Can Contract Lifecycle Management Help Recession-Proof Your Business?

Can Contract Lifecycle Management Help Recession-Proof Your Business?

By DAVE PARKS

After a summer of disappointing macroeconomic trends and continued uncertainty about what recovery is going to look like, many businesses are looking at ways to minimize risk during this potentially long and disruptive time. Although there is not one answer to today’s economic uncertainty, modernizing and digitizing the contract process can be part of the solution. It also makes good business sense.

Contracts are the backbone of every organization. They define relationships with vendors, customers, partners and more. Poor contract management processes can expose a business to risk, and the contract lifecycle is a way to track the overall health and well-being of a company. Tools such as contract lifecycle management (CLM) software give companies a way to gain more control, agility and visibility into their business and business relationships, which are critical when mitigating the risks and challenges associatedwith an economic recession.

RECESSION MITIGATOR #1: CONTROL

During economic uncertainty, making sure that business processes are operating as efficiently and effectively as possible is even more crucial than usual. Well-designed business processes can improve profits, and help ensure higher quality and better customer relationships. Poor business processes increase in efficiencies and risk, and can impact the quality of decisions made based on those processes. CLM software allows organizations to take control of contract processes in a way that helps to perfect them. One of the immediate benefits is that it centralizes all contracts, related documents and contract data in a secure, cloud based repository. This immediately reduces the time it takes to search for all that data manually, as well as ensuring that only the right people can access and edit contracts.

Automated workflows, and clauseand template libraries, also helpstreamline the negotiation processby reducing the time requiredto draft, collaborate and sign contracts,as well as ensuring that allinternal and regulatory rules arefollowed. Organizations can leverageautomation to control how andwhen every task and alert needs tohappen, triggering workflows specificto contract terms, and alertingthe appropriate personnel whensomeone goes outside of this process.Clause and template librariesalso provide control over what legallanguage is used and when, ensuringthat the language and specificationsare always up to date.

RECESSION MITIGATOR #2: VISIBILITY

Organizations cannot manage or fix what they cannot see. CLM software gives organizations complete visibility into all contract management processes, and into obligations and relationships with vendors and partners. The centralized, secure database can easily be searched for contract-related information such as stage or status, as well as key dates, line items, commitments, and so forth.

CLM’s greatest benefit to organizationslooking to do more with lessduring uncertain times is its abilityto leverage all the contract datathat they already have to optimizetheir business processes. Teams cangenerate metrics about the contractprocess and risk exposure, and setbenchmarks and track importantKPIs demonstrating that the houseis in order. These include the totalvalue of all active contracts, theaverage number of days in a contractlifecycle, opportunities forimprovement and many other metrics.By tracking KPIs in this way,organizations have instant accessto actionable contract intelligence,and can find underperforming areasand additional cost-savings opportunities.They can ensure that theyare in compliance with internal andexternal processes.

RECESSION MITIGATOR #3: AGILITY

CLM software gives organizations more visibility into the overall health of their businesses and supply chains, as well as clear and accurate data to quickly make prudent business decisions.This agility is key to surviving when times are tough, and can be a competitive differentiator when they aren’t. CLM software speeds up the entire contracting process from request to negotiation. Self-service contract requests and submissions capture everything negotiating parties need up front, and then convert those requests to contracts using merge fields and clause and template libraries. In addition, collaboration features allow all parties to redline, approve, and sign quickly and securely. By shortening the contract lifecycle, this software immediately adds value to the company, and frees up legal and contracting teams to work on higher-value activities.

CLM can also be integrated with other business systems, including enterprise resource planning (ERP)and contact relationship management(CRM) software. By sharing contract data bi-directionally between all existing tools, organizations can accelerate contract management tasks and operational processes.

RECESSION MITIGATOR OR COMMON SENSE?

Unfortunately, there is no crystal ball that can tell us with 100 percent certainty whether current economic trends will lead to a recession.There’s also no guarantee that any technology, CLM software or otherwise, can recession-proof a business.That said, a modern approach to contract management can help ease some of the burden organizations face through better business process controls and visibility, as well as real-time reporting. These benefits make good business sense regardless of the state of the economy.

Dave Parks manages Contract Logix’s overall marketing strategy and initiatives including product marketing, demand generation, digital, content and public relations. He has over two decades of strong product and content experience, having served in senior marketing roles with Progress, Ciena, Lucent and Cascade Communications and as an industry analyst with the Yankee Group. Dave is a passionate marketer who loves creating content that answers people’s questions and delivers his audience value.