What Is CLM?
CLM stands for contract lifecycle management. It's the process of handling contracts from start to finish, from when they're first drafted and negotiated, through to when they're signed, executed, and then renewed or canceled.
The contract management lifecycle involves things like keeping track of deadlines, making sure all parties stick to the terms, and handling any changes or issues that come up along the way.
What Is CLM Software?
CLM software is a tool sales teams use to streamline and automate the various stages of managing contracts.
An effective contract lifecycle management solution can help you and your team:
Improve efficiency
Streamline sales operations
Reduce legal risks to your company
Improve compliance on both sides
Enhance collaboration
Optimize contract performance
Contract lifecycle management software helps your team accomplish all of these things in specific stages.
Stages of Contract Lifecycle Management
The contract lifecycle management process goes in a logical order. The best CLM software includes features to help you efficiently move from one stage to the next.
Contract Creation
This involves drafting the contract terms and conditions, often with templates, boilerplate language, or specific requirements. This stage may involve collaboration between various company stakeholders, including legal, procurement, product management, sales, and other departments.
Negotiation and Approval
Once the initial draft is prepared, all involved parties may negotiate to reach mutually acceptable terms. This stage involves discussions, revisions, and finalizing the agreement. Stakeholders may approve terms during negotiation, or simply approve the contract upon finalization.
Contract Execution
Once the contract has been negotiated and approved, it's signed by all parties via e-signature, which makes it legally binding.
Storage and Organization
Contracts must be securely stored and organized for easy access. This usually involves some kind of digital document management system, accessible to all parties and stakeholders.
Obligation Management
Throughout the contract management lifecycle, all parties must fulfill their obligations as outlined in the agreement. CLM software helps track and manage these obligations, ensuring both parties meet their contractual commitments.
Amendments and Renegotiation
Sometimes, contracts may need to be amended due to changes in circumstances or requirements. CLM software can facilitate the process of managing amendments and renegotiations, ensuring all changes are properly documented.
Renewal or Termination
Toward the end of the contract term, CLM software can provide reminders and notifications for renewal or termination dates. Then the parties involved can assess the success of the contract and decide whether to renew, renegotiate or terminate the agreement.
Analysis and Reporting
CLM software can generate reports on contract performance, compliance, risks, and other key metrics. This information can helps you and your team make informed decisions about future contracts, and improve overall contract lifecycle management process.
Do You Really Need CLM Software?
Contract lifecycle management tools are ideal for large sales teams that generate high numbers of contracts for multiple services. It's built for more complex contracts and processes.
Also, the more stakeholders involved in your CLM, the easier CLM software will make the process. In addition to sales teams, other stakeholders may include:
Legal departments
Finance departments
Purchasing and Procurement teams
Operations teams
Contract administrators and managers
But for companies with more agile sales teams and simpler contracts, CLM software may be too powerful and complex a tool. This may also mean you're spending more than you really need to.
This doesn't mean you shouldn't use CLM software. But you may be better off with a simpler tool like Proposify.
CLM Software Comparison
While Proposify is not CLM software, it does share several features with it.
Consistent and Repeatable Contract Management Process
Using software facilitates a consistent and repeatable contract management process by standardizing templates, workflows, and approval processes. This ensures uniformity in contract creation, execution and monitoring, leading to greater efficiency, compliance and risk mitigation.
Roles and Permissions Management
Roles and permissions management allows you and your team to control access to sensitive contract data and functionalities based on user roles and responsibilities. This ensures only authorized personnel can view, edit or approve contracts, enhancing security and confidentiality while promoting accountability throughout the contract lifecycle.
Content Library
All stakeholders can access contract-related assets in one content library, including images, pricing tables and snippets used to create and update contracts.
Legally Binding E-Signatures
Using software for CLM does away with the need for handwritten signatures, which speeds up the contract completion process. And though CLM software uses electronic signatures, they're still legally binding.
Custom Fields and Variables
Some custom fields and variables are applicable to all contracts, regardless of what they cover. This includes things like organization information, signatory's names and contract termination policies. Software allows this information to automatically populate in the contracts.
World-Class Security
Both Proposify and most CLM software are protected with 256-bit, bank-grade encryption, and one-way password encryption. This ensures your prospects will feel secure that their private data is being protected.
Integrations with CRM Systems
Software integrations are possible with tools like Salesforce, Hubspot and other business management software.
And then Proposify has a few features that set it apart from standard CLM software.
Easier to Use
Proposify is less complex than CLM software, so it's easier to set up, learn and use. This facilitates sales team adoption.
Affordability
Because it's simpler tech, Proposify is less expensive than CLM software. It's just as effective a tool as CLM software, but it's more cost-effective.
More Visual Customization
Proposify offers robust contract templates, and individual visual components that can be embedded into documents to customize them and make them more effective.
Can Be Used as Proposal Software
This is where Proposify really shines. Gain control and visibility into proposal processes, and couple them with the contract lifecycle management process for a powerful end-to-end sales solution.
Expansion plans are also on Proposify's roadmap to add specific contract lifecycle management tools to become a fuller CLM software solution.
Take Control of Your Contracts
If you come to the conclusion that CLM software is more than you need, opt for a simpler option—Proposify. It will efficiently take you through the contract lifecycle management process, and provides many of the same features as CLM software.
More importantly, it offers advantages CLM software doesn't, like lower cost, easier setup and use, and more visual customization.
Learn more about how Proposify gives you end-to-end visibility into and control of your contract management process to help you close deals more quickly and efficiently.
