Contract Lifecycle Management (CLM) involves all processes for the end-to-end management of activities related to contract creation and modification, execution, and management. The contract lifecycle is a seven-stage process:
- Contract initiation: The process begins with a request for a new contract or a review of an existing one.
- Contract creation & authoring: It refers to the process of creating a contract from pre-existing and authorized templates and provisions, as well as a set of business regulations.
- Negotiations & review: The contract is shared with the opposite party at this stage, and the process of reviewing and negotiation begins.
- Approvals & Execution: A contract is required to be approved by various stakeholders. The contract’s execution by e-signature ensures compliance and efficiency.
- Analytics & Performance: It is critical to understand how the contract works. Understanding and executing the different milestones and monitoring payments are crucial to realizing the value inside a contract. Also, as regulations change, certain contracts may need to be changed to reflect the new environment.
- Contract amendments: After the contract is signed, adjustments must be handled quickly and without jeopardizing the process or established criteria.
- Contract expiry or renewal: Contracts should be renewed on the expiry of the contracts. Both parties get an opportunity to renegotiate terms and take advantage of future opportunities during renewal.