AI, CLM, and all the Letters In Between - Thoughtful Thursday Highlight: What is contract lifecycle management (CLM)?)

What is CLM?

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.

Why do organizations buy contract management software?

1. Disorganization: Companies and departments are tired of dealing with contracts all over the place. In fact, most contracts are stored on people’s laptops.

1. Losing track of expirations and renewals: With tens of thousands of contracts, that can amount to real money. An IACCM study showed that enterprises lose 9% of their revenue due to poor contract management. If you’re a $100M company, that amounts to $9M a year.

1. Security: Contracts contain a lot of sensitive information, so storing them on individual laptops or hard drives is a serious security vulnerability.

1. Regulatory compliance: This is a huge headache for legal departments. If your legal documents are not in centralized and in digital form, there is no way to know if you’re in compliance. If a problem does come up, the discovery process will be a nightmare.

1. Risk: If your documents are not in one place and digitally searchable, you have no idea what risks are lurking in them.

1. Convoluted contract processes:
   a. It takes too long to generate a contract. There is no standard language. Feels like re-inventing the wheel every time a contract is created.
   b. Approval process takes too long.
   c. You cannot easily generate metrics and reports
   d. Your legal paperwork exists independent of other systems

How can CLM help me?

1. Conserve cash and contain costs

1. Preserve Revenues

1. Minimize Risk

Learn how Agiloft’s CLM can help make a difference at your workplace with this Quick Video
https://resource.agiloft.com/a...