The 10 CLM features you absolutely need (and why they matter)

You buy software to make your life and your organization’s work easier; more streamlined, more connected, or increasingly productive. Maybe all three. But how does that happen?  

To gain these advantages, you need software to function in a certain way and have certain features. With Contract Lifecycle Management (CLM), there are some definitive features that are required that constitute “Best in Class” CLM software. This is a comprehensive list of CLM features that you need to be on the lookout for when considering CLM for your organization. 

1. Centralized contract repository 

So many people across an organization need to access contract data at any given time for a variety of reasons. Finance needs numbers, Sales wants to know contract progress, Marketing needs to understand promotion commitments, Procurement wants to track obligation management, and the list goes on.  

Wouldn’t it be easier if you could define different personas and their associated type of access to centralized contract data instead of fulfilling individual requests every time someone needed a piece of information? A central, accessible repository is the answer. Layer in powerful filtering and full-text search, and you have improved visibility with less risk of duplication and mixing of data. 

2. Advanced workflow automation 

If you don’t know exactly where any contract is in its lifecycle and who may be holding up the works, you’re slowing down sales, frustrating stakeholders, and forcing people to work around your process, creating risk for the entire organization.  

With contract automation in approval and review workflows, anyone who needs to know can find a status. A CLM worth its salt will have sequential, parallel, conditional, and even ad hoc approval routing. It’ll also have deadline alerts and escalations that keep things moving in the contract workflow.  

3. AI-powered contract intelligence 

AI is the talk of the town and CLM is no different. 
 
 AI is commonly found in many CLM solutions on the market today, but how much more do those functionalities cost? What are the advantages it brings to your organization or processes? The best solutions have AI integrated throughout the entire contract lifecycle and let you manage when and how you use it. If it’s an extra cost or a bolt-on feature, think twice.  

When it comes to AI, it’s worth getting these features right in your CLM purchase. AI provides a multitude of advantages within a full contract lifecycle, such as: Converting unstructured documents into actionable data. 

• Checking inbound contracts against internally built or community-sourced playbooks to generate redlines, comments, extract obligations, and more 
• Allowing any authorized user to use a chatbot for nuanced questions about a contract record or its associated attachments, with sources provided for every response 
• Building or using pre-built generative AI (GenAI) prompt agents that automate manual tasks anywhere throughout the contract lifecycle 
• Importing and reviewing large volumes of contracts 
• Creating and training labels unique to your organization for powerful, custom contract analysis 

When exploring the CLM vendor landscape, make sure that you are considering CLMs that allow you all these abilities, but only when you want and need them in your contract process.  

4. Dynamic templates and clause library 

Contract templates provide many benefits to an organization. They help reduce the time Legal spends drafting the same kind of contract for different entities; self-serve contracting becomes an option for the rest of the organization, and language becomes standardized, ensuring that no unintentional risks are introduced.  

On top of that, build a clause library, and you’ve taken standardization to a whole new level. Clause libraries enhance compliance with approved language while increasing efficiency and faster contract creation. Enhancements such as being able to identify “standard” and “fallback” clauses give needed flexibility while remaining compliant and still focused on standardization. 

One step further, you could use that clause library as part of your review process to compare approved language against third-party language. Creating clause libraries is easier than ever with AI, and their benefits are magnified as soon as they’re put into practice.  

The combination of AI, templates, and clause libraries working in harmony is an ideal CLM solution.  

5. Version control and redlining 

Redlining is table stakes in CLM environments today, but keeping them consistent, no matter who is reviewing a contract, trumps the ability to do them in the first place. The best CLMs use both your playbooks and AI to quickly provide redlines and suggest improvements to better align language with internal standards. This creates faster redlining, more accurate results that align with your organization’s risk level, and speedier sales cycles. Faster revenue and less risk, anyone?  

6. E-signature integration 

There are plenty of add-ons in the world of CLM, but the native integrations that come included can be critical. Having options with what is natively integrated makes CLM more powerful. Take, for example, e-signature. Having a choice of leading e-signature platforms already integrated into a CLM Out-Of-The-Box (OOTB) not only makes adoption easier but can cut hard costs by 56% on average and take back opportunity costs because 79% of agreements are signed within 24 hours. Make sure your CLM not only comes with native integrations for important features like e-signature, but that you have still have choices.  

7. Configurable dashboards and reporting 

An organization need many different types of reports and and in different formats. Sure, a flexible dashboard is great, but with the number of needs to report out contract data into the organization, reporting flexibility is key because: 

• Finance needs data for their annual reports and audits 

• Procurement needs visualization of renewals, spending, etc. 

• Executives need one-time reports that satisfy investment presentations 

• Sales needs visualizations on where they contracts are in the negotiation process 

And these are just a few examples of the different needs amongst departments. To fully unleash the power of reporting, one CLM “must-have” function is the ability to integrate contract data bi-directionally into other systems. It’s important to think strategically about reporting so that your reports tell a story and support better business outcomes.  

8. Integration with enterprise systems 

A data distribution strategy is more than what reports are generated for which departments. Data can live within systems that other departments in the enterprise use every day. And the ease of setting up these critical integrations is key.  

The number of connection options is very important when assessing any CLM solution. Integrations should satisfy what is most appropriate for your business objectives, desired outcomes, and business situations.  
 
Options should include:  

• IPaaS connectors pre-built into the CLM platform to most-often used cloud-based platforms that let you connect to a variety of applications without building custom integration code.  

Or,  

• If the connectors are not already built for you, the CLM solution should feature a robust, no-code ability to connect to as many business solutions as possible. You never know what new program your organization will need to send and receive contract data to and from, so the more options, the better. And the integrations should be a point and click, without any need for coding or taking up IT resources.  

• The ability to connect exactly the way your IT department needs. Your CLM should always provide the option to utilize open APIs for synchronization to any system at any time.   

9. Renewal and obligation management 

Any robust CLM should automatically extract obligations buried inside contracts. Automated alerts for expirations, renewals, and key obligations prevent missed deadlines and having a rules engine that can trigger renewal workflows or escalate tasks automatically reduces risk of revenue leakage and compliance lapses. Don’t rely on pre-built data models or AI that depends on industry averages rather than your organization’s specific needs. Ensure you have complete control over your data and can extract more than black and white obligations. Nuanced contract language is binding, too, so make sure any platform you employ can extract that type of data as well.  

10. Granular security and access controls 

Role-based permissions, encryption, and audit trails are vital for compliance and data security. Make sure that your CLM has a flexible access model that protects sensitive contract data while enabling collaboration across legal, finance, and procurement teams. 

Third-party validation with outside testing is also critical for any CLM that you choose. Don’t forget to look for redundancy and firewall protection. Engage your IT team to fully vet your CLM platform choice for all critical security requirements  

Bonus points: configurability without code 

Don’t forget to ask yourself: how easy is it to administer your CLM? Your system should be easy for the end user, but also for the administrator as well. Make sure that you can make changes or add workflows without coding, add integrations as needed by pointing and clicking, and never need to rely on outside resources or your IT team.  

Ultimately, no-code configurability dramatically improves time-to-value and future-proofs your CLM system.  

In the end, you still need to make a decision about the best CLM platform for your organization. It can be overwhelming with all the choices in the marketplace but if you focus on what features you seek for what business outcomes, you’ll be setting yourself and your organization up for contracting success.  

Learn about the best option in the CLM market.