How can I benefit from CLM?

Contract Lifecycle Management (CLM) can correct inefficient processes, leading to greater growth and stability, long-term viability and immediate improvements to the bottom line. CLM helps organizations perform more efficiently and with fewer risks:

 

1.       Assessing and mitigating internal and external risks. Pre-emptive alerts to important milestones, such as renewals, amendments and compliance obligations, can prevent overlooking required actions.
2.       Complying with statutory and reporting requirements. What are the consequences when required reporting is not performed? Does your organization have evidence of compliance where legal requirements exist?
3.       Establishing a centralized repository. A primary objective of CLM is that all contract data and documents exist in one central repository to enhance visibility. Can your organization quickly locate a specific contract or a term within a contract?
4.       Handling complexities such as rule-based pricing and rebate management. Is your organization electronically capturing and tracking rebates, discounts and incentives to ensure all are honoured? Are pricing rules easily implemented, or are they performed manually?
5.       Standardizing, automating and reducing cycle time. What is the organization’s typical contract cycle time? Can each step’s time be tracked? Can delays be pinpointed? What cost savings could be realized if cycle time were reduced by half?
6.       Streamlining the procurement and sales process. Can contract metrics be compared and analysed to identify high performers and best practices? Have sales terms (discounts, rebates) been standardized for ease-of-use?
7.       Enhancing supplier relationship management (SRM) and customer relationship management (CRM) Is your organization considered to be valuable, reliable and credible by customers and suppliers?

The Need for CLM

All business relationships are based on contracts. Contracts measure quite often the efficiency of each business area (Purchases, Sales, Marketing, Legal, Finance, Human Resources, etc.) and ensure compliance with all applicable laws and corporate rules.

Each obligation, responsibility and expectation of a business deal is specified within contracts. There are many types of agreements and their growing complexity in a global scenario lead to the need of an effective method to control and verify the Contract during its entire life cycle.

Frequently, Contracts are still managed manually and in printed format, with a fragmented approach waste of time and energy high error rate and minimal interaction among the various company departments involved. The data included in the Contracts is held in paper format, inside boxes, or is available to a few individuals who have contributed to the negotiation and drafting or to managers in charge. The need, sometimes, to seek advice and help from an external legal specialist also increases the risk of spreading the information contained in the Contract.

This results in increased risks and costs, loss of earnings and, in some cases, reputation damage.

Each Contract may be the source of a risk (operational, financial, etc.) linked to different internal and external variables. These risks can be managed and minimized only if constantly supervised through specific methodologies and tools. The competitiveness of business organizations in a global market relies on a comprehensive Contracts Management that allows the control effectively Service Level Agreements (SLA), national regulations of various countries, warranties, insurances and the like, through a customized solution in accordance with the Enterprise Content & Management Systems already implemented.

This solution is Nova clm.

 

About CLM

80% of all business to business relationships are governed by contractual agreements. Contract life cycle management (CLM) is a solution and process for managing the life cycle of contracts created and/or administered by or impacting the company.These include third-party contracts, such as outsourcing, procurement, sales, nondisclosure, intellectual property, leasing, facilities management and other licensing, and agreements containing contractual obligations now and in the future. [source: Gartner]

 

IACCM researchs suggests that, on average, corporations are loosing the equivalent of 9.2% of annual revenue due to weaknesses in their contracting process. These losses arise from a combination of missed savings and cost reduction on the one hand, and lost revenue opportunities on the other.  It is easy to see the economic advantages of a shift from today’s transactional, control-driven focus, to a more str ategic view based on market risk analysis and relational contract structures.

 

CLM is a need in Global operations. Around 82% of companies worldwide, of any size, do not adopt any advanced or structured tool or services for managing their contracts yet thus this is a very compelling market opportunity that is fulfilled by a product like Nova CLM.

Contracts are becoming of paramount importance in a global and complexity-growing market. SaaS and Cloud services are no longer a mystery for organizations and the adoption of this delivery model is increasing every year.