, the contract is approved. In the case of large organizations, contract approval may involve a variety of different parties; contract lifecycle management solutions are often capable of tracking the different stakeholders involved in the contract and whether or not each stakeholder has approved the contract.

After the contract is approved, it is executed; this is where the involved parties sign on the dotted line. The next phase of contract lifecycle management, the management phase, differs from the phases before it in that management is ongoing. Contract lifecycle management views contracts as living, breathing entities that demand ongoing support.

When actively managing a contract, the parties will track key milestones, fulfill major obligations, keep a record of any contract amendments, and, on occasion, audit the contract for compliance. At the end of the contract, the parties will determine whether to renew or terminate.

The key difference between contract lifecycle management and other forms of contract management is that contract lifecycle management systematizes – and in some cases, automates – the process of managing a contract.

Benefits of Contract Lifecycle Management Software

Contract lifecycle management software offers a variety of benefits for legal teams. First and foremost, a CLM enables the parties involved in a contract to more efficiently manage the contract across its entire life.

CLM systems also improve accuracy by providing supplier data and contract terms in a single, easy-to-access place. By creating a central repository for contracts, CLM systems enable better visibility over contracts, which helps to improve compliance.

A CLM system can even help companies generate contracts faster by leveraging the power of intake forms to eliminate data collection from the contract drafting process. Plus, CLM systems can provide users with version logs, enabling them to view changes to contracts over time. 

With robust alert features, CLM systems can provide users with alerts when contracts enter key stages of the approval process, tracking signatures along the way. CLM systems can even send parties reminders of major dates such as termination or renewal deadlines, so the parties can stay on top of the contract during its life.

One of the best features of CLM systems is their ability to search through stored contracts for keywords in just a few moments, so you can always locate the terms you’re interested in at any time.

Emerging Contract Lifecycle Management Solutions

There’s no shortage of CLM systems on the market to help your company automate and accelerate contract management.

One leading product in the industry is Ironclad, an AI-powered contract lifecycle management app that combines contract creation, negotiation, signing, and compliance features for an all-in-one contract solution. Ironclad’s artificial intelligence assistant can handle complex prompts and solve challenging contract tasks, as well as automatically tag, extract, and report on contract data. Ironclad’s app enables redline suggestions, unapproved clause flagging, and automatic contract data tagging for faster contract review.

There’s also Contractbook, a CLM system that makes it easy to import and extract the essentials from any contract. Contractbook enables users to stay informed on contracts and act quickly on valuable insights, making unpleasant contract surprises a thing of the past. With automatic renewal reminders, Contractbook users can start renegotiations faster and de-risk agreements. Contractbook also features a built-in contract AI that provides data-driven insights on contracts for users to act on.

Another major player in the CLM space is Evisort. Evisort boasts an AI-powered platform for end-to-end contract lifecycle management and offers a first-in-the-industry large language model built specifically for contracts. With Evisort, users can automatically identify and remedy risky language in contracts, track contractual obligations over time, and even find untapped revenue or unrealized cost savings in customer and vendor agreements.

Contract lifecycle management is an emerging paradigm of contract management that views contracts as living, breathing entities that can evolve over time. CLM software is now enabling teams to approach contract lifecycle management proactively rather than reactively, providing valuable insights into contracts that had previously been hidden in walls of text. With the right CLM system, your legal department can easily manage contracts across their entire lifespan, from drafting to review and beyond. With better contract management comes less risk, more cost savings, and improved data accuracy.

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