Companies must understand that their contract lifecycle management or CLM process is very important when it comes to handling and mediating the business’s relationships. There is so much data involved, and it’s a must to keep tabs on every single part of it. Good contract management will lead to the proper information and insight needed to come up with a particular decision.
As you implement better measures for your CLM, it’s important to measure progress and success. Set up a variety of key performance indicators to serve as a benchmark. Here are some suggestions on what your KPIs should look like in regards to your CLM:
It would be ideal to have a system where you segregate your business’s contracts into different categories and levels of importance. For example, if there are two contracts that will be ending soon, it’s important to figure out which contract lifecycle should be tended to first.
That distinction of what kind of contract it is can also help when refining your CLM. Typically, some businesses may place arrangements with other vendors or entrepreneurs in a higher priority compared to agreements made with human resources.
Contracts often indicate the period wherein the agreement between the business and another party will run and stop. The timeline may vary, but having a knowledge of the average can give you some sense of how to handle your CLM implementation in terms of hours.
For example, if a contract takes too long to be signed or executed, look into how you can alter that. Trying to shorten different parts of the contract’s timeline saves hours and improves your company’s overall workflow.
The words used in the contract can affect the lifecycle of your business. Analyze whether the right legal terms were used and how accurate the clauses may be compared to other third-party agreements and templates. If there’s appropriate language, it means the company is properly communicating the terms and conditions of your company’s contract with another party.
There are contracts that may be pending, while others are set to expire. Part of managing your business contract lifecycle is checking what stage they’re in and making adjustments when necessary to change it up for the benefit of the business.
Upon deducing the contract status of your general CLM, it’s time to eye the volume of contracts. How many contracts are being processed? How many contracts are still active? What number of obligations aren’t being fulfilled by your company or the other party?
Part of managing your contract lifecycle includes mitigating the risks that may come along with it. Litigation is something that every company would like to avoid, as it can be taxing on time and resources. Be sure to comply and prevent chances of failure.
Should any contracts still fail as their lifecycle ends, it’s important to assess potential renewals or searching for another party to create an arrangement with. Assess the mistakes that occurred with the previous documents to avoid the probability of errors again.
Using these KPIs and focusing on them amid your company’s CLM implementation should make the process go through much smoother. There are software programs available to make contract lifecycles a little easier to manage.
If you want to indulge in these contract management tools, Anapact offers the perfect and easiest contract management software. Anapact’s CLM solution is ideal for small and mid-sized businesses. Get in touch with us today!