Zycus recognized as a ‘Strong Performer’ in The Forrester Wave™: Contract Lifecycle Management, Q2 2023  Read More

As compliance professionals, why should you champion CLM software?

Several data privacy laws will take effect in the U.S. in 2023. As per Reuters, this may be the beginning of a profound shift in the philosophy underlying data privacy laws in the country.

With an increased impetus on data security, and a general shift in the regulatory climate. It is important for contract compliance teams to refocus their efforts on ensuring all legal agreements are compliant and up to date.

Contracts signed and waiting to be signed are all susceptible to non-compliance. Using outdated or inefficient contract management systems can further magnify this risk. The costs associated with contract compliance failures can be significant and can include fines, legal fees, lost opportunities, and damage to an organization’s reputation, and much more.

There are two major landmines that expose contracts to the risk of non-compliance in organizations:

  1. People dealing with contracts from non-core legal teams may be unaware of the specific industry, and regulatory requirements. This can mean non-adherence to pre-approved contract language and terms, getting into dubious or non-compliant agreements, etc.
  2. Legal/compliance teams relying on antiquated contracting systems or methods. This can make it difficult to spot compliance errors or gaps, making it virtually impossible to eliminate them.

Both of these issues can be solved to a large extent with the right tools in place. In this blog, we will dive deep into how a CLM tool can facilitate stronger regulatory compliance.

So, how can CLM Software ensure better compliance? The right tool enables:

  1. Secure, centrally housed contracts
  2. A clear, auditable trail of contracts
  3. Minimized deviation from legal-approved terms and clauses
  4. Timely notifications for obligations
  5. Detailed reports with contract and clause level visibility

Secure, centrally housed contracts

For an average large enterprise, contract-related data can be found sitting in up to 24 different disjointed systems. This disparate data, stored across files, cabinets, and emails etc. is difficult to manage, let alone scrutinize for compliance gaps.

CLM repository software offers a centralized, digital repository of all contracts in one place. This makes all information readily available for the perusal of compliance and legal teams. This way the contracts can also be better protected against data leaks, breaches or malware.

In addition to this, a tool such as Zycus’ iContract can help manage role-based access and authorization with the relevant settings and encryptions in place. This can help safeguard sensitive business data sitting in your contracts such as vendor details, customer/user information and employee data.

If you would like to learn more about how Zycus CLM can help make your contracts more compliant, book a call with our solution experts today.

A clear, auditable trail of contracts

In order to minimize the legal and financial risk associated with non-compliance, it is important to be able to do timely reviews and ensure that contracts meet regulatory requirements, such as data privacy, data security, anti-corruption, anti-money laundering, and others.

A centralized, searchable repository provides the opportunity to easily audit contracts. By next year, Gartner predicts manual effort for contract review will be cut down by 50% with the broader adoption of AI-driven contract analytics solutions.

Through a CLM solution that allows you to extract clause and contract level data, you can audit contracts by reviewing terms and clauses to assess if they comply with relevant regulations and keep tabs on whether they are being properly executed and managed. Regular audits will help nip any issues in the bud, ensuring compliance with company standards, vendor commitments, and industry regulations.

Minimized deviation from legal-approved terms and clauses

As mentioned at the start, it is likely that non-legal members handling and drafting contracts may not always have complete information on the regulatory requirements and standards.

CLM authoring software helps avert this risk of non-compliance by standardizing contract language and terms. Instead of allowing employees to create their own contracts, CLM software provides a library of legal-approved contract clauses and pre-designed contract templates.

Each contract begins with a pre-approved template that complies with internal standards and external regulations, allowing for only the specific deal details to be altered. Automated rules are applied to guarantee correct language and clauses are used, and the software routes contracts for review and approval by relevant personnel with a focus on compliance.

This helps non-legal contract owners to hold their own and draft contracts with ease without getting stuck in long feedback and approval cycles.

Timely notifications for obligations

Without the correct systems in place, contracts can become out of mind-out of sight. And even if these disparate contracts are monitored, it can become difficult to manually keep track of compliance in a large enterprise with a high volume of 3rd party contracts. Obligation data hidden in complex contract language can further complicate this process.

With solutions such as Zycus iContract, you can set up automated alerts for upcoming contract obligations, such as deadlines or auto-renewals, to ensure timely compliance with contract terms. By receiving notifications in advance, relevant personnel can stay on top of contract commitments and reduce the risk of noncompliance.

Detailed reports with contract and clause level visibility

With the latest CLM solutions, it is possible to generate comprehensive reports on various contract metrics. Such reports provide a clear overview of the contract details, allowing teams to keep track of all compliance matters. This enables early detection and prompt resolution of any potential non-compliance issues on the horizon. The reports can be generated instantly and can be shared easily with relevant stakeholders within the organization. 


CLM tools offer a solution to top compliance issues by providing a secure, centrally housed repository of all contracts, to audit, track and simplify authoring of compliant agreements.

With tools such as Zycus’ iContract, compliance teams can easily ensure better regulatory compliance and protect sensitive business data. Book a call with their solution experts to learn more about how their CLM can help make contracts more compliant.


Mr. Panchal is the Vice President at Zycus. An ardent promoter and practitioner of Theory of Constraints and CCPM, Digesh brings with him deep domain expertise from his long and rich personal experience in manufacturing. In his prior stint at Verdantis, he has led highly complex implementations of Master Data Management solutions for multiple master domains, across various industries and varied deployment models. As a forward-thinking leader with extensive experience in the design, development, testing, and rollout of cutting-edge B2B SaaS solutions, Digesh excels at driving the day-to-day operations of complex enterprises to produce turnarounds. At Zycus, Digesh is responsible for building a best-in-class AI-driven Enterprise CLM software and drive market traction.
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