What is contract lifecycle management (CLM)?
What is contract lifecycle management? Why do people buy it and how can it help me? Learn answers to these critical questions.
What is contract lifecycle management? Why do people buy it and how can it help me? Learn answers to these critical questions.
Contract lifecycle management, or CLM, is software that manages all aspects of a contract or legal agreement from creation to negotiation all the way through execution.
Just about every organization runs on contractual agreements, which is the paperwork associated with sales, purchases, NDAs, license agreements and so on. PricewaterhousCoopers says the average enterprise maintains 20,000 to 40,000 contracts. Yet, most companies manage contracts manually. Gartner estimates that 85% of companies do not have an enterprise contract management system.
So, what does a CLM system do? At its most basic level, a CLM system provides a single digital repository where organizations can store all their legal documents. Sophisticated systems use artificial intelligence to import contracts, analyze the language in them, flag risks, manage contractual obligations, and more.
At the end of the day, the two biggest reasons companies buy a CLM system are to improve efficiency and reduce risk. In fact, 81% of customers surveyed in the Gartner 2020 Magic Quadrant for Contract Life Cycle Management said they bought CLM to create operational efficiencies and 73% cited compliance and risk management. When we asked Agiloft customers, they also talked about operational efficiencies, but the imperative reason to buy was to minimize risk.
NDAs are essential instruments in the protection of sensitive data as legally binding documents between two or more parties. However, they can also be cumbersome to manage.
You may know all the different ways to slice pizza but do you know the four types of healthcare contract data you can slice and dice within pre- and post-signature?
The Bay area made a fitting backdrop for legal operations professionals who gathered to discuss the future of contract management.