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

Part II – 4 Contract Management Metrics to Continually Measure and Optimize your Contract Performance

In part I of this two-part blog post series, we discussed how tracking certain metrics with the help of CLM solutions, can aid in time, effort and cost reduction. It can also enable tracking of costs and efforts and making required changes early on in case of any excessive resources spent.

Ask yourself a question – Is your company completely immune to all compliance and obligations risks? If the answer is no or you hesitated before answering, you know your company is prone to some form of risk or another. In this 2nd part of the series, we bring to you, the next two metrics addressing pre-award and post-award compliance that will not only make your company compliance-ready but help you avert any unprecedented risks right away:

  1. Reduced Contract Turn Around Time
  2. Optimized Cost of Contract Management
  3. Increase pre-award compliance
  4. Measurable post-award compliance
  1. Increase pre-award compliance

IACCM studies indicate that organizations lose 9.2% of revenue every year due to poor contract management practices. Standardized processes and pre-configured metrics, can turn around contract management practices for improved contract performance. During the pre-award stage, we have further divided metrics as below for improved performance and compliance:

  • a.  Clause Library
  • b.  Clause Usage Playbook with clause modifications
  • c.  Risk Modeling for Clause Variants

a. Clause Library

  • Contract Management systems have an extensive clause library built-in for process standardization and optimization during authoring
  • CLM auto-populates pre-configured templates based on contract request meta-data, making use of clause library

b. Clause Usage Playbook / Clause modifications

  • Smart clause library has hints to ensure maximum compliance, standard language and avoidance of any omissions
  • Any modification to standard clauses automatically flows to the legal team for approval

c. Risk modeling for Clause Variants

  • Risk-modeling ensures the contract does not go beyond suitable risk levels by analyzing contract clauses during authoring
  • Clause variants give visibility into risks associated with each variant and help select the least risky option
  1. Measure post-award compliance

An organization’s work does not end post contract sign off. It extends beyond the post-award stage. Without metrics to track contract performance post-award, companies often don’t have visibility into whether contracts are performing as per contract clauses or are exposed to any risks. As per a research conducted by Aberdeen group, 66% of companies see increased contract compliance when they use a contract management solution, as teams are notified to major milestones and deadlines, giving them a chance to follow up and ensure all contract terms are met.

Post-sign-off stage, to ensure maximum value through compliance, compliance can be tracked through various parameters:

  • a.  Compliance to Commercial terms
  • b.  Compliance to Operational Performance
  • c.  Maintaining Regulatory Compliance

a. Compliance to Commercials

  1. During post-award stage, monitoring commercials through auto-triggers and alerts ensure timely remediation of any updates to policies and action on any late payments or breached terms
  2. It allows for a detailed view of each of the commercial obligations and its implication for compliance

b. Compliance to Operational Performance

  1. After sign-off, companies often lose sight of contract performance. This can lead to sub-standard services, project delays and non-compliance to operational performance
  2. CLM helps track contract performance post sign-off and alerts in case of any discrepancies in day to day operational performance
  3. With CLM, appropriate metrics and measures can be configured for accurate performance monitoring

c. Maintaining Regulatory Compliance

  1. Contract clauses need to be updated every time there is a change or update in regulatory obligations
  2. Non-conformity of regulatory compliance can lead heavy to financial as well as reputational losses
  3. With continuous updating, the CLM system can identify all non-compliant contracts as per new/updated regulations and alert the right stakeholders to take necessary action. This enables prompt remediation and full regulatory compliance

Contract Management solutions give organizations the ability to configure metrics effectively for every stage of contract lifecycle. Pre-configured metrics ensure meticulous follow-up and remediation of any discrepancies or risks the company gets exposed to, anytime, anywhere.


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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